Volkswagen Realigns Technical Development: Shorter Product Cycles and Faster Digital Offerings.
Updated: Apr 10, 2022
Volkswagen is realigning its Technical Development (TD) division in Wolfsburg in its drive to become a technology company. This involves turning the Group’s largest engineering unit with 11,500 employees into a pace-setter for the Volkswagen brand’s transformation into a technology company. The main emphasis is on a complete redesign of the development process, making it interdisciplinary, focused squarely on software, customer requirements and SSP, Volkswagen’s electric platform of the future, and centred on functions rather than individual components. This is expected to cut development time by about a quarter, increase the speed of new software releases, and significantly accelerate production manufacturing processes. TD will thus become an essential pillar for the transformation of development for the Group.
“If the car is increasingly becoming an electrically driven software product, then its development must also evolve in all dimensions. We are making TD more connected and efficient by focusing our processes and organization on systems and functions rather than components. The software first rather than hardware first. This will enable us to cut development times by 25 percent – in the future, vehicle projects will be completed in 40 months from the point at which the basic software architecture is in place, instead of 54 months as before,” said Thomas Ulbrich, member of the Board of Management responsible for Technical Development. “This year, the transformation will also become visible outside the Group with the Campus Sandkamp development centre planned for Wolfsburg. We will spend 800 million euros on making Campus Sandkamp the most cutting-edge vehicle development centre in the world. In this way, we are highlighting that TD is ratcheting up the pace of transforming Volkswagen into a tech company,” said Thomas Ulbrich.
The growing connectivity of vehicles aimed at achieving seamless integration into the digital ecosystem and the consistent focus on the user experience necessitates a redesign of the development process. The starting point in vehicle development is the new functions catering to customers’ needs. Therefore, the new development process will focus on functions and systems rather than on components. Known as systems engineering, this is a common approach in complex development projects such as aircraft construction. In the 1990s, vehicle development centred primarily on components. As functions and electronics were added in the early 2000s, connectivity began to play an increasingly important role. Now and in the future, the vehicle must be viewed as one system in the customer’s entire ecosystem and communicate seamlessly with all systems outside the vehicle. To this end, the experts from different specialist units clarify requirements and interdependencies early and ensure that systems and components are configured and designed appropriately so that all these functions can mesh seamlessly. In tandem with stepping up its focus on agile working methods, Volkswagen is thus reducing development times by 25 percent; in the future, vehicle projects will be completed in 40 months instead of 54 months as before. TD contributes significantly to process-optimized manufacturing by working closely with Production, targeting a possible production time of around ten hours per vehicle.
By realigning TD towards connected development processes focusing on systems and functions, Volkswagen makes targeted investments in employee training to ready its workforce for the digital age. Several hundred employees have already undergone training for new fields of work in TD, and thousands more will do the same in the years to come. By 2030, some 4,000 employees will be re-skilled for significant new job profiles, while 6,000 to 8,000 more will be up-skilled, receiving extensive training. Training opportunities range from shorter course units to broad expertise to large-scale retraining. Currently, the longest training programs last up to 180 days and will give employees the chance to work in new areas of activity, for example, a skilled metalworker could become an automotive engineering commissioning specialist. In this way, Volkswagen is laying the foundations for attractive jobs and safeguarding jobs at its Wolfsburg location for the long term.
Volkswagen will spend 800 million euros on Campus Sandkamp over the next five years. The new, ultra-modern development centre will raise the bar in vehicle development. Campus Sandkamp, which will house more than 4,000 employees in the project house and integration centre, will also be a flagship project for the future of work at Volkswagen. The project house will act as an umbrella for design, conceptualization, user experience, product strategy, model series, technical project management and project team members from Purchasing, Finance, Production Planning, Quality Assurance and Sales.
The integration center will ensure short, efficient approval and decision-making paths between the different divisions. Its innovative testing and simulation infrastructure and the open design of the collaboration areas will provide a first-rate environment for active systems engineering. New, agile development methods and the state-of-the-art working environment will thus enable TD to take on a pioneering role in Volkswagen’s overall transformation.
By accelerating the development process, focusing systematically on customer requirements and training staff for specific jobs, Technical Development is not only setting the stage for future mobility, but also creating the conditions for developing a value-driven, all-electric, fully connected vehicle with Trinity that is seamlessly integrated into the digital ecosystem. To this end, Volkswagen is working on the platform the Group will use in the future, known as SSP (Scalable Systems Platform). A powerful and scalable platform for the electric age will be deployed for the first time in 2026 in Volkswagen’s Trinity project and will eventually merge the current MEB and PPE platforms. This will make the SSP the bedrock for all brands and models – in other words, the basis for more than 40 million Group vehicles – and allow Volkswagen to cement its positioning as a platform champion. Like MEB, SSP will also be open to third-party providers. At the same time, it will enable the vehicle to be fully integrated with its ecosystem, thus creating the conditions for high driving automation (Level 4) and new usage-based business models. Furthermore, Digital Lifecycle Management (DLCM) will keep Volkswagen vehicles up-to-date even after delivery, so that in the future customers will have a vehicle that is always in step with the times. Volkswagen is making this progress affordable for many people as a volume manufacturer – technologies such as over-the-air updates (OTA) and functions on demand (FoD) are already living up to this claim.
By rolling out the ACCELERATE strategy, the Volkswagen brand will systematically prepare for the profound changes in the automotive industry in good time. The brand has earmarked around 18 billion euros for investment in the future trends of e-mobility, hybridization, and digitalization until 2026. As part of its global electric offensive, Volkswagen will increase the share of its all-electric deliveries in Europe to over 70 percent. In the United States and China, the brand targets an EV market share of over 50 percent in the same period. Volkswagen will bring out at least one new BEV model every year to achieve this. The goal is the full electrification of the model portfolio.
Furthermore, Volkswagen intends to be net carbon neutral by 2050. At the same time, the company is also accelerating the other big issues of the future: Integration of software in the vehicles and the digital customer experience will become essential core competencies. In implementing data-based business models, Volkswagen seeks to attract new groups of customers and tap additional sources of income. In addition, Volkswagen will enable autonomous driving for many people by 2030. As a result, Volkswagen is bolstering its position as the most attractive brand for sustainable mobility in the process.
Volkswagen has reached another milestone in its transformation journey: A new manufacturing facility for the Trinity electric model is to be built close to the main plant in Wolfsburg, with investment totaling some €2 billion. The new Trinity factory is a key component of the largest modernization program in the history of Volkswagen’s main location. Construction work in the Warmenau district of Wolfsburg is to begin as early as spring 2023 and will take account of building and environmental law. In so doing, the new site will meet high environmental standards. To that end, Volkswagen will engage in an intensive exchange with the relevant authorities as well as with stakeholders. The net carbon-neutral Trinity model, built using the most innovative manufacturing methods, is to roll off the assembly line from 2026. The new facility with its optimized processes will therefore become a model for the gradual transformation of production at the main Wolfsburg plant along with all other Volkswagen manufacturing sites worldwide.