CARMAKERS ARE appointing chief software officers, presenting strategy at '' software days '' and setting up software divisions.

A new seven-storey building at the Mercedes plant in Sindelfingen, built at a cost of Euro 200 million, will house a third of the firm's 3,000 software engineers.

CARIAD, the software unit created by VW in 2020, has a large site in Ingolstadt, not far away, for its  6,000 software employees.

STELLANTIS aims to have 4,500  software engineers by 2024. 

GM had planned to hire 8,500 in 2022. But only VOLVO and FERRARI have CEOs with a background in technology.

How much and what to keep in-house remains a big-issue. VW says it once-stated ambition to develop 60% of its own software was a means to reinforce the importance of software rather than an actual target.

Most car firms have settled on developing no more than 20-30% in-house. 

As UBS puts it, carmakers that want to-do everything are ''set up for expensive failure'' but those relying ''100% on external software stack'' are the '' worst case........ for brand equity ''. 

Most carmakers realise that they should concentrate on what they can do better.

That means having a clear view of what is best kept in-house but also trying to stay in control of what is bought in.

Ola Kallenius of Mercedes-Benz says the role of legacy car firms is to become '' the architect of the house''. Its creating its own operating system and teaming up with the best contractors, such as Nvidia for chips, and deepening a partnership with Google to improve navigation systems.

Mr. Kallenius argues that car firms still have a vital role as integrators, as no tech firm can deliver off-the-shelf software for all four separate domains of driving, charging, comfort [ such as lighting and messaging seats ], infotainment and autonomy.

Carmakers need to strike deals with tech firms that are also eyeing their businesses as a potential source of new revenue.

But do drivers want a proprietary system or rather something closer to what they are already familiar with from their phones?

In 2022 RENAULT announced a deepening of its relationship with Google's Android Automotive,  which lets drivers access phone features and apps, to speed up its digital transformation 

The Master Essay Publishing continues. The World Students Society thanks The Economist.


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