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Volkswagen Group may fire most of the executives of its software division CARIAD next week to solve development problems, foreign media reported. After the dismissal, only Rainer Zugeh ö r, head of personnel, is likely to remain in the CARIAD department, and all other executive directors will be fired, and the CARIAD supervisory board is expected to approve layoffs at next week's meeting.

According to the report, a spokesman for Volkswagen Group said in an interview with German media on Friday night: "We are currently analyzing the CARIAD and the project very carefully." In the process, decisions have been made, such as arranging the software architecture in a timely manner. However, the spokesman said: "A decision on possible personnel changes has not yet been made."

In response to the above news, the relevant person in charge of CARIAD responded to the media: "No comment on this matter."

The Volkswagen Group has repeatedly stressed that CARIAD and automotive software development are an "indispensable" part of the Volkswagen Group, but production of two important new models, the Porsche e-Macan and Audi Q6 e-tron, was delayed because the business was over budget and failed to meet development targets. In addition, software development delays and cost overruns also contributed to Deiss's departure in September last year, and the division was subsequently taken over by Volkswagen Group's new CEO Oliver Blume.

After taking over, Oliver Blume, the current CEO of Volkswagen Group, decided to evaluate and adjust CARIAD's strategy, and made the decision to abandon the past highly self-research and seek collaborative development with more partners, but Volkswagen Group said at that time that it would not lay off CARIAD, but would refocus on efficiency. The industry believes that if the above news is true, it may mean that the strategic adjustment process of CARIAD is still not smooth, but CARIAD may change fundamentally after the innovation.

CARIAD and automotive software development are part of an important strategy for Volkswagen Group, which plans to develop a new software platform capable of "L4" self-driving in 2026, but the release of the platform was later delayed until 2030. Volkswagen Group reported in 2022 that CARIAD had revenue of 800 million euros and operating loss of 2.1 billion euros in 2022.

According to Automotive Industry concern, the software department CARIAD (Car I Am Digital) is a business of Volkswagen Group, founded by Herbert Deiss, former CEO of Volkswagen Group, and formerly known as Car.Software Organisation, the Volkswagen Software Division established in 2020.

At present, CARIAD has about 5000 engineers and developers around the world, who are mainly responsible for creating a new and unified automotive operating system for Volkswagen's future electric vehicles. As an important part of Volkswagen Group to promote the transformation of electrification and intelligence, CARIAD has always been highly expected by Volkswagen. However, due to the company's lagging research and development progress, mass production plans for new cars launched by several brands, including Audi, Porsche, Volkswagen and Bentley, have been pushed back again and again, and the first Volkswagen ID.3 model with the company's independently developed on-board operating system VW.OS has also been frequently complained by car owners for software failures. Although Volkswagen Group attaches great importance to CARIAD, the above series of problems have also caused dissatisfaction among the management of Volkswagen Group. To this end, Herbert Dis has further increased its investment in software, even turning the unit into an independent CARIAD, avoiding interference within Volkswagen and setting up subsidiaries in a number of countries around the world, including China.

In China, as an important market of Volkswagen Group, CARIAD has successively established joint ventures with Horizon and China Kechuangda within a year.

In April 2022, CARIAD announced its China strategy and established a Chinese subsidiary. After the establishment of this subsidiary, CARIAD China also became the first subsidiary of CARIAD outside Europe. The subsidiary focuses on Chinese localization R & D and adaptation in six areas: user experience, user interaction, advanced auxiliary driving systems and self-driving, vehicle and system integration, data processing, and hardware design and adaptation.

In October 2022, CARIAD announced the establishment of a joint venture with Horizon in China to speed up the development of advanced driving assistance and autopilot systems for the Chinese market. To this end, Volkswagen Group plans to contribute about 2.4 billion euros (16.8 billion yuan), which is the largest single investment in Volkswagen's 40 years of entry into China. After the establishment of the joint venture, CARIAD holds 60% of the shares.

On April 13 this year, CARIAD announced the establishment of a joint venture with China Tech Chuangda, which is the second joint venture established by CARIAD in China. After the establishment of the company, CARIAD and China Cochuangda own 49% and 51% respectively. The two sides will focus on the R & D and testing of software products and solutions in the areas of Smart Internet and infotainment systems, and provide software development services such as operating system, human-computer interface, cockpit and cloud.

Although CARIAD's overseas business is not progressing smoothly, the localization of CARIAD in China is well under way. As for the news that CARIAD will fire most of its senior executives next week, it is not clear whether the landing of the localization project in China will be affected. "Automotive Industry focus" will also continue to pay attention.

According to the latest financial data, Volkswagen Group's revenue rose 22% year-on-year to 76 billion euros in the first quarter of 2023; pre-tax profit fell 27.6% to 6.453 billion euros; operating profit fell to 5.7 billion euros from 8.3 billion euros in the same period last year; operating profit was 7.1 billion euros, up 35% from a year earlier; profit margin was 9.3%. In addition, the loss of CARIAD, Volkswagen's software division, increased slightly from 416 million euros to 429 million euros compared with the same period last year.

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