Volkswagen’s commitment to design and technology in the era of digital transformation
BY SANDY STRASSER
At the Geneva Motor Show earlier this year, Volkswagen Group defined new goals for the future of mobility. With digitisation at the top of its agenda, the largest car manufacturer in the world hopes to bring in new business and more revenue. Johann Jungwirth, Head of Digitisation Strategy, answered our call for a conversation.
Mr. Jungwirth, how do you connect cars with the digital age?
The largest disruptive phase the automotive industry is in today can be seen in three dimensions. The first is the change from combustion engine to electric drive, the second is the transformation from a human at the steering wheel towards autonomous operation, and the third takes place in the field of ownership or what we call shared mobility. These three aspects are all of influence, simultaneously and also orthogonal. Volkswagen Group, continuing its manufacturing – or hardware in this respect – is now also integrating its software and services.
Where does your software expertise that will improve existing technologies come from ?
Through various ways. We have a large in-house software team, apart from these, already 11,000 employees work in IT. We are also moving to where our experts live, for example Munich. There, our data lab focuses on machine learning and artificial intelligence algorithms. In Berlin, our digital lab is specialised in cloud software and the development of applications and – of course – we are also present in Silicon Valley and in China.
What strategy makes you the leader in the car revolution?
We are leading as we develop our own system for autonomous driving which will be the heart of the car in the 21st century. Our future vehicles will be built around this system, just as before they were built around the engine. Based on the autonomous system, we can develop completely new concept vehicles, among which will be autonomous fleets for city transport of both people and goods. These will increase and democratise social mobility: individual transport for the elderly and children, the blind and the sick. Then there will also be new ownership vehicles equipped with completely new interiors. Vehicles of the future may then become lounges, spa rooms, offices and cinemas, all in one – a lot of new possibilities, so the future will be exciting.
Design and digitisation will continue to merge. Volkswagen Group has announced three new Future Centers. Where will they be and what are they meant to achieve?
The first Future Center Europe is in Potsdam, the others for Asia and the United States are currently being built in Beijing and in Silicon Valley. Their specific objective is to bring together design and digitisation. We specifically work on integrating interiors, exteriors, user experience design and engineering, so there will be a positive influence on the conception and development of our future vehicles. As we do so, completely new architectures take shape. Especially as regards interiors it is vital that we include images of our home furniture. From detached houses to luxury villas there are great opportunities, and so they will be in automotive: more flexibility and individualism will be on offer.
What shape will your company design take in the digital age?
It will be born from our Future Centers where our design and digitising experts work on the vehicles of tomorrow, of course in very close cooperation with those of our brand design departments. As mentioned before, user experience design is of great relevance to us. Design and human centricity are apparent throughout the development process and the value chain. We want to place the design of our future products and services clearly around people, our customers.
Within what time frame will you have realised your plans?
The first major steps are to be seen in the next three to five years. Then I expect the first autonomous vehicles to be on the road. It will be an exponential development, taking place globally and throughout many regions.
What new business and revenue opportunities will then open up for Volkswagen?
A huge profit pool will specifically be shared mobility, new mobility-on-demand and transportation-as-a-service vehicles. Without the use of a steering wheel or pedals these will easily and individually transport people from A to B. Here is a market which did not exist previously. Today it is very convenient: use your smartphone and you will be picked up within minutes. It is also much safer and provides the disabled, the old and children individual mobility. I am looking forward to soon offering these people more freedom. Service will play a central role and a lot of sales and profit opportunities will come through this new business. Under the banner of our “Together Strategy 2025” we seek to further narrow the cooperation between our brands. To achieve this, a new company specifically aimed at new mobility solutions is to be founded in Berlin.
How does your focus on design and digitisation affect your current business operation?
Continuous digitalisation steers our attention towards the ideal user experience. We want to create new solutions which customers can truly love because of their bespoke nature. With a lot of intelligence, predictive algorithms and a corresponding ecosystem, people can transfer from vehicle to vehicle taking their customer ID containing individual preferences and settings with them. The entire user experience ranges from personal seat adjustment, temperature control to ambient lighting and podcast. The settings will be the same regardless whether you are in your own car or a rental one, and as customer profiles are ever expanding and self-learning, each vehicle thus becomes more like a good friend who knows who you are. As a consequence, the threshold to change to a brand outside of our company range will therefore also become higher. To make a comparison with smartphone ecosystems: it is pretty hard to switch from Apple to Windows.
In this regard, what role does Industry 4.0 play for you?
Industry 4.0 is one of six pillars of digitisation, just as there are products and services, smart mobility, customers, trade and user experience. It is a wide field where a lot still needs to be done, especially in terms of new production processes such as 3D and 4D printing and as regards the complete networking of both machines and humans. Everything again is heavily based on new algorithms which in turn are based on machine learning and artificial intelligence.
Which changes in production result from existing structures and processes?
As I said, Industry 4.0 is a big pillar. Especially digital processes, predictive maintenance to autonomous self-optimisation of machines, artificial intelligence-based processes and self-learning algorithms result in a very large optimisation of structures and processes: in all, highly desirable and in for a positive impact.
Next to your digital strategy, you have launched an offensive for autonomous driving. What content is at play and how will it be positioned in the coming years?
Autonomous driving, electric and shared mobility – or mobility at the press of a button – are all topics of the future. Through our own development of an autonomous system, I can tell we have a tremendous chance to make great progress and to strongly position ourselves as very innovative. It is very important that we are at the forefront of autonomous driving, as it will massively contribute to the heart of the automobile and ultimately its reinvention. On par with that of the steam engine, railroads, cars, electricity and the computer, it is definitely another key invention that will change society for the better, advancing humanity as a whole and paying a final contribution to the democratisation of the transport industry and indeed mobility itself.
What advantages do you see for Volkswagen when compared to the competition?
Whether cars, trucks, buses or commercial vehicles – we cover all areas. That is in itself a huge competitive advantage and we have twelve extremely strong brands within our company: Seat, Skoda, VW, Audi, Porsche, Bentley, Bugatti, Lamborghini, Ducati, Scania and MAN. The hardware we have over decades mastered perfectly, and now we also act in software and services with exactly the same focus and attention to detail. Accordingly, I am very optimistic about the future as we are developing new skills for software, services, artificial intelligence, algorithms, analytics, new sensors and the development of the autonomous system.
Johann Jungwirth has been appointed Head of the Volkswagen Group’s newly established Digitalisation Strategy Department, effective November 1, 2015. Jungwirth moved to the Volkswagen Group from the American IT corporation Apple and reports directly to Matthias Müller, CEO of Volkswagen Aktiengesellschaft. With the new function and the appointment of Jungwirth, Volkswagen is strongly reinforcing its position in digitalisation, which is a very important future field for the automotive industry.
This article was published in The Produktkulturmagazin, issue Q3 2016. Picture credit © Volkswagen Group