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December 1, 2024
The automotive industry is undergoing a profound transformation. Groundbreaking innovations such as electromobility, autonomous driving, and comprehensive connectivity are shaping the industry and presenting established manufacturers with new challenges. At the center of this transformation is software, which increasingly defines the functionality and value of vehicles. German automakers, long pioneers in engineering and hardware, must now adapt and strengthen their software expertise to remain competitive internationally.
Traditionally, the focus of German car manufacturers has been on perfecting the combustion engine and developing complex mechanical systems. The increasing importance of software in the vehicle, however, requires a rethink. While in classic combustion engines a multitude of control units – often over 150 – each with its own isolated software control different functions, new market players like Tesla, BYD, or Nio rely on a centralized software concept. A central computer with a unified software platform controls all essential functions, enabling seamless integration and communication between individual components. This "software-defined vehicle" (SDV) offers significant advantages: Over-the-air updates keep the vehicle up-to-date, new functions can be added at any time, and interaction with the vehicle becomes more intuitive and comfortable, for example through voice control.
The shift to SDV presents German automakers with several challenges. The established structures and decades-long relationships with suppliers specializing in the development of individual hardware components make it difficult to switch to an integrated software concept. Developing a central software platform requires not only extensive know-how in software development but also an agile organizational structure and a willingness to cooperate, even with competitors. Another important factor is the Chinese market, which will grow into the largest automotive market worldwide in the coming years. Chinese customers place great importance on connectivity and digital functions in the vehicle, an area where German manufacturers have some catching up to do.
To be successful in global competition, German car manufacturers must adapt their software strategies. Partnerships with technology companies and the development of their own software platforms are crucial steps in this direction. Mercedes-Benz, for example, is working on its own operating system MB.OS, Volkswagen is relying on its software division Cariad, and BMW is developing the "Neue Klasse" with a completely redefined IT and software architecture. The increased use of open-source software and collaboration in industry initiatives can help reduce costs and accelerate innovation.
The transformation of the automotive industry is in full swing. Software is becoming the decisive factor for the success of car manufacturers. German companies must combine their strengths in hardware development with new software expertise to continue to play a leading role in the global automotive industry in the future. The development of software-defined vehicles offers the opportunity to shape the mobility of tomorrow and meet the needs of a changing world.
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