Dusseldorf, Munich In the automotive industry, the development of a new model follows a strictly predetermined schedule. In the so-called “product development process” (PEP), the individual development steps are sometimes even broken down into individual weeks. First drafts of a new car, profitability calculations, preparations for series production – every detail is fixed years in advance.
But the established car manufacturers have put chains on themselves. From the point of view of companies such as Volkswagen, Mercedes and Stellantis, product development now takes far too long. This realization matured in Wolfsburg, in Stuttgart and in Paris, above all as a result of external pressure. New providers like Tesla have shown the established corporations that everything can be done much faster and more flexibly. Now the German car manufacturers also want to significantly shorten their product development.
Volkswagen advertises most strongly with the fact that future model generations will go through product development much faster. “We are reducing development times by 25 percent. In the future, vehicle projects will be completed in 40 months instead of the previous 54 months,” promises Thomas Ulbrich, Board Member for Development at the Volkswagen brand. Simply calculated: A good four years should become a little more than three years in the future, which would roughly correspond to the Tesla level.
However, in order for Volkswagen to be able to fulfill this promise, Ulbrich has to reorganize its own development department. He also needs a uniform software architecture that is available across several model generations and that no longer has to be completely changed with every new vehicle. The Volkswagen Group is working on such a uniform operating system for all future vehicles, the so-called “VW.os”.
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According to Ulbrich, the shortened development times are then possible “once the basic software architecture is in place”. At Volkswagen, the uniform operating system is expected to be available in 2025/2026.
The development board of the Volkswagen brand in a Handelsblatt interview 2020.
(Photo: Nils Bröer for Handelsblatt)
Of course, shorter development times noticeably reduce development costs. That could be billions over a period of years. In order to become faster, Ulbrich also has to change the work processes in the development departments. Ulbrich speaks of “vehicle development speeding up the conversion of Volkswagen into a tech company.”
Until now, departmental thinking has dominated vehicle development. As in a silo, each individual area worked on its own component. This can be the motor for the wipers or the alternator. In this very traditional vehicle development, the individual engineer thinks less about the entire system, the car, and more about the individual component that has to be ready at a certain point in the product development process.
>>Read herewhat Tesla has ahead of Volkswagen
Ulbrich is convinced that he can break old patterns of thought in Wolfsburg vehicle development. For the new “systems engineering” there are already models from other industrial sectors such as aircraft construction, which would have to be transferred to the automotive industry accordingly. Volkswagen also wants to create the necessary structural conditions for this. The new development center “Campus Sandkamp” is therefore being built in Wolfsburg. Lonely office corridors should no longer dominate there. With a generous architecture alone, Volkswagen wants to create the conditions for its own engineers to be able to work together in a much more open and transparent manner. The car manufacturer is investing around 800 million euros in this, and construction work is expected to start this year. 4000 developers will get a job there – but employees of important suppliers will also be involved.
After all, Development Director Thomas Ulbrich plans with so-called “sprints”, as they are common in the IT industry. In crucial phases of the development of a new car, the pace of work is increased in order to be able to meet the specified time frame in any case – and in the end to actually achieve the promised 40 months of development time.
Mercedes also wants to come to 40 months
In order to survive in the battle against competitors such as Tesla, Nio or Lucid, Sony or Apple, established car manufacturers would have to “enter completely new cycles”, confirms Markus Schäfer, Chief Technology Officer (CTO) at Mercedes-Benz: “The formula is called speed .” Specifically, the Stuttgart-based car manufacturer aims to reduce the development time for main types such as the GLC or E-Class from the sketch to the finished vehicle from 58 to 40 months. Derivatives from existing series, such as station wagons or coupés, could be designed even faster, explains Schäfer.
The brand with the star has just set up an “Electric Software Hub” at the development center in the Swabian town of Sindelfingen for 200 million euros. The coders of the Dax group, the programmers, sit at the top of the eighth floor of the building. In addition, there are the pre-integration laboratories and areas for special test benches, in which control units, components and sometimes even test drives can be simulated fully automatically on the computer. Real vehicle prototypes are only tested on the lower floors.
This flowing process – from the first software lines to the physical product – accelerates development immensely, says Schäfer. Like Volkswagen, he wants to prescribe a new culture for his programmers and engineers: “Much more cross-functional”, “less hierarchy”, more locations should work together “physically and virtually”. The industrial group Mercedes should develop a new mentality – like the small Formula 1 team sponsored by Mercedes: In the future, it will be important to “get the last millisecond,” Schäfer continued.
Stellantis follows a similar approach. “We are completely decoupling the development of hardware and software,” announces software boss Yves Bonnefont. As a result, the group can offer its customers more innovations at much shorter intervals with regular software updates. “This is how we keep our vehicle fleet fresh and sometimes increase the pace of development by a factor of twenty. This opens up completely new business models for us,” emphasizes Bonnefont.
BMW does not specify how many months the development process should be shortened. Instead, the car manufacturer says that the development time has been steadily reduced with the help of new working models. That also applies to the future. “Cross-departmental teams, working according to agile methods and processes exclusively oriented towards value creation are the most important components for a significant increase in flexibility and efficiency,” explains a BMW spokesman.
Critical observers of the automotive industry are convinced that the old and tried and tested development processes can no longer be maintained. Everything has to go much faster, and that’s what the customers, the car buyers, expected in the end. New competitors have shown that this is possible. “Tesla is simply more flexible,” says Stefan Bratzel, Professor at the Center of Automotive Management (CAM) in Bergisch Gladbach. Elon Musk’s company has “greater agility” than the colossus Volkswagen, which has grown over decades. As a young and still significantly smaller car manufacturer, Tesla has an advantage.
Tesla is faster and more flexible
This was shown, for example, in the past year during the supply crisis for semiconductors. “Tesla does it better by far,” adds the professor. When certain chip types could not be delivered, the US manufacturer simply changed the software on its cars. The new software and available chips then fit together again. Tesla is not only more flexible in the development of new models, but can also intervene more after the start of production than established car manufacturers.
At companies like Volkswagen, the options for intervention after the start of production of a model are limited. As part of the usual VW model cycle, a vehicle was set for the next six to seven years. Changes were usually only possible within a narrow, predetermined framework.
The production of electric cars poses major challenges for established car manufacturers such as Volkswagen. In the event of delivery problems, young companies like Tesla can adjust their production much more quickly.
(Photo: dpa)
Thomas Ulbrich also wants to change that – with the help of a rapidly increasing software share. Future vehicle generations will contain significantly more IT and software packages. In the near future, only the software for a car will have to be rewritten to keep it technically up to date. The wireless distribution of new software “over the air” (OTA) as with a smartphone is therefore also becoming a routine process for the automotive industry.
Volkswagen is now also making progress in the subsequent modification of models that have already been launched. The Wolfsburg-based company has been selling the first cars of their new electric generation since late summer 2020, above all the ID.3 and ID.4. For the next year, Volkswagen promises significant improvements for these first pure electric cars.
For example, the charging capacity is to be increased by around 50 percent to 200 kilowatts, which means shorter charging times. In addition, the maximum range of the currently available models is to be increased from around 500 to around 700 kilometers. “Volkswagen should thus close the gaps to the competition,” believe the car analysts from the Swiss bank UBS.
At the same time, Volkswagen is also working on significantly reducing production times. A car from the new “Trinity” electric series is to be delivered in the future after a production time of around ten hours. So far, Volkswagen needs two to three times this time. Shortened production times are also intended to demonstrate Volkswagen’s new flexibility – which ultimately also benefits customers when they no longer have to wait so long for their new car.
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