Volkswagen accelerates software-driven mobility

According to Volkswagen’s press release, the company is advancing its transformation into a software-driven mobility provider. The German automotive giant unveiled the ACCELERATE strategy. It will systematically prepare for the profound changes in the automotive industry in good time.

Volkswagen definitely leads the way with its global electrification in the automotive sector. In addition, it is accelerating the other big themes of the future. One is the integration of software into the vehicle. The other is digital customer experience. This I because Volkswagen believes that both software-driven mobility and digital customer experience will become crucial core competencies.

The more Volkswagen implements data-based business, the more it attracts new groups of customers and taps additional sources of income. In fact, the company thinks “E-mobility” was just the beginning. Therefore, the real disruption has yet to come. The management ensures that the company will ACCELERATE towards the digital future.

Ralf Brandstätter, CEO of Volkswagen mentioned, ”In the coming years, we will change Volkswagen as never before.”

Who is Volkswagen Group?

Volkswagen Group is a German multinational automotive manufacturer, and was founded in 1937. Its head office is in Wolfsburg, Lower Saxony, Germany. The Group comprises 12 brands from 7 European countries. They are Volkswagen, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania and MAN.

There are several highlights in its ACCESLERATE strategy. First, Volkswagen will make autonomous driving widely available by 2030. Second, all-electric vehicles expected to exceed 70 percent of European and 50 percent of Chinese and US sales volumes by 2030. Third, financial targets confirmed, and operating return on sales will be at least 6 percent from 2023

What is Digital Transformation?

We discusses about the difference between digitization, digitalization and digital transformation in the other article. We can define digital transformation as it adds value to every customer interaction.

In other words, digital transformation is changing the way business gets done. In some cases, it creates entirely new classes of businesses. With digital transformation, companies are taking a step back and revisiting everything they do, from internal systems to customer interactions. They are asking big questions. “Can we change our processes in a way that will enable better decision-making, game-changing efficiencies, or a better customer experience?”

Volkswagen goes ahead digital transformation

Other automotive manufacturers should pay attention to Volkswagen’s ACCERELATE strategy. This is because the German automotive giant transforms hardware business into software, even though it is the largest car maker. In other words, the main source of value will be from automotive to its software or services. Thanks to this transformation, Volkswagen will be able to capture new revenue sources.

First, existing customers will pay fees for its services, and it will be a subscription business model. Second, both Volkswagen’s hardware and software will attract new customers across the globe. We can say this new value creation as digital transformation.

Of course, it is difficult to realize software-driven mobility because capability in software is totally different from that in hardware. Therefore, leaders should make bold decisions and take actions proactively. In fact, Volkswagen has already decided to invest 73 billion EUR in electrification, hybrid powertrains and digital technology over the next five years.

Volkswagen is a front runner in the automotive industry, so competitors cannot stop thinking and acting. If they do not take any actions, possibly they will be far behind the new game. Thus, we can expect that more automotive companies accelerate their digital-driven strategy.