Volkswagen, one of the world’s largest automakers, is converting itself from a manufacturer of passenger cars to a “device and a software” company. US$4 billion, to be invested in “We” banner of digital services, which will include a host of apps – We Share, We Park and other connected services for users of Volkswagen branded vehicles. For instance, by 2020, a Volkswagen user can transfer the digital key of his vehicle to another user to enable car sharing.
Volkswagen is competing with automotive rivals – Daimler and BMW in ride hailing/sharing services. Moreover, with Daimler and BMW combining their services, and other new start-ups venturing into the digital services space, Volkswagen is concerned with losing its leadership position in the new automotive “digital ecosystem” – which consists of electric vehicles, connected cars and mobility providers. With ride-hailing services, Volkswagen will push its electric car sales in key cities.
Volkswagen has been partnering with technology companies such as Nvidia and Didi, and with this investment, it could further try to dominate the “digital ecosystem” with partnerships, investments and acquisition. The next logical step for Volkswagen should be standardize its software in its sub-brands such as Audi and Skoda to increase user base and attain economies of scale. - Aman Madhok