Volkswagen plans jobs shake-up at struggling software arm

Volkswagen is planning a shake-up at the top of its ailing software arm, which has been plagued by delays and budget misses.

Cariad, the German software arm created in 2020, has been beset with problems which had led to delays in the launch of new models. One of the priorities for VW’s new chief executive Oliver Blume has been to sort out Cariad’s software strategy, which is becoming increasingly important in the era of the internet-connected car.

Cariad’s supervisory board will propose Peter Bosch, a VW veteran who in 2017 joined Bentley, as the unit’s new head, according to two people familiar with the talks. The software arm’s current chief Dirk Hilgenberg, as well as technology chief Lynn Longo and chief financial officer Thomas Sedran, are all looking for new posts within the VW group, the people said.

Bosch, who has been credited with successfully turning around the formerly lossmaking Bentley, does not have a background in software but will be supported by two additional “software experts” to be hired in the coming months.

“Cariad still needs to work with traditional car companies such as Volkswagen, Porsche and Audi and need to speak their language,” one person said.

Cariad was launched under former VW boss Herbert Diess, and the unit’s mounting issues were among the key factors leading to his departure last year.

It was created by amalgamating roughly 1,500 software developers from VW, Porsche and Audi and the unit has since hired an additional 4,000 people, with branches set up in both the US and China.

VW last week posted strong first-quarter sales figures in Europe and the US but revealed that car deliveries had further slumped in China, its most important market.

Software has emerged as a key pressure point for VW in China, where local brands have quickly taken the lead in terms of in-car entertainment and other aspects of how drivers interact with their cars.

The sole member of Cariad’s top executive team that has been asked to remain is Rainer Zugehör, with one person saying that the rapid ramp-up of the unit during Covid was the only aspect of it that had been successful.

One person said “it wouldn’t be the first time” VW executives who have failed in their role are moved into a different position within the group. “It’s normal within Volkswagen,” the person said.