Volkswagen’s software subsidiary, Cariad, is in crisis, as VW CEO Oliver Blume seeks to dismiss four of the subsidiary’s top managers. The affected managers are said to have already been informed, and the VW supervisory board is due to make a decision on layoffs next Wednesday. The reasons behind the proposed dismissals include internal struggles for power and competence, quality problems, and the pressure from premium brands within the VW car group. For Blume, the Cariad crisis represents his first major test as Diess’s successor. The development of the software business is central to the future of VW, alongside the expansion of e-mobility.
The Cariad IT division’s focus is on the development of its own car software, which is essential for VW to keep pace with Tesla and Chinese manufacturers. However, there have been problems and setbacks in the past, with pressure from the Porsche and Audi brands adding to the difficulties faced by Cariad.
Blume and the VW Group are keenly aware of the importance of software development to the future of the brand, with the carmaker investing €2.5 billion in Cariad annually. November 2020 saw Blume emphasising the significance of software development when problems emerged with the Trinity project. Porsche and Audi’s pressure on VW reveals their concerns over further delays in important vehicle models.
While personnel changes at Cariad have yet to be officially confirmed, the development is being carefully scrutinised. The situation at Cariad and its projects will be assessed in the run-up to the next VW general meeting, and the software subsidiary will be restructured should it be deemed necessary.