The era of software-defined cars is coming: How can traditional car companies catch up?

More and more traditional car companies have begun to enter the field of software research and development and regard it as an important strategic direction.

Recently, the SAIC Group Software Center officially announced its name as "Zero Beam" and has since become a new entity. Toyota Motor also announced that it will establish a subsidiary focused on software to accelerate its transformation into software. Business transformation.

This is nothing new. Prior to this, car companies and parts suppliers such as Volkswagen, Bosch, and Continental had successively invested in the software business and developed the software architecture of automobiles. As a traditional industry that specializes in hardware, driven by new forces led by Tesla, automobiles are gradually entering a new era defined by software.

In the trend of automobile intelligence, networking, electrification and sharing, the status of software is self-evident. Whether it is the battery management and energy control of new energy vehicles, or functions in the field of intelligent connectivity such as smart cockpits and autonomous driving, they all need to be driven by software - the proportion of software in the entire vehicle value system has also increased dramatically.

With the direction almost certain, traditional car companies taking the software road are following the trend and it is also a helpless move. A report jointly released by Deloitte China and the AMMI Human-Vehicle Relationship Laboratory of Tongji University stated that the intelligence and connectivity of automobiles will drive the digital transformation of the entire industry and change the existing value distribution pattern and industry value transfer requirements. On the basis of the original hardware research and development capabilities, the enterprise pays more attention to and strengthens the software development and integration capabilities.

On the one hand, traditional car companies have been slow to enter the field of software research and development. On the other hand, they also have more transformation problems in systems, mechanisms, etc. This includes Volkswagen, Toyota, etc. Traditional car companies, including industry giants, face the same challenges.

Following Volkswagen, more and more traditional car companies have established new companies to develop software technology.

SAIC Zero Beam is a wholly-owned subsidiary of SAIC Motor. According to official information, SAIC Zero Beam will mainly focus on intelligent driving system engineering, software architecture, basic software platforms and data factories, including SOA software platforms, new generation centralized electronic architecture, cloud service platforms, computing chips, etc.

It is understood that SAIC Zero Beam’s business focuses on four sectors: first, the digital creative factory, to create a people-oriented digital creative team; second, the electronic architecture, to create a new generation of centralized electronic and electrical Architecture; the third is the ICV basic software team, which is mainly responsible for the architecture from the operating system, business layer to cloud-pipe-end integration; the fourth is data architecture and network security, establishing a data factory to serve artificial intelligence, and vertical businesses (smart cockpit and intelligent driving (two vertical units) interaction.

SAIC is not the only one determined to make a difference in the software field. Recently, Toyota Motor also announced that it will expand the business scope of "Toyota Research Institute-Advanced Development" to focus on software development. The company was founded in 2018 and is 90% owned by Toyota Motor.

It is said that the above-mentioned company will establish a new holding subsidiary Woven Planet Holdings in January 2021, as well as two operating subsidiaries Woven CORE and Woven Alpha.

Among them, Woven Planet Holdings will make strategic decisions, mainly promoting cooperation with external partners, creating new business models, etc.; Woven CORE will focus on the research and development and implementation of autonomous driving, and Woven Alpha will explore The business expands into new areas, such as automotive operating systems (Arene), high-definition maps (AMP) and other businesses.

Some people believe that compared to Car.Software.Org established by Volkswagen, Toyota's strategic deployment is more specific and covers a wider range of topics.

In June last year, Volkswagen announced the establishment of an independent software development department, Car.Software.Org, taking the lead in separating software and hardware businesses in the form of organizational changes. The goal is to gather 2,500 people in this department by 2025. Digital experts, involved in software development, electrical and electronic development, autonomous driving, cloud architecture and other fields.

The reason behind the entry of traditional car companies is that the concept of "software-defined cars" advocated by Tesla is gradually being recognized both inside and outside the industry. Whether actively or passively, traditional car companies hope to integrate their The vehicle is built like a smartphone, an electronic terminal that can be driven by software and iterative.

With the in-depth application of intelligence and networking in automotive products, the value distribution of the industrial chain will also undergo a profound shift. In order to avoid being left behind, traditional car companies have to make software themselves. Toyota President Akio Toyoda said in an interview with the media: "In the past, we were a hardware manufacturer, and Toyota only needed to buy software from other companies, but we must make changes. Because if this matter is left to others, it will It’s equivalent to letting others continue to upgrade. If we do our own research and development, we can continue to improve and create value.”

“In the era of software-defined cars, the value chain structure of cars will change. , 40% of the value of the entire car will come from electronics and software. If the OEM does not lay out the software, then we will just be part-time workers in the future." On July 23, Li Jun, director of the SAIC Group Software Center and deputy director of the SAIC Technology Center, said. When interviewed by a reporter from the 21st Century Business Herald, he was even more straightforward.

After the pioneer Tesla passed through the initial haze of mass production, it also attracted a large number of fans in the capital market. In the first half of this year, the market value of this emerging car company, which was founded less than 20 years ago, exceeded US$190 billion, officially surpassing Toyota and becoming the world's most valuable car company. Sales volume is no longer the most important indicator of the strength of a car company. All car companies that have been surpassed by Tesla (in terms of market value) are deeply touched.

“From the perspective of the capital market, Tesla is not a car company, but a high-tech company. It has always positioned itself as a high-tech, Internet-based, and software-based company. This is also the transformation of the automotive industry. direction." Chen Hong, chairman of SAIC Motor, said frankly at this year's annual shareholder meeting that Tesla has blazed a path to the future of the automotive industry and has taken the lead among all car companies.

Li Xingyu, Vice President of Horizon Strategic Planning and a senior expert in the autonomous driving industry, wrote online that although Tesla uses new energy vehicles as its entry point, new energy is not its significant advantage compared to traditional car companies. , what really makes Tesla stand out is its radical intelligent technology - just as Apple subverted the mobile phone industry when it launched the revolutionary intelligent product iPhone, Tesla's smart cars relying on Autopilot as the core also subverted traditional cars. industry structure and stimulate the industry to accelerate transformation in a non-linear manner.

However, it is not easy for traditional car companies to compete in the software business.

Volkswagen’s exploration over the past year or so has sounded a wake-up call to the industry - product software has repeatedly experienced problems, the head of software research and development has resigned, and the group CEO Herbert Diess, who promoted changes, has been reduced from power... …

The transformation of traditional car companies may be more difficult than imagined: on the one hand, software is a completely different field for car companies, and car companies need to invest a lot of resources (including time and money) To promote software research and development; on the other hand, although the intelligence and networking of automobiles are the general trend, it is difficult for car companies to achieve a complete understanding of whether it is necessary to spend a lot of resources on self-research of software.

Li Xingyu made a metaphor that corporate transformation is almost equivalent to "removing parts from an old machine that is still running and then assembling a new machine." It will inevitably touch the vested interests of many parties. It will also be limited by the organizational structure. From this perspective, traditional car companies are even less likely to win than new car-making forces.

At the end of last year, Volkswagen ID.3 was first exposed to software problems, and its launch was delayed as a result. ID.3 is Volkswagen's first mass-produced car based on the MEB platform, and it is also the model to be equipped with its newly developed operating system. According to local media reports, many system components in the basic architecture of ID.3 are incompatible, resulting in "300 software vulnerabilities being discovered every day."

The shortcomings in the system may be the root cause of these problems. In June this year, former Audi R&D director Peter Mertens shared his views on related issues with the media: Under the professional manager system, Volkswagen software development has major drawbacks, including excessive pursuit of profits, excessive outsourcing, etc., which are continued internally. The traditional "integration" approach in the automotive industry is not as good as buying.

One detail is impressive. During the recruitment of technical personnel in the new company, Li Jun required that most of the people have a higher salary than him. "I told HR that if the salary of more than half of the people recruited is not higher than mine, the software center has no reason to succeed."

In his view, it is indeed difficult for car companies to make changes in software research and development, but Enterprises also have the advantages and potential to succeed, because car companies have a complete set of gameplay and logic in the automotive industry.

"The cost of software is very high. Without innovative marketing and business models to support it, software-defined cars are just a theory and will not succeed." Li Jun believes that software-defined cars will not only change It’s technology, but also company vision. Every company’s vision and genes are different, and this often determines how far a company can go.

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