Volkswagen's new Car.Software organisation will operate as an independent business unit from 1 January, 2020, the automaker said.
As a VW group company, it will centralise workers and subsidiaries which develop software for cars and so called digital ecosystems.
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Initially, around 3,000 people will be grouped into this unit based at Audi Electronics Venture with other German sites including Berlin, Bochum, Ingolstadt, Stuttgart and Wolfsburg. International locations include Seattle and Beijing.
Digital specialists at group brands and regions will also work under the Car.Software mantle.
Expansion plans include recruiting skilled workers from the Volkswagen Passenger Cars, Audi und Porsche brands to transfer to the organisation.
By 2025, 10,000 people will develop software for vehicles, digital systems and customer focused functions at dealers.
Further development may see a software brand added to the VW group.
VW's Christian Senger, head of digital car & services, with group-wide responsibility for in-vehicle software, said: "We will increase our competitiveness in the group by controlling a much larger share of the value creation in the digitalisation of our vehicles. We will also develop software on a cross-brand basis. This will allow us to achieve important synergies and economy of scale for all brands."
Human resources chief Gunnar Kilian said: "Together with employee representatives, we have agreed that the new organisation will have competitive working conditions based on collective bargaining agreements."
Volkswagen aims to boost its in-house share of car software development from less than 10% now to at least 60% by 2025.
Car.Software will develop cross-brand software for: Connected Car & Device Platform, Intelligent Body & Cockpit, Automated Driving, Vehicle Motion & Energy and Digital Business & Mobility Services.
The goal is one uniform software architecture for the group and combination of parallel development paths in the brands.
Development will be done on one standard vehicle operating system – vw.os – for all group vehicles and their connection to the Volkswagen Automotive Cloud, a standardised infotainment platform, all assistance systems including automated driving functions, software functions for connecting the drive system, chassis and charging technology, and systems for all of the brands' mobility services and digital business models.
Car.Software will spend EUR7bn by 2025.
"Having a uniform software architecture will enable VW to generate sizeable group economy of scale, substantially reducing per vehicle software costs across all brands," the automaker said.
