CARIAD's China team currently employs more than 600 people, a number that will double by the end of 2023.

Volkswagen's (OTCMKTS: VWAGY) software division CARIAD today announced the formation of a subsidiary in China, its first outside of Europe, to increase its efforts in the world's largest automotive market.

The CARIAD China team will drive the development of software products for Chinese consumers, including advanced driver assistance systems and autonomous driving, next-generation smart connectivity features, smart cabin and body design, big data and software operating systems, said Chang Qing, CEO of CARIAD's China subsidiary, in an online event.

(Chang Qing, CEO of CARIAD's Chinese subsidiary)

CARIAD is building a full-stack software technology development capability with more than 5,000 employees in Europe from more than 70 countries.

CARIAD China will work with its European headquarters to develop a unified and scalable software platform for all Volkswagen Group brands to meet the specific needs of different markets, according to Chang.

The entire technology stack will be available around 2025 and pre-equipped with L4 autonomous driving technology.

Currently, the CARIAD China team has more than 600 employees, a number that will double by the end of 2023, of which more than 90 percent will be local software talent, Chang said.

CARIAD China will eventually establish a nationwide distributed R&D network to become a software company with a flexible and innovative work model, and will first set up R&D forces in Beijing, Shanghai, Chengdu and Hefei.

CARIAD was established in 2020 and became independent in early 2021.

Last July, Volkswagen announced its "2030 NEW AUTO" strategy to accelerate its transformation into a software-driven mobility service provider. CARIAD will play a key role in this transformation.

Volkswagen aims to have CARIAD develop an industry-leading software platform by 2025.

In the current phase, the CARIAD China team is investing efforts in smart driving and smart cockpits for vehicles, as well as vehicle-road collaboration capabilities.

The team is building a new, agile software product development process, which includes the "Forward" innovation initiative.

Through a more agile, rolling product innovation planning and development approach on a quarterly frequency, "Forward" is outputting a range of results, according to Sun Wei, CARIAD China's chief technology officer.

Preferred innovations will be integrated into digital lifecycle management processes and systems for the electrical and electronic architecture product line and eventually brought to market through the relevant vehicle models once development is complete, according to Sun.

In the first quarter, the first act of "Forward", the CARIAD China team presented a total of more than 80 innovative ideas, according to Sun.

The team selected six applications with the most market potential, covering areas such as advanced driver assistance, intelligent cockpits, remote services and infrastructure, and will further develop them over the next three to six months in order to continue to deliver innovations to the product line.

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