Volkswagen's Cariad sets up China software venture with ThunderSoft

Volkswagen (VOWG_p.DE) said on Thursday its software unit Cariad is setting up a joint venture with Chinese technology group ThunderSoft to develop China-specific features for the German automaker's 'infotainment' systems and car cockpits.

Carmakers are racing to source necessary expertise to offer cutting-edge software in their vehicles, particularly in China where consumers expect more sophisticated technology.

"The needs and requirements of the Chinese customers are in the center of our strategic efforts," said Ralf Brandstaetter, chairman and chief executive of Volkswagen Group China.

Cariad will be the minority investor with a 49% stake, unlike its majority position in its other joint venture in China with Horizon Robotics to develop a single chip for autonomous driving technology, in which it holds 60%.

A spokesperson for Cariad said it is investing 11 million euros ($12 million), or 80 million renminbi, in the new venture and will co-own all intellectual property from software developed together with ThunderSoft.

While some carmakers are striking partnerships with software providers, others are hesitant about losing sovereignty over the relationship to customers and sharing access to valuable data on consumer behavior generated by software in cars.

Cariad is developing its own infotainment software stack which is being launched in Porsche and Audi models and will then be rolled out across the Volkswagen Group, including in China.

The functions developed through its new joint venture will be added on top of that to meet the higher demands of Chinese customers for software and digital features in the car cockpit, entertainment systems, and connectivity to other devices.

Headquartered in Beijing and founded in 2008, ThunderSoft has JVs with Qualcomm, Arm and Intel, according to its website.

Reuters