Source: Gasgoo Author: Tan Xuan
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Despite the challenging market environment, the Volkswagen Group achieved a solid performance in 2023, with revenues of €322.3 billion, up 15% year-on-year, with revenue from licensing fees from CARIAD, the Group’s software division, also up about 30% year-on-year.
Specifically, in 2023, CARIAD licensing fee income reached 1.1 billion euros, an increase of 35% year-on-year, mainly benefited from the software developed by the department is being increasingly applied to the group’s vehicles according to plan; but by the business model, CARIAD operating loss of 2.4 billion euros (about 18.9 billion yuan), an increase of 16% year-on-year.
It is reported that, according to the Volkswagen Group’s 2022 financial report, CARIAD’s revenue in 2022 was 800 million euros, an operating loss of 2.1 billion euros.
Overall, the Volkswagen Group is working to increase CARIAD’s revenues, but CARIAD’s losses have increased due to the significant upfront resources invested in the development of its future software architecture, although the group will realise the benefits of these investments in the future by way of licence fees. In addition, the Volkswagen Group is accelerating the launch of core software products, such as the Porsche all-electric Macan and the Audi Q6 e-tron, which will be launched this year.
Image source: Volkswagen
It is worth mentioning that the Volkswagen Group is further promoting the development of CARIAD in the Chinese market, so as to more quickly apply intelligent technology to the products of the group’s brands and steadily expand its intelligent connected car product portfolio.
On the one hand, CARIAD China currently employs more than 1,000 software specialists and is accelerating the integration of the latest digital technologies into the models of the Volkswagen Group brands. On the other hand, the Volkswagen Group has also established partnerships with several Chinese high-tech companies, including the joint venture with Horizon, CoolRide. The company focuses on continuously improving its R&D capabilities and chip design capabilities in advanced driver assistance and autonomous driving functions; CARThunder, a joint venture with CART, to further expand its infotainment systems; and Shanghai Mu Chuan Industrial Design in enhancing user experience.
Image source: Volkswagen
In addition, CARIAD announced on 28 February that Han Sanchu will succeed Changqing in the management of CARIAD China from 1 March 2024, and will lead CARIAD in the rapid integration of cutting-edge technologies into the Group’s branded models for the Chinese market.
