The complexity of new cars will lead to consolidation, says VW’s Hitzinger

FRANKFURT – The auto industry faces a new wave of consolidation as cars become electric, connected and add highly automated driving functions, Alexander Hitzinger, head of Volkswagen’s Project Artemis, said on Wednesday.

“You will see consolidation. Not everybody can afford these complex platforms. We will have emerging a smaller number of large players who will drive this modification,” Hitzinger told the FT’s Way forward for the vehicle summit.

The have to connect autonomous driving sensors to electric motors, batteries and high-definition maps is forcing carmakers to design vehicle underpinnings and car software operating systems in house rather than stitching together legacy code and systems supplied by a myriad of suppliers.

Project Artemis is VW’s attempt to do just that.

“Cars are so complex that the traditional concept in which you outsource to tier one manufacturers does not work anymore,” Hitzinger said in a webcast.

The investment sums and the complexity from the technology favors larger players since falling sales, brought on by the COVID-19 pandemic, is which makes it harder for smaller companies to stem the investments needed to develop cutting edge cars, he explained.