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

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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 Wednesday.

“There will be consolidation. Not everyone will be able to afford these complex platforms. We will see a smaller number of very large players emerge who will drive this transformation,” Hitzinger told the FT’s Future of the Car summit.

The need to connect autonomous driving sensors to electric motors, batteries, and high-definition cards is forcing car manufacturers to design vehicle and control system underpinnings for car software themselves, rather than piecing together old codes and systems from many vendors.

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

“Cars are so complex that the traditional concept of outsourcing to first-tier manufacturers no longer works,” Hitzinger said in a webcast.

The investment amounts and complexity of the technology favors larger players as the declining sales caused by the COVID-19 pandemic make it more difficult for smaller companies to curb the investment needed to develop advanced cars, he said .

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