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Volkswagen has declared an investment of billions of dollars in adopting artificial intelligence in its worldwide business endeavours. The German car maker will invest in AI-based systems to the tune of 1.2 billion dollars in an effort to reduce billions of dollars in expenses. The company leaders claimed that the technology will simplify all the processes, including design and engineering, as well as the industrial processes. The relocation follows the effort of the group to enhance competitiveness in an automotive market that is getting more technologically competitive.
Volkswagen Affirms Investment in Artificial Intelligence of $1.2 billion
The investment of 1.2 billion dollars was made by the company on the debut day of the IAA car show in Munich, the biggest automobile show in Europe. Executives claimed that they are to achieve up to 4 billion euros in savings by 2035. According to Volkswagen, AI will assist in the development of vehicles, industrial uses and the growth of high-performance IT infrastructure.
The company claims that the product development is already becoming faster through the use of AI. Volkswagen would be able to reduce development cycles of the vehicles by using iterative design and virtual testing models. It is targeted at decreasing the time to introduce a new model to 36 months or less, or a year sooner than the current schedule.
Artificial Intelligence to Shrink Vehicles
The board member of Volkswagen Hauke Stars stated that AI would accelerate the rate of engineering and development and enhance the quality level. Through artificial intelligence, we are also starting the next step in our journey to be the global automotive technology driver, Stars said. She has defined the technology as our key to the promotion of efficiency in all aspects of the systems of company.
One more point that the automaker mentioned is its partnership with Dassault Systèmes on virtual testing and component simulations. This method helps to eliminate the use of physical models and enables Volkswagen to save money and increase speed in the design operations. The corporation affirmed that there are hundreds more AI applications that are on the verge of deployment in departments.
Bringing AI to Manufacturing and Operations
Volkswagen claimed that it already has over 1,200 running AI applications, some of which are dedicated to workflow optimisation. It affirmed that it planned to extend AI to manufacturing, but not much information is available. According to the executives, the integration would simplify production, reduce CO2 emissions and increase efficiency in the processes of industry.
According to Stars, the strategy of the company was described as being scalable, responsible and possessing clear industrial benefits. She, however, had a rather ambitious vision as well, and wrote: Our ambition: No process without AI. This two-pronged effort is an indication of an attempt to integrate artificial intelligence in almost all business operations.
Tactic Change in the Competitive Market
This is an investment made by Volkswagen when the company is experiencing significant shifts in two of the biggest markets, China and Germany. The group is already implementing cost-cutting programs in Germany as it strives to enhance profitability. Concurrently, there are new models being designed to ensure that it retains its position in the market despite the emerging competition.
Wolfgang Porsche, the Chairman of the Porsche brand, overturned the usual order by bringing out a small electric SUV, the ID.CROSS, at the Munich car show. The vehicle belongs to a larger strategy of providing low-cost electric vehicles as the world market increases demand. They stated that AI would also contribute to the speed of designing and manufacturing these battery-powered models.
Volkswagen is not the first company to announce the increased significance of artificial intelligence in the automotive industry. The company has projected its long-term savings by investing in AI, amounting to 1.2 billion by the year 2030, and this will turn the company around. The automaker estimated that the strategy would save up to 4 billion euros by the year 2035 through the reduction of costs.
