Dive Brief:
- Volkswagen Group extended a longstanding partnership with AWS for another five years as the car manufacturer aims to fast-track AI and its “factory cloud,” the company said Thursday.
- The two companies collaborated to develop Volkswagen’s Digital Production Platform, or “factory cloud,” which is designed to support AI deployments and helps standardize IT rollouts. These efforts have led to “medium-term savings in the double-digit million range,” Volkswagen said.
- “We are consistently digitalizing and connecting all areas of our company,” Hauke Stars, member of the board of management for IT at the Volkswagen Group, said in the announcement. “[DPP] plays a key role in this: it is the digital nervous system of our factories – and the key to a future of AI-powered production.”
Dive Insight:
Carmakers are looking for ways to help buoy the business amid challenging economic conditions and the financial strain of tariffs. AI has emerged as a powerful lever.
Ford, General Motors and Toyota are accelerating AI adoption to unlock efficiencies and cut costs. Ford’s AI efforts in product development are saving weeks’ worth of effort, according to executives. Digital twins are helping GM save time and money, while Toyota pursues productivity gains via AI agents.
Volkswagen said that it has more than 1,200 AI applications for software development and improving quality control systems, among other use cases. Cost savings come from several areas, such as “substantial reduction in Volkswagen’s manual workload” and decreased energy costs via AI-powered optimization, the company said Thursday.
With tech top of mind, vehicle manufacturers are boosting technology leadership. Toyota appointed a CTO for its North American operations earlier this month. BMW announced a new head of its U.S. technology office in July. General Motors added an AI leader to its C-suite in March.
The sharpened focus on emerging technologies has put a spotlight on foundational processes and systems.
American Honda has invested in and iterated on its data foundation and governance procedures to better support AI endeavors, and Volkswagen has too.
“Volkswagen and AWS have developed the DPP into a key digital link helping connect order intake, logistics, and manufacturing – helping ensure seamless data flows throughout the entire process chain,” Volkswagen said. “This is a fundamental prerequisite for the widespread use of AI, a core strategic objective of the company.”
