Volkswagen Group has opened a new software development center in Lisbon, adding 300 IT specialists to similar facilities that already operate in Wolfsburg, Germany, and Berlin.

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VW is using agile development techniques at its new IT center in Lisbon. The company says it wants to provide a combination of a startup atmosphere with long-term stability (Photo: VW)

The opening underlines the growing importance of software in the automotive industry. “Software development for new digital services is to become a core competence for Volkswagen,” Martin Hofmann, CIO of the German automotive group said at the official opening this week.

The Lisbon facility will host 300 IT specialists tasked with developing software for digital ecosystems and VW Group IT systems. VW said 100 of them will work specifically on cloud-based services for its commercial vehicle subsidiary, MAN Truck & Bus.

Like most carmakers, VW is adopting a decentralized, global approach to IT development, underlining the need to find specialists wherever they happen to be. Lisbon was chosen because the metropolitan area has a well-integrated network of technology companies and startups as well as a strong pool of graduates from local universities, VW said. The carmaker also said the Lisbon administration has “an affinity for digital matters.”

VW’s software centers aim to recreate the kind of work environment that is typical of high-tech startups. Said Hofmann: “They combine methods such as extreme programming, pairing and a start-up atmosphere with long-term stability, innovative topics and the growing worldwide IT community within the Volkswagen Group.”

The three centers are at the heart of VW’s strategy to meet the growing demand for software, which is shaping up to be a core differentiator for tomorrow’s cars. At the centers, specialist teams work on value-added services that are set to complement the traditional automotive businesses operated by the company’s 12 car and truck brands.

The Lisbon center’s role in software development specifically for MAN Truck & Bus underscores that digitalization plays a key role in that sector as well. Said commercial vehicle CIO Stephan Fingerling: “MAN is evolving from a pure commercial vehicle manufacturer into a provider of sustainable, smart transport services.”