VW names Bentley exec as head of Cariad software unit

Volkswagen Group CEO Oliver Blume is bringing in Bentley's production boss, Peter Bosch, to turn around its troubled software division Cariad.

Bosch will replace Dirk Hiligenberg as Cariad CEO effective June 1, VW said in a statement on Monday. Bosch is a VW Group veteran. He was appointed Bentley's head of manufacturing in 2017.

Two other members of Cariad's top management -- chief technology officer, Lynn Longo, and finance boss Thomas Sedran -- will also be replaced, according to media reports.

Bosch will also take over financial management at Cariad, and Thomas Guenther, currently a senior vice president at Cariad, will join the board in a technology role, sources told Reuters. Bloomberg reported that  Porsche's software chief Sajjad Khan will join Cariad’s board.

Bosch will restructure Cariad and explore new partnerships with tech companies while also expanding VW Group's automated driving cooperation with Intel's Mobileye, reports said.

The shake-up is Blume's first major restructuring move since he became VW Group CEO last September, replacing Herbert Diess. Cariad has exceeded its budget and failed to meet goals, contributing to Diess' departure. Sources said at the time that Diess' failure to put Cariad on a robust track contributed to his ousting.

The unit's problems have delayed the launches of the Porsche electric Macan and the new Audi Q6 e-tron. Both EVs are key models for the two brands' electrification strategies to compete with Tesla. The brands' executives have put intense pressure on Blume to reorganize Cariad and return more responsibility for software development to individual brands, according to reports.

Blume's predecessor Diess had wanted Cariad to challenge Tesla's software leadership including creating a scalable EV software platform completely in-house. But Porsche and Audi complained that Cariad is too closely interwoven with their development processes causing internal discord and project delays. There were also significant software glitches for VW's ID electric model range.

The planned launch of a groupwide structural car software, initially designed to enable the fourth of five levels of autonomous driving from 2026, has been postponed by two years.

Cariad will not be closed down, despite speculation that this was a possibility, because if that happened "we wouldn't get any cars on the road for the next year and a half," a VW Group executive told the Frankfurter Allgemeine Zeitung.

Blume is not planning to shift gears completely at the unit with the new leadership, sources told Reuters on Monday but he does intend to place greater emphasis on partnerships to get the automaker's software plans underway, rather than going at it alone.

"We will certainly make some changes, but this is not a 180-degree turn," one source said.

Cariad employs 6,000 people globally.

Reuters and Bloomberg contributed to this report