The demand for auto supplier software is exploding, and the world’s biggest parts company just repositioned itself to capitalize on it.

In a bid to sell more software services and hang onto business that is slipping away to other vendors, Robert Bosch moved last week to combine its global automotive software and electronics activities into a new division that can react faster to market opportunities.

The unit, Cross-Domain Computing Solutions, will launch at the start of the new year with 17,000 employees gathered from Bosch’s Multimedia, Powertrain Solutions, Chassis Systems Control and Automotive Electronics divisions.

Harald Kroeger, a member of Bosch’s management board who now oversees those divisions, among others, will be responsible for the new division.

Bosch sees the need for a global go-to automotive software supplier.

A typical new vehicle currently requires 100 million lines of software code to deliver a growing number of safety, performance and comfort features, Kroeger told Automotive News Europe.

But fully automated vehicles will need 200 million to 300 million lines, he said.

“Software content has become bigger and bigger, and what we’re doing now is creating a new center of gravity for software-intensive products at Bosch,” he said.

Bosch has about 30,000 software engineers, Kroeger said, and about 8,000 of them will be assigned to the new Cross-Domain Computing Solutions division.

The new Bosch business will have about 700 associates in North America, mostly in two Detroit-area offices in Plymouth and Farmington Hills, Mich.

Bringing together engineers from different vehicle functions will help Bosch take a more holistic approach to developing vehicle architecture.

Bosch expects the overall global market for what it calls “software-intensive electronics systems” to grow from about $23 billion today to more than $90 billion by 2030.
That figure includes software and hardware from relatively simple electronic control units and sensors to on-board computers with microprocessors.

Kroeger said Bosch’s advantage is that it is present in every automotive software and electronics area, even having its own silicon production facilities.

Bosch ranks No. 1 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $46.6 billion in 2019.

“It will be easier for us to integrate all those parts, to offer the right interfaces, and that’s a big differentiator compared to competitors that always have a gap here or there,” he said.

The growing focus on vehicle software was highlighted by software problems with two critical Volkswagen models, the ID3 electric car and the eighth-generation Golf. The Volkswagen Group has shaken up its software leadership and organization, shifting responsibility to Audi to develop software for the group’s brands.

A McKinsey & Co. report said: “The latest automotive innovations, including intuitive infotainment, self-driving abilities and electrification, depend less on mechanical ingenuity than on software quality, execution and integration.

“A typical new-generation vehicle likely has a software architecture composed of five or more domains, together comprising hundreds of functional components in the car and in the cloud.”

But there is a wide range of competitors in the automotive software arena, from specialized startups to the world’s biggest suppliers such as Bosch and Continental, as well as automakers’ own in-house teams.

Bosch offers a range of software and hardware products to automakers, Kroeger said, many of whom choose to work with other vendors on a project — for example, running one company’s software on another’s electronics. Bosch hopes to encourage more integration, he said.
As in-vehicle computers grow more powerful to handle complicated tasks such as parking assistance, Bosch and its customers are thinking of ways to combine functions on the same hardware.

“We’re seeing more and more customers asking us to bridge all those domains,” he said.

Alexa St. John contributed to this report.