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Volkswagen partners with Amazon to drive up productivity

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Herbert Diess, CEO of Volkswagen, at the annual news conference in Wolfsburg, Germany March 12, 2019. Photo: Reuters/File Photo

Volkswagen and Amazon are exploring a strategic partnership to boost the German carmaker’s productivity. Germany’s Süddeutsche Zeitung first reported on Wednesday that the world’s largest carmaker and the online retail giant are in discussions about creating an “industry cloud,” in which Amazon would help network VW’s plants and warehouses.

Volkswagen and Amazon confirmed the partnership in a press release, saying that “In future, the Volkswagen Industrial Cloud will combine the data of all machines, plants and systems from all 122 facilities of the Volkswagen Group.”

In the long term, it said, the global supply chain of the VW with more than 30,000 locations of over 1,500 suppliers and partner companies could also be integrated using Amazon Web Services technology.  

VW chief executive Herbert Diess has said he plans to increase productivity rates by one-third across all its plants by 2025. 

The Wolfsburg-based carmaker has emerged from its emissions-cheating scandal determined to take the lead in the electric car age. It plans to produce 22 million electric cars in the next 10 years, but warned that e-car production will mean huge job cuts. 

READ MORE: Volkswagen says making electric cars will lead to job cuts

This year, VW announced it would partner with Ford to develop AI driving systems. In March it said it will invest €1bn into a battery research consortium, the so-called European Battery Union.

The carmaker is also branching into energy, with its new Elli startup, which will develop charging and energy storage solutions.

While Amazon is best known for its online shopping platform, the company is also one of the leaders in cloud-computing solutions for businesses. VW reportedly wants to exploit this computing power to hit its own efficiency goals.