How India Became Volkswagen's Command Centre for Software-Defined Vehicles

When Volkswagen Group set out to transform itself into a software-defined automotive giant, it quickly realised that just investing in technology wasn’t enough. For the German multinational conglomerate, which sells vehicles in 153 countries and operates 114 automotive manufacturing plants worldwide, it was important to narrow down on where that technology gets built. 

At the centre of this shift in India is Embitel Technologies, a company that has evolved from an independent automotive engineering firm into Volkswagen’s strategic, in-house innovation partner.

Founded in 2006 by Sharad Bairathi, Embitel began with a firm conviction: software would become central to the automotive industry.

“I started the company in 2006 with a clear focus on the automotive space, because I strongly believed that software would eventually play a very significant role in the automotive industry,” the founder and managing director tells AIM.

However, breaking into the automotive supply chain wasn’t easy. The early years were marked by slow traction and structural barriers.

“The first four to five years were quite challenging because the automotive ecosystem is very vertically integrated, and it is not easy for a new supplier to enter the supply chain,” Bairathi explains.

Embitel then invested heavily in proprietary IP—accelerators in infotainment, telematics, and over-the-air (OTA) systems. One of its early breakthroughs was developing an Android-based infotainment system before such platforms became mainstream.

This early bet paid off during the electric vehicle boom. “We realised that many of the new EV companies in Silicon Valley did not have a fixed supply chain… They were much more open to working with new partners,” he states.

By the time Volkswagen entered the picture in 2019, Embitel had both a mature engineering team and a proven product portfolio. The alignment was clear, the Bengaluru-based automotive software engineering firm was acquired by the group in 2022.

The “GCC Plus” Model

Today, Embitel operates under a “GCC Plus” strategy—a hybrid model that blends captive centre capabilities with external market exposure.

The structure allows many GCCs, which have strong expertise in areas like engineering, analytics, and digital transformation, to go beyond their internal demand cycles. Adding an external client layer allows for better use of resources, varied revenue sources, and greater relevance in the market. 

“The GCC (global capability centre) component refers to the work we do for CARIAD (Volkswagen Group's automotive software company)… The ‘Plus’ element comes from the fact that… we also work with a wide global customer base,” Bairathi says.

Unlike traditional GCCs, which operate in isolation, this model allows Embitel to stay externally benchmarked. “We are not inward-looking. We are working with outside companies, so we know what is happening in the market.”

Roughly 30% of its revenue still comes from beyond Volkswagen customers. According to Tracxn, the company earned ₹374 crore ($44.3 million) in FY25.

This diversification also helps position the GCC as a global capability hub instead of just an internal function. “The primary driver behind the GCC+1 model is the need to make better use of existing skills and change the view from a cost centre to a value-generating entity,” comments Alouk Kumar, Founder, CEO, and MD of advisory company Inductus Group. 

Kumar further adds that the parent organisation should remain the anchor client, keeping ownership of key programmes, intellectual property, and long-term strategies. External engagements should be secondary, targeting non-competing clients in similar sectors or regions.

There are a few other GCCs that follow a similar model, including Acrolab and Rare Crew, however, they are not fully declared GCC+ models like Embitel’s.

Building the Core of Software-Defined Vehicles

At the heart of Embitel’s work is a shift from component-level engineering to full-stack ownership. The company is deeply involved in building the software backbone of next-generation vehicles.

“Volkswagen is one of the few OEMs building the complete software stack… from hardware to the application layer,” Bairathi explains.

This includes ADAS (Advanced Driver Assistance Systems), EV powertrain and battery systems, connectivity and infotainment, and data and AI platforms.

ADAS, in particular, represents a major transformation. The company has a 400-member ADAS team—50 of whom are AI specialists.

“Initially, ADAS was a rule-based system… Going forward… this is where we are using AI,” he states. “We are building perception-based AI modules… At Level 3+ and Level 4, AI is fully utilised.”

While AI adoption has been rapid in sectors like retail, automotive has taken a more cautious path—and for good reason.

“In the automobile industry, safety and security are extremely important… Decisions that could affect safety have to be processed in the car itself,” Bairathi explains.

This creates a fundamental architectural challenge of balancing edge and cloud computing. “For real-time decisions… you cannot wait for the cloud because of latency.

Perhaps the most defining aspect of Volkswagen’s strategy is its insistence on keeping critical technologies in-house. This includes core systems like ADAS and EV platforms, which are treated as strategic intellectual property. In an industry historically dependent on tier-1 suppliers, this marks a significant shift toward vertical integration in software.

Talent: The Real Bottleneck

As ambitious as the technology roadmap is, execution hinges on talent. “It is very tough to get people with both AI and automotive domain expertise,” Bairathi informs.

According to a PwC report, automotive GCCs have an average attrition of 15–20% due to lack of high-quality work, job dissatisfaction, and competition from pureplay technology players. There is also a lack of availability of trained workforce with low practical experience, even if they are qualified.

The company is addressing this through a mix of lateral hiring and structured training programmes. “We take the people and train them on the automotive skill set… and then build up that expertise,” 

The focus is not just on technical skills, but also on product thinking.

Currently, much of Embitel’s testing happens in simulated environments—model-in-loop, software-in-loop, and hardware-in-loop systems. But that’s set to change.

“In the future, we can have our own car here… and the team can do the testing,” he clarifies.

The goal is clear: end-to-end ownership, including real-world validation, within India.

Internally, Embitel has declared 2026 as the year of AI-led innovation, with organisation-wide upskilling and dedicated investments. The company is allocating 2–3% of its revenue toward building AI-driven IP, including tools that improve engineering efficiency.

“We have built a framework to reshape testing… and increase efficiency by 40%,” Bairathi explains.

Beyond internal gains, the focus is also on embedding AI directly into vehicle features.

With a current team of over 1,600 and plans to scale to 4,000 by 2030, Embitel is positioning itself as a core engineering hub for Volkswagen’s global operations.

“We are definitely a strategic asset for them and their best in-source partner,” he concludes.