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The entire automotive world is being completely redefined and reshaped – and the main force behind this seismic shift is something that you cannot see. Software is driving enormous change in the industry, be that in safety advances, speed of car design and development, and even in the pinnacle of motorsport, Formula One.

To try to understand the enormous impact that software is having on the industry as a whole, Autocar and technology giant Siemens recently hosted a webinar featuring Uday Senapati, Siemens Head of Automotive, Battery and Mobility for the EMEA region; Rickard Arvidsson, Head of Product Strategy and Architecture on Software Engineering on Volvo Cars; Daniel Watkins, Red Bull Racing’s Head of CAD and Product Lifecycle Management. The event was hosted by Autocar Deputy Editor Felix Page.

To hear the conversation in full, watch the recorded webinar on Autocar Business.

Software does the hard work

So, what exactly is software? Uday Senapati of Siemens explained: “Software is the blood that flows through a car’s nervous system. It’s the recipe that makes everything work. For example, a smartphone is just a paperweight without software.”So if software really is becoming the lifeblood of automotive development, its reach must be becoming ever wider. Volvo’s Arvidsson agreed, saying: “For Volvo software is replacing hardware as the primary driver for innovation, and about building in the thing that’s most important for us – safety.

“It’s also about improving the car all the time – improving suspension feel, enhancing charging speeds, introducing new sound experiences. And it’s about deploying the latest safety features in the car.”

Traditionally, Formula One has been a test bed for innovative technology that in some cases eventually filters down to the road arena. Think paddle-shift gearboxes, the use of carbon fibre to enhance lightness and safety, ever-increasing electronics such as traction control and active suspension.

Being at the cutting edge, F1 is hugely reliant on software, as explained by Red Bull’s Daniel Watkins: “Software is absolutely central to everything we at Red Bull do as an F1 team. We use it in the design of the car, we use it to predict what will happen in a race, and we use it to help us decide when to make pitstops – and we do this all in real time.”

The team does this in partnership with Siemens, which provides the software that keeps it competitive. Watkins added: “We rely on software tools provided by Siemens to help us gain a competitive edge. More and more we see that our car is as much a rolling software platform as it is a mechanical machine.”

For Siemens’ Senapati, the transition of the automotive world has been a long time coming, although it is rapidly gathering pace. He said: “The first electronic control unit appeared in cars in the 1970s, but now 50 years on we’re in a world where you define and design the software, then build the car around it.

“At Siemens we touch the end-to-end journey of the car, from concept, through the design process, getting it through building and testing in a digital environment. Through this involvement, we cut development times by up to 30%.”

Virtual and reality

This is something that’s extremely important to Red Bull, which relies on software to help it decide whether or not to make new parts. Watkins explained: “We do a huge amount of virtual simulation before we commit to making something physical. The correlation of those digital tools is really important. In F1, whoever’s doing that best, whoever’s got the best tools, the best software simulation processes, will be at the forefront of the racing on any given weekend.

“It’s a symbiotic relationship between car, driver and software tools.”

This sort of symbiotic interaction between the digital and the human is vitally important to Volvo and its road cars. As Arvidsson said: “It’s critical that they work together. For example, we’ve been gathering crash data since the 1950s, but in addition to that it’s important that you know how your product is used. That information needs to go to the people providing the code and those developing the features, to allow them to bring innovation to their daily work.

“Being a coder for a big automotive brand is really fun, because you end up driving the product you’re actually coding for. It’s fun to deliver a safe and sustainable vehicle.”

Volvo is also using software to develop the daily experience for owners of its cars. “As well as virtualising different parts of the vehicle, we can also virtualise the user experience… including how the car drives on the road.”

Faster, faster development

The need for ever-shorter development times is something that is exceptionally important in the industry, and it will only become more so in the future as companies bid to keep up with the searing development pace set by Chinese car makers. And that’s where the expertise of Siemens is going to be crucial. 

Uday Senapati told the webinar: “Chinese companies have really embraced their technology and really embraced the definition of software-defined vehicles. For them it’s software first, followed by the vehicle, then the customer experience.

“But they start with the question: ‘why are we doing this?’ Customer demands are changing rapidly, as is the world geo-political situation, and the economic situation, so the winner will be a company that can act and react extremely quickly.

“At Siemens, we’ve always worked on creating an end-to-end solution. From gathering raw materials, bundling them into module systems, and then the final product. After that, it’s testing that product; physical testing is not just expensive, it’s also time consuming. We’ve worked for decades to simulate such things in our labs, so we’re accelerating our testing and our learning.”

And now AI is speeding things up further. Senapati added: “We’ve embedded AI in almost all of our toolsets, so it’s not just a human element of learning from the software, it’s the software learning itself as well, and giving better answers every day.”

To put that in context, Senapati said that software advances have reduced product development cycles by over 30%. “Some of our customers are doing an all-new car, including the platform, in 36 months, while a new variant arrives in 12-18 months,” he added.

And while he thinks that software can replace the vast majority of development processes, he also reckons elements where human perception shapes a product cannot be replaced by an entirely virtual process, mainly because it’s these areas that car makers use to define their brand. That said, Siemens is investing in AI to focus on these areas.

Save time and money

Streamlined development saves money, too. As Red Bull’s Watkins said: “We rely on simulation testing, and software underpins our ability to work within the F1 cost cap. Our virtual tools allow us to do more for less.”

Software is vital not only in how we develop cars, but also how the finished vehicles interact with the infrastructure around them.

As Senapati said: “Hardware can’t keep up, so the solution is software, because you can keep updating it to keep up with what’s changing in the infrastructure.”

Volvo’s Arvidsson backed this up, commenting: “We will shortly update all our interface experiences – that will be a massive upgrade. On the EX90, we can upgrade the suspension, deploy new audio features, add autonomous driving features. We have an extensive roadmap of fun features ahead.”

Future proof

However, the sheer pace of change is hard to keep up with, making it hard to anticipate what lies ahead. As Arvidsson said: “It’s hard to say what a Volvo will be like in 10 years because everything is changing so quickly. I believe our cars will be a lot safer than today, and we hope to have delivered on our zero-collisions promise. We also want to deliver an excellent consumer experience. For example, I already use Google Assistant a lot to switch on lights as I near home etc. Enhancing this side of things will definitely happen.

“We are also implementing Gemini in cars, which will improve how people interact with it using voice control. It’s also important for us to get consumer input into this.”

What has become clear throughout our discussion is that software is one of the primary forces driving change in the automotive arena, and while it’s invisible, its effects are abundantly clear; it affects everything, from voice control in a Volvo SUV to whether or not to change the wing angle on an F1 car. If we can be sure of one thing, it’s this – change will only be bigger and faster as software and AI develop at an exponential rate. And companies such as Siemens will be at the vanguard of that transformation.

To hear the whole conversation, watch the recorded webinar on Autocar Business.​

Nine of the 10 best-selling used cars in the UK are still traditional hatchbacks and superminis, in stark contrast to the popularity of SUVs among buyers of new cars.

The greater sales potential and profitability of crossovers and SUVs – together with the arrival of margin-slashing safety and emissions regulations – have threatened the commercial viability of superminis and small family hatchbacks in recent years. As a result, many such models have been withdrawn from sale as their manufacturers focus instead on larger, higher-riding models.

This trend is reflected in the evolution of the top 10 new cars sales chart. In 2015, just two crossovers featured – the Vauxhall Mokka and Nissan Qashqai – and the chart was comfortably topped by the Ford Fiesta, Vauxhall Corsa and Ford Focus.

Ten years later, the Qashqai is one of eight SUVs in the UK’s top 10 list of best-selling new cars, with the Ford Puma and Kia Sportage the two most popular models of 2025 so far. The fourth-placed Vauxhall Corsa and the Volkswagen Golf, at number six, are the only non-SUVs to feature in the top 10.

However, almost the opposite is true of today’s second-hand market, where hatchbacks dominate and the Qashqai is the only SUV to feature in the top 10 best-sellers for the first half of the year.

Superminis remain the best-selling used car by body type and the Ford Fiesta was the country’s best-selling used car in the first six months of 2025.

Despite Ford withdrawing the Fiesta from sale in 2023, almost 1.4 million Fiestas were still registered in the UK at the end of last year, which means it remains the most common car on the nation’s roads.

These latest figures suggest there is still strong demand for the sort of small combustion cars that are being forced out of production for legislative and economic reasons – a view that is reinforced by their relatively strong residual values.

A three-year-old Fiesta with 30,000 miles in Titanium trim is worth around £11,500, compared with an equivalent Puma at £13,500. While the Fiesta cost £18,655 when new in 2022, giving a depreciation rate of 38%, the Puma Titanium was £24,940 when new, a 46% decline in value.

As well as naming the UK’s latest best-selling used cars, the Society of Motor Manufacturers and Traders (SMMT) revealed that second-hand car sales rose above four million units for a half-year period for the first time since the pandemic. By contrast, new car sales have yet to recover to pre-Covid levels.

SMMT CEO Mike Hawes said: “Surpassing the four million half-year milestone for the fi rst time since 2019 shows the UK’s used car market is building back momentum. To maintain this trajectory, a thriving new car market must be delivered as well.”

What about used EV sales?

Between April and June, used EV sales grew 40% year on year – the biggest powertrain rise – to 68,721. This accounted for 3.4% of the market. Tesla’s Model 3 was the best-seller.

The SMMT says further growth will hinge on uptake being driven by factors such as the Electric Car Grant, which will result in more EVs filtering through to the used market over time.

Meanwhile, sales of used hybrids and PHEVs also increased by 27.7% (to 100,127 units) and 10.3% (to 24,370) respectively.