German product lifecycle management (PLM) and industrial digital transformation solutions provider CONTACT Software was selected on the 21st as a strategic technology partner for Mercedes-Benz’s next-generation, AI-powered product development initiative, PLM.AI. Mercedes-Benz plans to invest around €500 million in the digital transformation, with the goal of cutting new-vehicle development time by up to 30%.
Mercedes-Benz has selected CONTACT Software as a key technology partner for building its next-generation AI-powered product lifecycle management platform, PLM.AI. Based on its open platform, CONTACT Elements, CONTACT Software will provide the core PLM system that integrates product data and processes across the global vehicle development environment (provided by CONTACT Software)Mercedes-Benz’s €500 Million Innovation Initiative Aims to Break Down Data Barriers
PLM.AI, officially announced by Mercedes-Benz, is a next-generation PLM system that connects data and processes across the entire product lifecycle, from development and procurement to production, sales and after-sales service. Its core aim is to standardize distributed engineering data and establish a “Digital Thread” across the product development process. Mercedes-Benz expects this to improve efficiency by up to 50% in individual engineering processes.
CONTACT Elements to Power the Core Layer
For the project, CONTACT Software will provide the open PLM core layer of PLM.AI through its open digital transformation platform, CONTACT Elements. Designed with a modular, scalable architecture, the platform supports connections between different engineering systems and provides a foundation for flexibly integrating new AI technologies and applications in the future. Siemens is also participating in the project as a strategic partner, providing AI-powered automotive design and digital twin technologies, while Mercedes-Benz will oversee the overall system.
Concept diagram of Mercedes-Benz’s next-generation AI-powered product lifecycle management platform, PLM.AI. With CONTACT Software and Siemens as technology partners, PLM.AI connects the entire process—from product development and procurement to production, sales and after-sales service—in a unified data environment. Mercedes-Benz aims to use the platform to cut new-vehicle development time by up to 30% and, over the long term, reduce physical testing by up to 50% (provided by Mercedes-Benz)AI Agents to Identify Optimal Designs and Cut Physical Testing in Half
With PLM.AI, Mercedes-Benz’s development, procurement and production teams will collaborate in a consistent data environment. In particular, AI agents will analyze extensive engineering data and complex technical relationships to support faster, more accurate decision-making from the earliest stages of development. For example, when seeking to reduce the weight of vehicle components, teams can assess the effects on material costs, crash safety and production processes together. Mercedes-Benz expects this AI-powered environment to help reduce physical testing by up to 50% over the long term.
Implications for South Korea’s Manufacturing Ecosystem as Digital Transformation Support Expands
As the integration of AI and engineering data becomes essential to survival in the global automotive industry, the importance of open architectures is also coming to the fore for South Korean manufacturers and B2B SaaS startups.
Lee Sang-hoon, country manager of CONTACT Software Korea, said, “This Mercedes-Benz project to build a next-generation PLM platform is an example of how important open architecture and data connectivity are in global manufacturing.” He added, “For South Korean manufacturers, effectively connecting existing systems and data is becoming a critical challenge as they pursue AI and digital transformation.”
CONTACT Software, which established a local organization in the South Korean market in 2025 and began a full-scale expansion, plans to draw on its technology and experience built up in global markets to support promising local manufacturers and startups as they develop flexible digital engineering environments.