After of a couple decades of false starts, the Detroit-based OEMs have finally read the memo that the companies based in Europe, Japan and South Korea read a long time ago: Commonized global structures are here to stay. Completely intertwined into the development, procurement and production matrix of virtually every major OEM, the shift to a global mindset for the vast majority of the portfolio is baked in.
The basis for the shift toward global structures where commonality encompasses such things as critical dimensions, development processes for key components, major suppliers, and the build processes to shingle the vehicle together has never been stronger. Scale economies and the flexibility to quickly add volume to a new geography or insert an additional bodystyle to meet consumer demand without reinventing the wheel are the drivers for this approach for most OEMs. Other benefits include development centers honing in on one or two core platforms instead of spreading resources to areas of low focus, integrating leading-edge content through better economies of scale, duplicating tooling/process on a worldwide scale, smaller organizational infrastructures, and better, better qualified suppliers.
Today’s global market has both expanded in terms of the number of potential customers in new markets and contracted through the tightening interconnection of the Internet. Until the last decade, OEMs could sell multiple generations of a nameplate to different markets because global regulations, technology integration and the speed of information were not critical to all consumers. The tide has turned and going back to prior structures would be a step in the wrong direction. Evidence of this shift is apparent. The average economies of scale in 2000 for B through D segments for all platforms higher than 50,000 units per annum was 274,000 units. By 2010, volume grew 23% at 328,000 units per annum with further 31% expansion to 430,000 anticipated by 2020.
Where does the industry head from here? Examples are apparent from the electrical architectures, manufacturing build, and back-end development processes. Reinventing an electrical backbone for every new platform would not only slow technology proliferation within an OEM’s fleet but unnecessarily add cost to an area which requires swift reaction to stay competitive. The constant churn and proliferation of various passive and active safety technologies and infotainment solutions across a fleet of existing vehicles within 1-2 years proves that these architectures span platforms to enable the speed of integration. Contributions from the manufacturing side also usher the new dynamic. Despite the current multiple unibody platform structures found at most OEMs, the manufacturing side has led the way toward common build processes acting as an enabler for multiple platform build at a single facility. Lastly, speaking in a similar design vernacular with gates and milestones common throughout the organization allows for speed and efficiency on a global scale to emerge.
These three areas combined with buy-in throughout the entire organization (executive management down to the shop floor) can pave the way to step beyond a global platform. Volkswagen has been very public in their development of the MQB, which extends from B through the upper reaches to the D-segment: it is more than a platform. It must efficiently enable various content levels, regulatory demands, customer preferences’ and even brands on a global scale. If successful (the new Audi A3 is the first effort) the MQB will blaze the path for other OEMs for the next step beyond global platforms.
MQB extends into previously uncharted waters. Commonizing build processes are only one facet of the effort—utilizing similar systems within the vehicle in safety, seating, drivetrain, and fuel/braking areas reduces cost and improves speed to market. If a safety system (air bags/sensors, belts) can be easily scaled up or down depending upon the requirements of the vehicle (B, C or D segment offering), fewer suppliers can be utilized and speed to market is enhanced. The norm is not only seeking commonality with similar-sized vehicles within a segment size (called “intra-segment commonality”) but beyond to one segment larger and one smaller. Economies of scale can expand by a scale 2 to 3 times to several million units annually with this thought process.
Thinking horizontally and vertically when planning the portfolio matrix is the new norm. The approach is not without critics and compromises, though. Consensus engineering can creep into the project (e.g., seeking too much commonality and not allowing for the optimization of the vehicle for a brand or market within a very competitive set). There have been more than a few examples in the price-conscious B-segment where an OEM has split their development efforts between entries de-contented for growth markets versus those consumers seeking a smaller size though no sacrifice in content. Optimizing for both is very difficult without compromises.
The new global standard-bearer has been established. MQB as a basis (whether one calls it an extended platform or a development structure) could reach north of 6 million units by the most conservative of calculations. Wolfsburg has certainly dropped the gauntlet for others to follow over the next decade.