Dudder: Five Thoughts

Columns From: 5/1/2005 Automotive Design & Production, , Contributing Editor

In 10 years, a high-volume production vehicle will be one that is produced in yearly batches of 70,000 to 125,000 units.

In 10 years, a high-volume production vehicle will be one that is produced in yearly batches of 70,000 to 125,000 units. This number will continue to shrink until bottoming out in the 50,000 to 100,000 unit/year range. Many vehicles will never see their yearly production rise above 10,000 units. It will be a different world.

Chasing technology in an attempt to differentiate your vehicles from those of the competition is, ultimately, a losing proposition. With supply chains that wrap around the world, and eager new competitors invading segments from all corners of the globe, the days of holding a discernable technology advantage for more than 18 months, and using that fact to bolster your image are going, if not gone. Nor is it a given that the customer will respond positively to the ever-greater levels of electronics onboard. Especially when said customer is given the complexity of iDrive when he wants the style, simplicity and ease-of-use of the iPod.

Modern society is in the grips of a form of attention deficit disorder driven by a financial infrastructure obsessed with quick returns, and a media intent on chasing trends. This has spilled over into everyday life. The desire for instant gratification, and the mistaken belief that being "plugged in" is the same thing as knowledge, are driving this change and driving our choices. Books, movies, and consumer products copy the previous success in most cases until the next hit comes around. Then everything shifts again to follow that example, or to copy what was popular in the past. There is too much time and too much money tied up in the process to get it wrong, which breeds a risk averse culture with its eyes sharply focused on the bottom line and 10-day returns. Fail in this period, and the chances are good your product will be shelved and another plugged into its place.

Think about this: A television show like Seinfeld would not stay on the air long enough to even contemplate a nine-year run. It would be shelved before its first season was over, or kept alive—if it can sustain itself in the top 20—just long enough to satisfy the minimum requirements for a move to syndication in order to generate a residual income stream. Its place is then taken by a mindless clone of an existing hit that is never as successful as the original.

We are in the midst of this in the auto industry today. Create a hit, and the clones are in your neighbor’s driveway a few months later. Platform engineering makes this easy. Competition from upstarts in low-cost countries make it inevitable. Unfortunately, when everything is built from the same set of ingredients, expecting it to taste significantly better or different is a waste of time. You can only hope for livelier flavors of vanilla.

Unlike the media, the auto industry is beset by crushing competition. A new cost structure and business model must emerge. GM’s "skateboard" concept is the ultimate expression of this plan. It separates the drive unit and dynamic functions from the passenger cell, packing a hydrogen fuel cell and drive-by-wire systems into a high-volume base. Incremental costs are minimized, and the profit comes from churning out variants that attach to this foundation. It’s the new "world car," only without the compromises that arise from selling the same car in demographically, economically, politically, and sociologically different markets—the "wrapper" is different in each. Unfortunately, it is still an answer that focuses on volume, not speed and flexibility.