Julian Buckley looks at what is standing in the way of true global vehicle production and whether modern manufacturers will ever achieve the same commonality as was seen in production of Ford’s famous Model T.
The idea of making a ‘global’ car has been around for almost as long as the car itself. When Henry Ford started production of the Model T in 1908 at the Piquette plant in Detroit, Michigan, it would have been impossible to imagine that 20 years later the car would be in production on five continents: North and South America, Europe, Australia and Asia. Such was the overwhelming dominance of the Model T, it is estimated that over its production lifetime it accounted for a full 50% of the global car park.
Although some production locations used a limited number of locally-produced parts, most cars were assembled from CKD (completely knocked down) kits shipped from key production hubs. As Henry Ford believed that any changes to the Model T’s construction would be interpreted by the buying public as a weakness in the original design, very little was (publicly) altered over the car’s production run. This meant that through to the end of Model T production in the late 1920s, cars built at any given location were remarkably similar to those which had rolled off the original production lines at Piquette and later, Highland Park.The rapid spread of Model T production across the globe was helped by the fact that there was virtually no competition. Over the same period, most manufacturers were still delivering bespoke hand-built vehicles which were so prohibitively expensive that they were out of reach to all but the wealthiest customers. As is widely known, Ford was able to achieve reduced production costs due to his adaptation of the assembly line build process for vehicle manufacturing. In setting up localised production of the Model T, Henry Ford was simply extending a promise first made to the American public; to deliver an affordable vehicle which any working man could aspire to own.
Essentially, it costs more to deliver a unique product. It was true in the 1920s and it is still true today.
A Rolls-Royce costs more than a Citroen because beyond the chassis and coachwork, the former offers a suite of customisation choices. Although the French firm claims never to have made two identical DS3 models, this lack of uniformity can be largely traced back to the customer-defined decals on the car’s exterior. Rolls-Royce also claims to have never built two identical cars, which beyond stickers, is directly linked to the idea that what a customer wants, a customer gets – for a price. In fact, it could be said that a Rolls-Royce customer who chooses not to have any bespoke work completed on their vehicle is still paying for the privilege of choice, as the master craftsmen who complete customer requests must still be paid, working or not.
Achieving economies of scale
As a ubiquitous part of the modern vehicle manufacturing environment the assembly line is easily overlooked, but it remains one of the most important elements of modern vehicle production, to the point that even Rolls-Royce has dedicated assembly lines at its Goodwood, UK, production centre delivering the Phantom and Ghost models.
The assembly line supported global production – and related affordability – of the Model T and more than a century later, it is still supporting global vehicle production. The difference today is that with a wide range of competitors using the same production methodology, carmakers must achieve savings in other areas in order to reduce vehicle price-to-market and this is largely achieved through economies of scale.
This can be seen in the push to deliver almost identical models at production sites which are for all intent the same wherever they are located around the globe. Of course, the numbers stack up in favour of such programmes; why invest in the development and production of region-specific models when for far less cash, the same models can be brought to market in a series of countries? Further to this, the quality of new vehicles is such that there is little to be gained by such local specificity. If a given model is considered good enough for a European customer, it is unlikely that a customer in China or Brazil would want nothing less but the same car.
Such was the case when Mercedes-Benz first looked to start local production in China. Having launched a new E-Class model, the German carmaker shipped the previous generation’s production equipment to China in order to start local production, but the car proved unsuccessful. Chinese buyers were well aware that a new model had been introduced and this was the car they wanted. Now, there is little difference between the production launch date of a model at the carmaker’s Sindelfingen plant in Stuttgart, Germany, and that of the same vehicle entering production elsewhere around the world. The next-generation C-Class is a case in point, as the identical model will enter production in 2014 in four countries located in widely separated regions around the world; Germany, China, South Africa, and the United States.
Elements standing in the way of globalisation
Not only do carmakers want to bring the same models to market across different regions, but customers want to buy the same models. Following in the footsteps of the Model T, Ford
is taking the lead in development and delivery of ‘global’ models through the ‘One Ford’ programme. The carmaker claims that the current Focus and Fiesta models are the first in a series of vehicles which will be identical no matter where they are manufactured. Having been launched in the United States as the second-generation Fusion, the next Mondeo is also destined to pick up the global moniker.
The question remains, what does global mean in terms of vehicle production? The Model T was ‘global’ due to its wide range of production locations, the similar production arrangements, and the fact that every car was virtually identical to those built in the United States. Can the same be said of the Focus or Fiesta? The fact is that the neither of these models is as global as their venerable predecessor.
As mentioned, Henry Ford was convinced that the buying public would view ‘on the fly’ changes to the Model T in a negative light. He was wrong. If there is a problem with a vehicle, if there is an improvement to be made over the existing product, customers the world over want that change to be implemented as quickly as possible. But although production systems are being designed with the flexibility needed to manage new and updated parts, it takes time for these changes to filter through the system. In an ideal world, a change made in the United States would be adopted at exactly the same time everywhere else in the world where that model was being built, but although the update process is considerably quicker than it used to be, regions lag behind others for a variety of reasons.
The primary cause of this is part supply. It takes time to retool for delivery of a given part and it takes time to deliver and test that tooling. Some places are better than others and this is usually related to how long the region has been producing cars. In the US and Europe changes are made far more quickly than in places such as China and Indonesia. These regions will catch up, particularly as the technology used by part suppliers is updated, but it does create a wave effect of incorporated improvements.
Part supply is not the only cause of differentiation between models produced in geographically distant regions. In Russia, production of some Renault models has been altered from those made in France due to the market not having sufficient supplies of ultra-high strength steels (UHSS). Where components in France have been made using UHSS, Russian production has been forced to adopt the best available product, meaning that the associated weight reductions gained through using such advanced materials were lost through the use of standard steel grades.
Another issue standing in the way of a truly global car is local preference. While the chassis of a Focus is largely the same across all production regions, elements within the suspension mounts are tuned to control body roll in European countries, while cars delivered in India are set to allow a more supple set-up. Taking India as an example, the reasons for this are two-fold; road conditions in the country are sometimes less than ideal, which favours additional suspension travel. Another factor is that the person buying the car in India is quite possibly going to be driven rather than take control of the car. This, too, favours a softer suspension.
Other cultural differences affecting vehicle production can be found in China, where car owners are also often seated in the back of the vehicle. In this case, the preference of the Chinese consumer is to have greater leg room in the rear seat, which has lead to the introduction of various extended wheelbase models from companies such as BMW and Audi. While the chassis from a Focus is the same between regions, these extended wheelbase models require adaptations to be made to various elements within the production environment. Even if it is something as minor as having to update the choreography of robots in the paint shop to accommodate the longer vehicle, any deviation from standard translates to added complexity and added cost.
Sharing the cost
Yet while these changes do require adaptations which inevitably require further investment, there are myriad benefits to be gained from getting as close as possible to the global vehicle model.
For example, General Motors refers to its automated windscreen application station as being ‘global’. This essentially means that the equipment is designed to be installed at every GM plant and, not withstanding a very limited number of models, be used in production across most vehicles. In turn, this means that while development of a single such station would have been prohibitively expensive, copying and applying the technique around the world has drastically reduced the relative investment.
Staying with GM, the company is looking to achieve similar gains as it plans to slash the current number of engine types by 50%. This means that there will be less equipment dedicated to building low-volume engines and more investment capital for production of the new engine types.
Factored across the various GM engine plants around the world and the potential savings are staggering. Should the new engine lines be produced in plants with an increased depth of automation, then there are also benefits to be gained in terms of quality, which is another win when it comes to realisation of global vehicle production.
Beyond the ‘One Ford’ strategy, the latest trend emerging in the quest to get as close as possible to global production is to share production duties across brands. One of the latest examples of this is the deal which sees Daimler and the Renault-Nissan Group teaming up to deliver engines from the Nissan engine plant in Decherd, Tennessee for production of the Mercedes-Benz C-Class and an as yet unnamed Infiniti model.
The benefit for Mercedes-Benz is clearly that the company will not have to invest in the capacity required to deliver the new four-cylinder engine which will be used in production of the next C-Class in Tuscaloosa, Alabama. For its part, Nissan will gain access to Daimler’s advanced engine technology, which is likely to increase the desirability of any model to which the new powerplant is fitted. After all, if it worked for Ssangyong, which has produced models fitted with Mercedes-Benz engines, it could certainly work for Nissan’s premium brand.
Whether Daimler and the Renault-Nissan Alliance will extend this partnership remains to be seen but interestingly, there are Nissan engine plants in every build location of the next-generation C-Class. With that in mind, is this partnership model a strategy which could support development of a ‘global’ vehicle? Possibly, but what really stands in the way of achieving the reality of a global vehicle is not part or material supplies, as these can be addressed with time and investment. What really stands in the way of this goal is the diversity of human preference and that will be much harder to overcome
Author: just-auto’s Julian Buckley