Saving money. Everyone loves it – whether it’s a couple of pounds off your weekly shop or a couple of thousand pounds off buying your new car, it’s something that we feel is important to help us make ends meet. In the industry of manufacturing cars, this is an ideology that’s also familiar. In an age of regulation, recession and pandemic, it’s becoming more difficult for manufacturers to make a profit, and one answer to that is to cut costs.
Whilst out driving your car, you may have spotted features of cost-saving but never associated it with the process. For example, you may have noticed a piece of interior plastic is quite scratchy, or that your friend’s car has the same key fob as yours. These are both small traits of cost-cutting, but in the years to come there will be many more methods that you’ll likely see – and not see – as car companies recover from the impact of Covid-19.
There is a common misconception behind platforms. No, not those shoes that your Mum used to wear in the 1980s, or those social media sites on the internet that everybody shouts from. In the car world, platforms are a shared set of underpinnings used by differing manufacturers in the development and production process. This can include sharing major components such as the floorpan, powertrain, suspension and axels. The idea behind it is to allow manufacturers to develop more cars for less money, and it can often be the difference between making a profit or a loss.
An example would be the Volkswagen Group’s MQB platform – which features a shared modular design of a front engine, front-wheel drive layout. The platform has been a huge success, and spans all the way across VW Group’s line-up from Audi to Skoda. Size wise, the platform features in the Volkswagen Polo all the way up to the seven-seat Skoda Kodiaq SUV.
Platform sharing will become much more widespread in the years to come, and should be beneficial. If manufacturers can make more cars and more profit, then that means they can improve their cars in the future (and give us more products to choose from). Smaller companies such as Jaguar Land Rover will be making good use of shared platforms, particularly as they look to branch out to external partners as part of their electrification program.
The “parts bin” as it is often called, is a place that car makers love to dip into. It follows a similar line to platforms, except it’s used for sharing interchangeable parts – such as door mirrors, steering wheels, buttons and switches. Using the parts bin is a simple way of saving money, but it’s a method that’s easily noticed by the consumer, and can have a damaging impact on brand image if used inappropriately.
A good example would be the Skoda Octavia – which benefits from parts used by more expensive VW Golf (such as the window switches and indicator stalks). A bad example would be the Maserati Quattroporte – an £80,000 luxury saloon, which under Fiat Chrysler (now Stellantis), features interior switches and stalks from a $30,000 (£21,000) Chrysler 300. As car companies continue to merge – such as FCA (Fiat Chrysler) and PSA (Peugeot Citroen) now forming Stellantis – it is likely that the parts bin will be used more frequently in the years to come.
It’s a well-known mindset that a good quality product is worth paying a premium for, as the idea of longevity can often be reassuring. In the car industry this is no different, but thankfully quality control in modern cars is as high as it’s ever been: panel gaps are minuscule, plastics are softer than ever to the touch, and doors continue to close with an ever reassuring “thud”. That said, when paying a premium for a high quality product – you expect high quality.
After a total loss of €40 billion after Dieselgate, Volkswagen had no option but to embark on a cost-saving exercise, with a big recipient of that being their interior quality. Expensive plastics that were once soft and squidgy are now hard and scratchy, particularly in the new Golf and ID.3. Whether these cost-cutting measures will have an impact on brand image is still yet to be seen, but it’s likely other manufacturers will be making similar savings on their road to recovery from Covid-19.
On the face of it, you might perceive cost-cutting as a bad thing – but you shouldn’t. If savings are made appropriately and in the right places, cutbacks can fuel survival when the going gets tough. It’s highly likely that you’ll see a form of economising in your car in the years to come. But at the end of the day, if a company can be profitable, then the result of an improved product line can only be good. Not just for their finance director, but also for us – the consumer.