A Lesson From The Automotive Industry

From steam-powered to gasoline engine in the 1860s and 1870s; to diesel engine in the 1930s; and now, to the modern electric motor vehicles, the Automotive Industry has been very triumphantly evolved and embraced new technologies in last two centuries. Like Ford Motor (F), founded in 1903, didn't run down by the new form of energy revolution but well adopted the market changes, under the microscopic surveillance of its private and public investors, to survive for more than a century. It's incredible and fascinating. Of course, there's another outstanding example, General Motors Corporation (GM), operates since 1908. Even facing the global crisis like the Great Depression and Two World Wars, companies like Ford (F), General Motor (GM), Mercedes-Benz (DAI), and Bayerische Motoren Werke (BMW) didn't get crushed but the difficult times only made them stronger and better. What strengths got them survived for long are their clear business initiatives, excellent management in resource allocation, ability in production scaling, talents retention, political supports, and many more; Furthermore, they also have one important trait - ADAPTABILITY.

Rather than bringing you a long article about my introspective of 6W2H analysis about Automotive Industry and what can be learnt from them, I simply wanted to pick your brain by pointing out a few examples of collaboration between inter competition.

  • BMW introduced the idea of sharing platform, Untere Klasse (UKL) , and first adopted to produce 2014 Mini Hatch and powertrain components.

  • Rolls-Royce – Bentley L Series V8 engine has been used in both branded vehicles for four decades since 1959.

  • BMW and Toyota will share the identical powertrain platform (not engine) and interior design for their upcoming Z5 and Supra.

  • Mercedes Benz provides AMG V8 engine to various Aston Martin models and its brand new X-Class is built upon the Nissan Navara chassis frame and suspension layout.

  • Besides the BMW and Mercedes Benz, Tesla also shared electric motor and platform designs for its vehicles: Model S and X; The upcoming Model Y will be built upon Model 3 in 2019 for the ease of production and cost efficiency.

  • Tesla and Panasonic entered into agreement for battery production and joined investment into the Gigafactory plants.

  • Alfa Romeo Giulia Quadrifoglio adopted a six-cylinder sister to the Ferrari-designed F154 turbocharged V-8 that powers the Ferrari 488GTB, ­California T, and Maserati Quattroporte GTS.

  • Ford and Mazda shared numerous parts as well, as they had a manufacturing cooperation agreement for about 20 years or so.

  • Today, Toyota and Mazda announced their joint venture in developing electric vehicles and building a $1.6B plant in U.S.

Conclusion:

Competition is always bloody and brutal. No matter which industry you are in, that will never stop. The auto industry supply chain is massive; There are an estimated 25,000 different companies that supply parts to the car manufacturers. It's not a surprise at all there is many commonality in parts among different vehicles built by different manufactures in different countries. Each automotive brand diligently balances their constrained resources to distinguish in exterior designs, quality of services, and financing programs to capture consumers' heart, but manufacturers themselves also understand the hardship of self-survival. Even born from dissimilar roots and cultures, they learn to cooperate and collaborate together from inside and outside their existing ecosystem for the best interest of their stack-holders, and importantly, the future of their industry, which is essentially relying on the key "Resources Sharing".

Ref: The Wagon Wheel Restaurant's Role in Sharing Silicon Valley Technology

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