Shift To Modular Platforms Raises New Issues For Manufacturers And Suppliers
One way in which next-generation manufacturing is impacting the automotive industry is the movement toward modular architecture. These designs use common underpinnings for various models across a variety of vehicle segments, minimizing the variation between parts needed for these models. Volkswagen says their MQB architecture will eventually underpin roughly 40 models, ranging from subcompact hatchbacks like the Up! to larger sedans like the Passat, and a range of Volkswagens, Audis, Skodas, and Seats in between. While questions about cost overruns on the program (which was already estimated to cost Volkswagen $70 billion over four years) have cropped up in recent weeks, there are no signs that this trend will slow down, with GM and PSA Peugeot planning to base an array of future vehicles on the EMP2 (for Efficient Modular Platform), and Renault-Nissan developing the CMF (Common Family Platform). Even automakers outside of the mass market, like Jaguar, are developing their own scalable platforms.
While these modular platforms promise cost savings and efficiencies of design and manufacture, they also raise questions that management and legal departments across the industry should be aware of. These issues include:
Consolidation of suppliers. As modular platforms become more prevalent, and vehicles across a manufacturer's lineup share more and more components, we are likely to see fewer suppliers entering into larger agreements with auto manufacturers. Instead of contracting with a supplier for parts for one vehicle, and another supplier for a similar part for another vehicle, manufacturers may look to one supplier to provide the identical part for both. Depending on how far this consolidation goes, suppliers should be aware of the potential for heightened antitrust scrutiny as market share for individual suppliers increases. Given the extent of antitrust issues already roiling the automotive supplier industry, this may be an issue to watch as supply chains consolidate. The increased burden on a few suppliers may also combine with the increasing demand for automobiles to exacerbate parts...
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