Money and time. Whether in one’s personal life or in the automobile industry, any output has to be efficient. Some manufacturers cut corners to bring a car to market, while others have different strategies to make producing a wide range of cars affordable and timely. In business lingo, it’s about creating economies of scale. Translation, the reduction in cost when production increases.
Take Tesla Motors for example. The company as a whole is losing large amounts of cash every year as the amount of cars (and batteries) it produces is low. However, once the Gigafactory starts producing at full capacity, the cost of the batteries (and their cars) will reduce dramatically and allow for a larger profit margin.
Now let’s take a look at the different ways that different companies use to reduce costs and save time before launching a new car:
Badge engineering is a concept that has been used in the automobile industry for a long time. It is quite a common phenomenon which can be seen in models made by General Motors (Vauxhall in the UK, Holden in Australia, Chevrolet in the USA, and Opel in Europe), and Nissan, Renault and Dacia. While some think it has a negative connotation, badge engineering allows manufacturers to sell the same model (with a few changes) in the same and in different markets with a different name.
There are pros and cons to the concept. On one hand, it allows manufacturers to save on time and cost of design, manufacturing, and launching the car. On the other hand, if a car is launched by different manufacturers in the same market, it could lead to cannibalising sales as both cars will vie for the same buyers. In the Indian market, the sales of Nissan’s Micra fell significantly after the Renault Pulse was launched in 2012. Essentially the same mini-hatchback with a few body panels changed, both models were meant to attract the same consumers.
Similar to badge engineering in terms of cost effectiveness and time-saving is the modular concept. Modular is defined as ‘employing or involving a module or modules as the basis of design or construction.’ This means that across a range of products, there will be some parts that can be shared regardless of the products’ size or function.
Modular construction allows a greater level of uniqueness and range that a manufacturer can offer by sharing essential components. Most major car makers have their own modular platforms and engines that help them keep costs low and offer a versatile range of products.
At the beginning of 2012, Volkswagen announced its new modular platform strategy. The first one is for small family cars like the VW Up! and Skoda Citigo and is called NSF (New Small Family). The second, is called MQB (stands for ‘Modularer Querbaukasten’ or Modular Transverse Matrix) and is for larger front-wheel drive cars with transversely-mounted engines like the VW Golf, Audi A3, Skoda Octavia, and a few smaller crossovers/SUVs under the VW Group umbrella.
The third modular platform was pioneered by Audi and called MLB (Modularer Längsbaukasten or Modular Longitudinal Matrix) for cars like their A4, Q5, A8, and even Porsche’s Macan. The final platform is called MSB (Modular Standard architecture). It has been developed by Porsche to be used for the super-luxury cars, sports cars, and larger SUVs that are made by the VW Group.
The major source of cost saving is the fact that the same platform can have multiple applications without having to be re-engineered. The cars can be hatchbacks, saloons, or 7-seater SUVs and have a diesel engine, a petrol engine, or even hybrid engines without the need to go back to begin a new design from scratch.
The Swedish marque has made modular engines since the 1990s. Using the same basic parts (an aluminium engine block and aluminium cylinder head, forged steel connecting rods, aluminium pistons and double overhead camshafts), the original set of modular engines ranged from 1.6-litres to 2.9-litres and 4- to 6-cylinders. Volvo could offer a diverse range of engines while keeping costs low.
Downsizing engines for the sake of efficiency has been an ongoing trend in recent years. The new generation of Volvo’s Drive-E engines are also modular. They range from 1.5-litres to 2.0-litres with 3-cylinder and 4-cylinder configurations, and can run on petrol or diesel.
Following in the footsteps of Volkswagen, Volvo introduced its new Scalable Product Architecture (SPA) modular chassis system in 2014. They had been developing the platform since 2010 and were in the process of overhauling their entire line-up. The SPA platform is used as a base to build a large chunk of the car makers’ models from the compact V60 to the sizable XC90. Just last year, Volvo also debuted its Compact Modular Architecture (CMA) for its range of smaller cars including the upcoming XC40 and the next generation V40. The advantages encompass using the same electrical systems (from infotainment to hybrid systems) and a much lower cost.
When the British manufacturer launched its new XE in 2015 to compete with the BMW 3 Series and Mercedes-Benz C-Class, it debuted with a new range of modular engines that Jaguar calls Ingenium. One of the main aspects of this engine is that each cylinder is 500cc which makes scaling it (both up and down) an easier task. At first there was just the 2-litre 4-cylinder diesel engine but reports just last month have revealed that there will be a 2-litre 4-cylinder petrol engine and six-cylinder petrol and diesel engines.
Expected to launch in the latter half of 2017, it will mean the end of the current crop of supercharged V6 engines that Jaguar sells. The new straight-six Ingenium engines are also a shout out to the British automakers heritage and will be much more efficient, lighter, and smoother than the V6 motor. The petrol powered engine is expected in three states of tune (300bhp, 400bhp, and 500bhp) as is the diesel engine (275bhp, 335bhp and 400bhp). The engines will be found in Jaguar’s XEs, XFs, F-Paces and XJs as well as Range Rovers, Range Sports and the next gen-Discovery.
When Mini officially became a part of BMW, it had to circumvent its brand ethos of only building rear-wheel drive cars. In a bid to make the Mini brand more profitable, they had to introduce front-wheel drive models in their own product range. The UKL1 modular platform is used to build Mini’s cars and forms the base for the next-generation 1 Series and the 2-Series Active Tourer. In addition, BMW debuted its Cluster Architecture platform (CLAR) in 2015 which underpins the 3, 5, 6 and 7 Series, and also the X3, X4, X5, X6 and X7.
The German marque has also taken a significant step in powertrain component sharing, even among diesel and petrol units, and uses two modular architectures. One is employed on BMW’s front-wheel drive models, and the other on its rear-wheel drive cars. The company’s electric i3 and i8 are not considered a part of the modular plans as yet.
Mercedes has, in recent years, increased the number of models it produces yet reduced the number of platforms from nine in 2009 to four in 2014. The four platforms are the MFA for FWD cars and crossovers (A-Class, GLA, CLA); the MRA for RWD vehicles as well as crossovers (C-Class, E-Class, GLC, GLE); the MHA for mid-size and large crossovers and SUVs (ML); and the MSA for sports cars (AMG GT).
The S-Class sedan and coupe use some but not all components of the MRA platform. These modular platforms have petrol, diesel and hybrid engines and are also fully capable of supporting all-wheel drive systems and technology.
There is a downside to modular architecture on this scale. A single major flaw in one of the components in a modular system could theoretically cause a large section of an automaker’s line-up to fail. The recalls would be massive and the monetary consequences, dire.
So does the proliferation of modular platforms and engines mean that the cars will be similar in all aspects? Will an affordable hatchback feel like a premium saloon? In a word, no. Read any comparison between the VW Golf and an Audi A3 and the differences are quite telling. Not just in terms of how the cars look outside and inside, but how they feel to drive. Even though the engine, transmission, and platform is the same, the acceleration times, fuel efficiency, handling and ride quality is dissimilar.
Another great example is the Audi R8 V10 and the Lamborghini Huracan. Although they share more than just the carbon-fibre and aluminium chassis, all-wheel drive, and the 602bhp 5.2-litre V10 engine, the cars are quite different to drive. There has been some concern that the Lambos of old were truly wild oxen while the newer breed are tamer, though that’s a different discussion altogether.
Unlike badge engineering, modular engines and platforms allow manufacturers to reduce costs and still offer unique products. Most definitely a win-win situation.