With car companies taking a major pounding the past few months I’ve been pondering how it would be best to solve the problems. I think the solution is a simple one, we’re basically given to many options. Take a company such as company such as General Motors: they own Chevrolet, Opel, Cadillac, Saab and Hummer to name but a few. Now if you look at their company, despite having such a wide range of brands there is little to no sharing of research and development between these subsidiaries. This is pretty stupid from a cost perspective.
This stands in stark contrast to Volkswagen, owners of the their own brand as well as Audi, Lamborghini, Skoda, Seat and Bugatti. The VW style of business is to have a gigantic corporate “parts bin”. What you’ll find is that VW’s, Audi’s, Skoda’s and Seat’s might all share the same platform as well as engines with only the physical styling being different. This obviously allows for the development of arguably the best engines in the world while being able to cut down on costs.
Then we can take a look at a company such as BMW. Take the venerable 3-series sedan. You can get it in a 320, 320 diesel, 323, 325, 330, 330 diesel, 335 and finally M3 models. Now correct me if I’m wrong but is it necessary to have (off the top of my head) eight different models in one car? I’m not saying that BMW drivers shouldn’t have a choice between “small penis” all the way to “tiny penis” engine sizes but realistically do we need so many options?
It’s a classic “economies of scale” concept. If companies created one great car (per segment) with one great engine we’d still have a huge array of potential cars which could be cheaper and more fuel efficient due to R&D money being poured into one specific engine. Hell, you could even have a low power and a high power model to satiate those who need to over compensate. If money was pumped into developing two engines, there would be much higher levels of innovation if the mandate on these engines would be to improve power, efficiency and their green credentials. Not only would they be vastly better engines and cars, the costs would be lowered as well. Lower costs for research and development means lowered costs for the clients (or even higher profits for the car companies) and that’s something I cannot find problematic.
Most of you reading this article are thinking “but surely then we’d be stuck with millions of dodgy Toyota Corolla’s on the road?”. Well I think there are enough car makes to justify different choices and I’m not saying kill different car segments or cut down on brands, I’m just saying car makers need to be a lot smarter with how they go about running their businesses. There’s lots of room for overlaps in the various parts it takes to make a car and it’s a crying shame that so few manufacturers have adopted this. It’s downsize or die for many car companies and it’s about time intelligent uses of resources took preference over satisfying the customers ridiculous needs. The only reason the customer is ridiculous is due to the car companies pandering to their needs. It’s downsize or get out.
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