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Written by Kami Buchholz
More vehicle launches and faster product cycles are re-shaping the global vehicle landscape, and many suppliers are struggling to keep pace, according to IHS Automotive analysts.
From 2016 through 2018, OEMs will production launch a combined 434 vehicles into global markets. That"s nearly 100 more launches than the previous three years" total, and the dramatically increased activity puts pressure on engineers, tooling, logistics, and the infrastructure. This frenzied pace also occurs amid a shift to shorter product cycles.
"The days of seven- and eight-year vehicle cycles are completely gone. Now it"s a five-year cadence," Michael Robinet, Managing Director of IHS Automotive, said during the global research and analysis firm"s 2015 fall media briefing at its Southfield, MI offices.
Competitive issues, legislation requirements, and consumer demand are driving the five-year cycle for just about every all-new passenger vehicle, while moderate refresh/mid-cycle enhancements are now occurring every two to three years.
The cycle time is even faster for other modifications that commonly involve exterior lighting, front and rear fascia trim as well as the vehicle cabin"s electronic content. "We"re integrating all this new content on-the-fly. Most of the software on vehicles is being re-written virtually every year," said Robinet, "This changes the dynamic of how we launch vehicles and how we test them."
Industry players are also dealing with a significantly shortened powertrain cycle, going from a typical 10-year span to a single-digit cycle, according to Robinet.
Driving that shorter product cycle are government regulations. In many cases, new engines are needed to phase-out older powerplants that are unable to accommodate fuel-saving technologies, such as variable valve timing, displacement on demand, or a stop/start system. But working under increasingly accelerated product cycle cadence is proving difficult for the supply base.
"A lot of Tier 2 and Tier 3 suppliers are having tremendous issues keeping up," said Robinet, "The problem with that is as this cadence gets faster, it also gets more global. And as it gets more global, these Tier 2, Tier 3, and even some Tier 1 suppliers are finding the speed of cadence very challenging."
Global economies frequently fluctuate and usually at a faster pace than product cycles. Today, Brazil and Russia are in severe recessions, and China is experiencing a softening in its light-duty vehicle sales, including three months of negative growth.
According to Charles Chesbrough, IHS Automotive"s Senior Principal Economist, "FCA has been hurt tremendously from the downturn in Brazil because they"re heavily focused on that market. The European manufacturers are much more impacted by the downturn in Russia. And VW and GM could be impacted more than other automakers by the slight downturn in China."
Europe, North America, Japan, and Korea are on a sales rebound.
"The source of sales in the world has changed dramatically since the 2009 global recession when the emerging markets were the industry"s saving grace," Chesbrough noted. "But in recent years we"ve seen the flip-flop, and most of the mature markets have started to make their comeback and are now poised for very modest but positive growth." He said combined vehicle sales in North America, Australia, New Zealand, Western Europe, Japan and Korea for 2015 will top 42.9 million units with 43.5 million units projected by 2020.
Input from multiple global markets is important to the product development process, but the expertise vested with mature market talent is crucial to accomplishing technology innovations. "Because we"re moving toward globalized platforms, you really need the knowledge base that a mature market has in terms of the engineering, and that"s important with the move toward shorter product cycle times," said Chesbrough.
Date: 21-Oct-2015 11:42 EDT
More of this article on the SAE International website
ID: 1397
More vehicle launches and faster product cycles are re-shaping the global vehicle landscape, and many suppliers are struggling to keep pace, according to IHS Automotive analysts.
From 2016 through 2018, OEMs will production launch a combined 434 vehicles into global markets. That"s nearly 100 more launches than the previous three years" total, and the dramatically increased activity puts pressure on engineers, tooling, logistics, and the infrastructure. This frenzied pace also occurs amid a shift to shorter product cycles.
"The days of seven- and eight-year vehicle cycles are completely gone. Now it"s a five-year cadence," Michael Robinet, Managing Director of IHS Automotive, said during the global research and analysis firm"s 2015 fall media briefing at its Southfield, MI offices.
Competitive issues, legislation requirements, and consumer demand are driving the five-year cycle for just about every all-new passenger vehicle, while moderate refresh/mid-cycle enhancements are now occurring every two to three years.
The cycle time is even faster for other modifications that commonly involve exterior lighting, front and rear fascia trim as well as the vehicle cabin"s electronic content. "We"re integrating all this new content on-the-fly. Most of the software on vehicles is being re-written virtually every year," said Robinet, "This changes the dynamic of how we launch vehicles and how we test them."
Industry players are also dealing with a significantly shortened powertrain cycle, going from a typical 10-year span to a single-digit cycle, according to Robinet.
Driving that shorter product cycle are government regulations. In many cases, new engines are needed to phase-out older powerplants that are unable to accommodate fuel-saving technologies, such as variable valve timing, displacement on demand, or a stop/start system. But working under increasingly accelerated product cycle cadence is proving difficult for the supply base.
"A lot of Tier 2 and Tier 3 suppliers are having tremendous issues keeping up," said Robinet, "The problem with that is as this cadence gets faster, it also gets more global. And as it gets more global, these Tier 2, Tier 3, and even some Tier 1 suppliers are finding the speed of cadence very challenging."
Global economies frequently fluctuate and usually at a faster pace than product cycles. Today, Brazil and Russia are in severe recessions, and China is experiencing a softening in its light-duty vehicle sales, including three months of negative growth.
According to Charles Chesbrough, IHS Automotive"s Senior Principal Economist, "FCA has been hurt tremendously from the downturn in Brazil because they"re heavily focused on that market. The European manufacturers are much more impacted by the downturn in Russia. And VW and GM could be impacted more than other automakers by the slight downturn in China."
Europe, North America, Japan, and Korea are on a sales rebound.
"The source of sales in the world has changed dramatically since the 2009 global recession when the emerging markets were the industry"s saving grace," Chesbrough noted. "But in recent years we"ve seen the flip-flop, and most of the mature markets have started to make their comeback and are now poised for very modest but positive growth." He said combined vehicle sales in North America, Australia, New Zealand, Western Europe, Japan and Korea for 2015 will top 42.9 million units with 43.5 million units projected by 2020.
Input from multiple global markets is important to the product development process, but the expertise vested with mature market talent is crucial to accomplishing technology innovations. "Because we"re moving toward globalized platforms, you really need the knowledge base that a mature market has in terms of the engineering, and that"s important with the move toward shorter product cycle times," said Chesbrough.
Date: 21-Oct-2015 11:42 EDT
More of this article on the SAE International website
ID: 1397
