Aftermarket May 2022

MAY 2022 AFTERMARKET 39 Left: In a disrupted marketplace, nascent and niche EV companies like Rivian are perceived as being more valuable than established global carmaker corporations www.aftermarketonline.net Lift and shift The solution is to move manufacturing along with engineering from established centres of excellence into countries still undergoing immense economic growth. Frequently there is a vast pool of highly qualified talent available at far lower pay rates than in ‘established’ markets, except the academic ability needs extensive guidance. So, key staff who are effectively not part of the future in North America, Europe or some parts of the Far East are sent off. The hand- over of expertise lasts as long as those individuals are present, and then decay sets in if this process is not supported when they leave. There are clear examples of the automotive sector operating in countries where running a manufacturing plant is possible, but understanding what happens in the whole process from creation to mass production is weak. BMW Group understood from the outset what strengths each new manufacturing region had, and their weaknesses too. Investments were made cautiously, so that the satellite plant skill could be developed properly. In contrast Volkswagen Group partnered with a domestic company, sold the tooling and tried to build a vehicle which had a good reputation in Europe. Lack of control over the quality of locally sourced parts mean the vehicles broke, and sometimes even before the end of the assembly line. Volkswagen Group soon understood what BMW Group already knew, altered their processes and enjoyed success. The engine Tellingly, the bit most satellite production gets to do last is the engine and transmission manufacture. Firstly, a container can take many vehicles worth of powertrains, and they represent one of the most valuable assemblies out of the whole vehicle. Secondly, not only is considerable expertise required, frequently suppliers who may not be present in the country need to set up operations. Then there is the specialist knowledge that is not fully documented because it is ‘known’. Remarkably in an age where so much engineering, tool making and production layout can be achieved with off-the-peg programmes, most technology development requires the application of pre-existing knowledge to drive the whole process forward. Here’s the danger The automotive sector has understood the internal combustion development, which runs up to five years ahead of new legislation, especially for tail pipe emissions, has been stopped. This is because the direction of travel from Europe and North America means companies are forced to go green to survive, and off-load internal combustion engines to places that still want them. Those places include China and India, for example. If the manufacturing is simply shipped out to partners with little or no support, the products may well look fine but may not work. Rather than an orderly ramp-down in Europe, North America and selected Far East markets, the result will be incomplete BEV roll out due to costs, lack of power generation and difficulties around the power distribution network Effectively this incentivizes those unable to buy a BEV to hang on to their ‘legacy’ vehicle. Taking this one step further, who is going to support this fleet of circa 33 million vehicles in the UK alone, if there is not a robust supply of quality parts? Accelerating into the unknown The message is clear. Established component and assembly suppliers in Europe have stopped internal combustion engine development right across Europe, trying to make this intermediate strategy of ‘lift and shift’ cover the inevitable shortfall. Where there is no support, component quality will nosedive. Currently we know which suppliers made parts for vehicle manufacturers, which ones may not have supplied those parts for a given vehicle but have a great depth of expertise, which ones bought parts to reverse engineer them, and those who frankly produced nicely packaged scrap. That’s about to get a whole lot more exciting. Everyone, from vehicle manufacturers to suppliers of suppliers, is trying to do a great job. However, the risk is that much knowledge has already and will continue to be lost as the age of the internal combustion engine is politically engineered, followed by destruction of much good manufacturing capability before the great future hope of transport can really deliver, at the right price for the public. Capitalism has not delivered this half-baked cake; Mainstream politics and earnest lobbyists have. Meanwhile the last man standing with the expertise to save the day is the automotive aftermarket. How on earth could this sector ever be seen as boring? www.aftermarketonline.net Last man standing with the expertise to save the day is the automotive aftermarket ”