12 February 2013

VW plans modular domination



The arrival this week of Audi's new generation A3 Sportback has an underpinning story that's changing how cars are built, writes Brian Byrne.

It has never been a secret that VW's Golf and Audi's A3 were twins under the skin. But now the concept is a lot more. A platform architecture called MQB which carries the latest versions of both will also allow the company to build a wider range and size of cars on just one modular 'matrix'.

It means that Polo, Golf, A3 and their equivalents in SEAT and Skoda, and a wide range of derivatives, can share core commonalities yet have widely different styles, lengths, wheelbases and heights without having to deal with major differences in assembly.

It's costing VW €52bn to implement MQB, and the company doesn't expect to complete the process until the end of the decade. But it is anticipating annual savings of €14bn across the board from just that architecture alone after 2019.

The company plans to be producing all its cars on just three such architectures in the future. The MQB will underpin all small and compact FWD cars, representing two-thirds of the VW Group's production. An MLB matrix already used in larger Audis will carry bigger Volkswagen and Porsche models, while one dubbed MSB underpins the Porsche 911 as well as Bentley and Lamborghini cars.

In addition to making it cost effective to produce many variants in core markets, the technique also allows an ability to develop models specific to other world markets without having to devise whole new platforms.

It's arguably the automotive equivalent of Apple's 'plug and play' systems in the computer industry. It has also been called the most important development in automotive construction since Henry Ford set up his first production line.

In industry terms it also outstrips smaller manufacturers, who don't have the volumes or the number of brands which Volkswagen owns to gain the same kind of cost benefits which this modular system affords the company that is dead set on being the world's largest car manufacturer.

Component manufacturers can be briefed to price on the basis of up to seven times the numbers they have been asked to quote for up to now. That inevitably results in lower component costs.

There's a potential downside. If a component used across up to dozens of car models is found to be faulty, there could be recalls for Volkswagen that would quantumly eclipse the ones which caused Toyota such difficulties in recent years. But the company is probably betting that extra profits envisaged from the new systems should easily take care of that. 

Do they cross fingers behind their backs at top management Volkswagen meetings?