Auto companies to standardise parts to cut costs

The system is intended to develop various models – in particular vehicles aimed at emerging countries – faster and more inexpensively. Nissan Motor Co and Germany’s Volkswagen AG are also taking similar steps.
However, such systems can negatively affect auto-parts makers and other related companies.
Under the Toyota New Global Architecture announced  this week, the auto-maker intends to standardise half of its 4,000-5,000 major vehicle parts in the next few years. Parts to be standardised include engines and transmissions.
“This will be a way to make better cars,” Toyota president Akio Toyoda told a news conference at the company’s headquarters in Toyota, Aichi prefecture.
Executive vice president Takeshi Uchiyamada said the new framework was aimed at “achieving cost cuts and product improvement at the same time”.
The auto-maker will aim to reduce engineering costs by at least 30 per cent by standardising vehicle platforms and conducting research and development of multiple models simultaneously.
Meanwhile, Nissan plans to introduce a system in 2013 in which vehicles will be developed in four modules and designed by combining these modules in different ways. Under this system, 80 per cent of Nissan’s vehicle parts will be standardised, up from the current 40 per cent, the company said.
The Volkswagen Group is scheduled to release a compact car developed under such an engineering system this year.
Toyota said standardising half of its major auto parts would enable them to be used in different models regardless of vehicle size. Auto parts and components are usually developed according to the size of vehicles.
The introduction of such new engineering systems is therefore considered a major turning point for the auto industry.
Also behind the moves are stricter environmental regulations around the world.
“Costs to improve fuel performance and safety measures are expected to more than double in 2015 from 2010. So we’ve been forced to cut development costs,” a Nissan official said.
However, if such systems are introduced widely, auto-makers may no longer procure auto parts from small and medium-sized enterprises.
Herbert Hemming, president of German auto-parts maker Bosch Corp’s Japanese unit, expressed concern over the possible trend, saying some parts makers could be forced out of the competition if the race to cut costs intensifies.