All sectors within the manufacturing industry face daily challenges and the vehicle manufacturing sector is no different. Shifts in consumer habits and changes in global manufacturing practices have shaped the auto industry over the years and have seen the sector evolve in many ways. Here are 3 challenges currently facing the vehicle manufacturing industry.
Product Variation & Modularisation
In Europe, the number of available car types is expected to increase by at least 20% by the year 2019. In the UK alone, 44 brands offer almost 400 different model types as buyers are attracted to a range of new car models. This is because different consumer target groups have preferences that are geared towards their own specific vehicle needs. The demand for hybrid vehicles continues to steadily increase too. This, coupled with the available multiple customisable options now present on each car type, means the possibilities are almost endless. However, vehicle manufacturers are simultaneously looking to consolidate operations to save on cost, meaning a range of different vehicle models will need to be made in the same factory and in some cases, on the very same production line. These challenges of modularisation, product complexity and cost saving requires vehicle manufacturers to find adequate solutions.
Stricter Quality Standards
Quality standards on vehicles have become tougher over the years as safety regulations and standards have become more stringent. Regulatory requirements have really tightened across all areas including safety, reliability, fuel efficiency and emissions. Meeting these stringent quality standards comes with an increased cost to vehicle manufacturers which, if it doesn’t have an impact on end price for the consumer, will mean shrinking profit margins. Vehicle manufacturers will therefore have to focus on cutting costs and waste to remain profitable.
Bans On Petrol & Diesel Cars
Many countries, including India, France, Britain and Norway have plans in place to ban the manufacture of all petrol and diesel only cars – and at least 10 other countries have set their own targets for the manufacture of electric cars. Taking Britain as an example; by 2040, sales of new diesel cars will be banned and by 2050, all cars on the road will have zero emissions. Michael Gove, U.K. environment secretary, told the BBC that “there is no alternative to embracing new technology.” The move is in a bid to improve air quality and reduce negative effects on the environment. Consumers are also increasingly leaning towards sustainability and cost efficiency when it comes to their vehicles, which means manufacturers continue to develop and innovate to create more eco-friendly yet desirable cars.
Increasing the number of different car types whilst maintaining increasingly stringent quality standards could indeed cause some challenges for the vehicle manufacturing industry, especially as the industry works towards banning the manufacture of petrol and diesel only cars. These developments could lead to manufacturers and their suppliers undergoing space redevelopment, extensions or new production line installations in order to accommodate the changes ahead.
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