4 ms·

This is usually the case. Retooling an assembly line is a ton of work, and NOT producing at scale is impossible for modern, highly automated car factories like

This is usually the case. Retooling an assembly line is a ton of work, and NOT producing at scale is impossible for modern, highly automated car factories like VW, Mercedes or BMW own. Producing 100 cars is simply not possible in these factories, because it would mean massive losses to the factory owner. Also, car manufacturers do not want one supplier for a part, they want several. Mostly as a backup and also to make sure they are not under any price fluctuations because they have more leverage over the parts supplier. Making cars is a very, very thin margin bussiness, especially with cheaper cars like the toyota aygo, fiat panda etc. Minutes of downtime in a factory could mean having to sell a ton of cars at a loss to make up the cost.

ecpottinger 9y ago
Sorry, but that does not ring true to me. I used to work on the assembly at a GM truck plant, and one of the amazing things was the range of different units that came down the line. I find it hard to believe that the major car plants can no longer make assembly lines that produce more than one design on an assembly line. Also by that logic there should be no Nissan Leaf. Last but not least, if BMW waits too long they will lose customers not only to Tesla but also Porsche and Jaguar as well.
- kazen44 9y ago
  > I find it hard to believe that the major car plants can no longer make assembly lines that produce more than one design on an assembly line. this is not the problem i described. The problem is introducing a new model into an assembly line is a lot of work, and something which is not worth the effort if you are only going to produce a small amount of cars.
  - simonbarker87 9y ago
    Absolutely not true. The Nissan Sunderland plant (which produces over 500K cars per year on two lines) produces both the Nissan Leaf and Infiniti Q30 in low volume on line two (might be line 1, not certain now). The Q30 was introduced from a slow ramp up without stopping production of the line around 18 months ago and is a low volume car.
    - mynameisvlad 9y ago
      It cost $375 million to retrofit the plant to support building the Q30: http://infinitinews.com/en-US/infiniti/usa/releases/infiniti-q30-officially-starts-production-in-sunderland-uk http://infinitinews.com/en-US/infiniti/usa/releases/infiniti... That's in line with what the parent comment said; it's not cheap at all do add a new vehicle to an existing assembly line, and it's not worth it for low volume production. Infinity also sold over 25 thousand Q(X)30s in 2017, so it's not as low volume as talked about in previous comments, either.
  - rcxdude 9y ago
    As an interesting tidbit on this point, the reason robotics is favored by car manufacturers in production plants is not because it's cheaper (it's actually more expensive), but because it's more flexible, i.e. changing a line to manufacture a new line is cheaper. This runs counter to most people's intuition of robotics.
- Gibbon1 9y ago
  BMW is in a pickle because there is a good chance their premium pricing advantage is going to up and disappear with the shift to electrics. BMW has a customer base that loves their esthetics and brando and ignores the very high cost of ownership. Shift to electric and the esthetic and brando go out the window. See Harley Davidson.
  - davewritescode 9y ago
    Ugh, Harley Davidson is a company that sells awful, antiquated products at jacked up prices. Say what you want about how much BMW charges, they make very technologically advanced cars and charge accordingly. Their major fault is they tend to use very very expensive parts and overengineer everything to a fault. This tends to make them less reliable and very expensive to repair. Case in point, the very popular and well loved BMW N54 engine used 6 piezo fuel injectors to move massive amounts of fuel. Each injector costs almost $300 at an online parts store. For comparison, a Honda Civic injector generally costs 1/5th the price. https://www.turnermotorsport.com/p-207715-13538648937-genuine-bmw-part/ https://www.turnermotorsport.com/p-207715-13538648937-genuin...
    - RoadKing 9y ago
      Only problem with BMW is any men I’ve ever seen riding one, looks like a fucking moron with tight pants and colorful sweater. Bunch of Fucking homos.
    - RoadKing 9y ago
      Never seen a women take of her clothes to ride bitch on a BMW.
    - Gibbon1 9y ago
      Both Harley's and BWM's have high cost of ownership and are on the lower end of the reliability curve. Yet owners buy them for the esthetics and Brando. Put an electric motor in each and the esthetics changes. That causes Brando issues because customers will grumble that the new models are 'not really' models.
  - 9y ago
d1zzy 9y ago
Do we have some data on how thin the margin is for entry level subcompact cars? I was always under the impression that cars are sold at the "market price", regardless of production costs which usually meant at much higher price than production costs.
- JBReefer 9y ago
  Cars have huge costs besides just production - amortized R&D, depreciation/damage to the tooling, union benefits, rework, shipping, amortized cost of future recalls per vehicle, interest on debt payments. Also, it's one of, if not the most competitive market on the planet. There's a large number of incredibly well funded entrants, with competition in every segment. It's as close to a truly efficient market as you can get, and it's getting more efficient as Chinese and Indian brands mature.
- nradov 9y ago
  Some manufacturers sell their subcompact cars for little or no profit purely to drive up their corporate average fuel economy. This allows them to make large profits selling larger, less efficient vehicles that customers actually want.
- dingaling 9y ago
  I don't have hard figures but I remember Ford UK saying that the little Fiesta cost 90% as much to build as the big Mondeo ( Fusion in the USA ) but with much less pricing potential. They are basically loss-leaders for the brand.
dahauns 9y ago
Nowadays, modularization is key. A common toolkit/template, optimized for keeping large parts of the manufacturing process the same. Take VW for example, with their Modularer Querbaukasten (arguably the most well-known example, although others like Toyota have done this for longer). Cars from the Polo up to the Passat are based on the same platform, retooling is kept as low as possible. All big players have gone modular. Everywhere, the number of different models based on the same platform has gone through the roof, with new (often relatively low-volume) variants arriving each year. (I swear, one of these days Mercedes is going to run out of letters! :) ) The biggest issue yet: Current toolkits aren't really geared towards EV - but: this is rapidly changing. As soon as the new generation of toolkits arrives, things could happen really fast.
- ilovecars2 9y ago
  VW has been moving almost all transverse front-wheel drive/all wheel drive cars to the MQB platform for a while now. This includes sub-brands such as Audi, Seat and Skoda. The benefit is that all cars based on this platform become much cheaper to design and build. The downside is that the cars end up being the same, drive the same, feel the same, etc - which I find quite boring, but that might not be an issue at all for the average motorist.
  - bgarbiak 9y ago
    Only the cheapest (and TT) Audi models are based on MQB. From A4 up it’s MLB – the luxury variant. Also, for the new cars Audi will share the tech not with the cheaper makes, but upwards: with Porsche, Bentley, Lamborghini and so on. It already happened with Q7/Q8/Urus/Betayga. It’s also not exactly true that the driving characteristics are the same across the board. Usually Seats are on the sporty side with stiff ride and precise handling, Skoda is softer, and VWs are in between. Same chassis, different setup. It’s not FWD vs RWD magnitude of difference, but it’s there. The same goes for Audi: Q7 is not the same as Urus. But yeah, the unification is bad from the car enthusiasts POV. The Ateca not only has the same chassis, but the whole body (bar the front fascia) and even the colors palette is straight from Skoda. Another worrying thing is that apparently someone in Wolfsburg noticed that Skoda sells better than VW, despite the cheap plastic interiors, and now the new VW cars (T-Roc, Tiguan) also don’t have the premium quality that had been reserved for the mother brand. Could be an aftermath of the dieselgate as well.

ecpottinger 9y ago

Sorry, but that does not ring true to me. I used to work on the assembly at a GM truck plant, and one of the amazing things was the range of different units that came down the line. I find it hard to believe that the major car plants can no longer make assembly lines that produce more than one design on an assembly line. Also by that logic there should be no Nissan Leaf. Last but not least, if BMW waits too long they will lose customers not only to Tesla but also Porsche and Jaguar as well.

kazen44 9y ago
> I find it hard to believe that the major car plants can no longer make assembly lines that produce more than one design on an assembly line. this is not the problem i described. The problem is introducing a new model into an assembly line is a lot of work, and something which is not worth the effort if you are only going to produce a small amount of cars.
- simonbarker87 9y ago
  Absolutely not true. The Nissan Sunderland plant (which produces over 500K cars per year on two lines) produces both the Nissan Leaf and Infiniti Q30 in low volume on line two (might be line 1, not certain now). The Q30 was introduced from a slow ramp up without stopping production of the line around 18 months ago and is a low volume car.
  - mynameisvlad 9y ago
    It cost $375 million to retrofit the plant to support building the Q30: http://infinitinews.com/en-US/infiniti/usa/releases/infiniti-q30-officially-starts-production-in-sunderland-uk http://infinitinews.com/en-US/infiniti/usa/releases/infiniti... That's in line with what the parent comment said; it's not cheap at all do add a new vehicle to an existing assembly line, and it's not worth it for low volume production. Infinity also sold over 25 thousand Q(X)30s in 2017, so it's not as low volume as talked about in previous comments, either.
- rcxdude 9y ago
  As an interesting tidbit on this point, the reason robotics is favored by car manufacturers in production plants is not because it's cheaper (it's actually more expensive), but because it's more flexible, i.e. changing a line to manufacture a new line is cheaper. This runs counter to most people's intuition of robotics.
Gibbon1 9y ago
BMW is in a pickle because there is a good chance their premium pricing advantage is going to up and disappear with the shift to electrics. BMW has a customer base that loves their esthetics and brando and ignores the very high cost of ownership. Shift to electric and the esthetic and brando go out the window. See Harley Davidson.
- davewritescode 9y ago
  Ugh, Harley Davidson is a company that sells awful, antiquated products at jacked up prices. Say what you want about how much BMW charges, they make very technologically advanced cars and charge accordingly. Their major fault is they tend to use very very expensive parts and overengineer everything to a fault. This tends to make them less reliable and very expensive to repair. Case in point, the very popular and well loved BMW N54 engine used 6 piezo fuel injectors to move massive amounts of fuel. Each injector costs almost $300 at an online parts store. For comparison, a Honda Civic injector generally costs 1/5th the price. https://www.turnermotorsport.com/p-207715-13538648937-genuine-bmw-part/ https://www.turnermotorsport.com/p-207715-13538648937-genuin...
  - RoadKing 9y ago
    Only problem with BMW is any men I’ve ever seen riding one, looks like a fucking moron with tight pants and colorful sweater. Bunch of Fucking homos.
  - RoadKing 9y ago
    Never seen a women take of her clothes to ride bitch on a BMW.
  - Gibbon1 9y ago
    Both Harley's and BWM's have high cost of ownership and are on the lower end of the reliability curve. Yet owners buy them for the esthetics and Brando. Put an electric motor in each and the esthetics changes. That causes Brando issues because customers will grumble that the new models are 'not really' models.
- 9y ago

d1zzy 9y ago

Do we have some data on how thin the margin is for entry level subcompact cars? I was always under the impression that cars are sold at the "market price", regardless of production costs which usually meant at much higher price than production costs.

JBReefer 9y ago
Cars have huge costs besides just production - amortized R&D, depreciation/damage to the tooling, union benefits, rework, shipping, amortized cost of future recalls per vehicle, interest on debt payments. Also, it's one of, if not the most competitive market on the planet. There's a large number of incredibly well funded entrants, with competition in every segment. It's as close to a truly efficient market as you can get, and it's getting more efficient as Chinese and Indian brands mature.
nradov 9y ago
Some manufacturers sell their subcompact cars for little or no profit purely to drive up their corporate average fuel economy. This allows them to make large profits selling larger, less efficient vehicles that customers actually want.
dingaling 9y ago
I don't have hard figures but I remember Ford UK saying that the little Fiesta cost 90% as much to build as the big Mondeo ( Fusion in the USA ) but with much less pricing potential. They are basically loss-leaders for the brand.

dahauns 9y ago

Nowadays, modularization is key. A common toolkit/template, optimized for keeping large parts of the manufacturing process the same. Take VW for example, with their Modularer Querbaukasten (arguably the most well-known example, although others like Toyota have done this for longer). Cars from the Polo up to the Passat are based on the same platform, retooling is kept as low as possible. All big players have gone modular. Everywhere, the number of different models based on the same platform has gone through the roof, with new (often relatively low-volume) variants arriving each year. (I swear, one of these days Mercedes is going to run out of letters! :) ) The biggest issue yet: Current toolkits aren't really geared towards EV - but: this is rapidly changing. As soon as the new generation of toolkits arrives, things could happen really fast.

ilovecars2 9y ago
VW has been moving almost all transverse front-wheel drive/all wheel drive cars to the MQB platform for a while now. This includes sub-brands such as Audi, Seat and Skoda. The benefit is that all cars based on this platform become much cheaper to design and build. The downside is that the cars end up being the same, drive the same, feel the same, etc - which I find quite boring, but that might not be an issue at all for the average motorist.
- bgarbiak 9y ago
  Only the cheapest (and TT) Audi models are based on MQB. From A4 up it’s MLB – the luxury variant. Also, for the new cars Audi will share the tech not with the cheaper makes, but upwards: with Porsche, Bentley, Lamborghini and so on. It already happened with Q7/Q8/Urus/Betayga. It’s also not exactly true that the driving characteristics are the same across the board. Usually Seats are on the sporty side with stiff ride and precise handling, Skoda is softer, and VWs are in between. Same chassis, different setup. It’s not FWD vs RWD magnitude of difference, but it’s there. The same goes for Audi: Q7 is not the same as Urus. But yeah, the unification is bad from the car enthusiasts POV. The Ateca not only has the same chassis, but the whole body (bar the front fascia) and even the colors palette is straight from Skoda. Another worrying thing is that apparently someone in Wolfsburg noticed that Skoda sells better than VW, despite the cheap plastic interiors, and now the new VW cars (T-Roc, Tiguan) also don’t have the premium quality that had been reserved for the mother brand. Could be an aftermath of the dieselgate as well.