'Go big or sink fast' has been the mantra of car makers in the last couple of decades.
If your manufacturing operations don’t utilise economies of scale, to use the business-jargon version, then you will never make money in a world in where profit margins are slim and disruptive shocks are becoming the norm, especially in the mass-market end of the car choice.
“Autos is a high fixed-cost/scale business,” wrote anaylst Adam Jones of Morgan Stanley bank in January. “Returns are maximised when you can achieve very high volume per [unit].” His point was that profits can only flow on annual volumes over 100,000.
However, newer car makers and automotive disruptors are challenging the prevailing wisdom to find new ways to bring vehicles to market, especially ones that fulfil a more niche customer need or desire without sending the price spiralling to the point where you’re paying Aston Martin money.
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A key aim is finding an alternative to the stamping press, a vast and vastly expensive machine that uses immense force to stamp out panels and other car parts from steel.
Not only is the press expensive, but so too are the dies – the pattens that create the shape of the parts.
“I’ve seen pressed steel dies at $3-4m each,” said Jean-Philippe Launberg, former technical director of General Motors in Brazil and now strategy and business director of Gordon Murray Design (GMD). “And you don’t just need one for a piece; you need four, five or even six steps.”
The solution preferred by GMD and others, including hydrogen fuel-cell vehicle hopeful Riversimple, London taxi maker LEVC, commercial EV start-up Arrival and others, are panels pressed from composites, rather than steel.
Plastic panels are still pressed but at a much lower pressure, between 100 and 400 tonnes, compared with 3000-5000 tonnes for steel, Launberg said, and it’s done in a single step rather than multiple steps.
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Whenever I see articles and pictures about car manufacturing: the size of the factories and pressing plants, the number of robots welding the car bodies together, the IT required to coordinate all the processes, the massive paint plants, etc. etc., and the capital investment required for all these, I've always been left with the notion that surely, there must be a simpler and cheaper way of making cars? Gordon Murray has been promoting his iStream methodology for years now and I've never understood why it has taken so long for others to take up this idea. Perhaps a case of "not invented here" but perhaps also its time has at last come.