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Big problems of small cars: Can you still make money with small cars?

2019-10-07T02:26:36.823Z


Actually, the automotive industry would have to produce mainly small vehicles to reduce their CO2 emissions. In fact, this genus is threatened with extinction. It can only save a radical change of strategy.



Little time? At the end of the text there is a summary.

Opel takes the small car models Karl and Adam from the market, Ford stops the entry-level Ka and VW, it is said, the city car could be adjusted Up - which would also mean the end for the identical corporate models Skoda Citigo and Seat Mii. Successors are not planned according to the current state. Small cars, it seems, are slowly dying out.

But why?

VW chief Herbert Diess recently stated that cars from the so-called A segment would have no future because the necessary fuel-saving technology to meet future emission limits, too expensive.

Following the line of reasoning often cited by other manufacturers as justification for a small car series, it becomes confusing. Simplified applies accordingly: the climate protection makes small cars unprofitable. At the same time, though, especially small and light cars consume less fuel than larger, heavier models. Secondly, they better fit the prevailing usage pattern of most cars, namely as a short-range mobile with an average of 1.4 occupants. And they would be - the third advantage - in view of the globally increasing urbanization, the only acceptable vehicle type (if there must be a car there at all), to even cope with the already crowded streets and parking areas of the cities.

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Industry trend: This could save small cars

Ironically, if manufacturers justify the existence of a small car series with a reference to the stringent emission limits, this will also ease this limit. As the? Because the 95 gram limit for CO2 emissions per kilometer, which will apply from 2020, is only an average. The actual value that a manufacturer has to meet is calculated taking into account the average weight of all cars sold by this manufacturer in Europe. So if a company cuts out light cars from the offer, this measure increases the average weight of the remaining vehicles - and thus the CO2 limit for this manufacturer. The end of many small cars means a setback for climate protection.

Small car as entry into the brand world

The automakers are in a dilemma. "The contribution margins for small cars are extremely low because of the high development and production costs, and some manufacturers even earn no money with small cars," says Rolf Janssen, automotive expert and partner at the management consultancy Roland Berger. "However, as a result of the CO2 debate and urban traffic demands, the small car segment will remain important, or even gain in importance."

In addition, small cars are important for manufacturers, because these relatively cheap cars attract new customers. And from those often become regular customers, which later also larger and more expensive cars can be sold. Especially mass producers should therefore have an interest in continuing to offer small and cheap cars. Janssen, automotive consultant, explains how this can be achieved profitably: "Small cars can be produced profitably if the plants in which these cars are built are at maximum capacity." One way to ensure this is, for example, manufacturer-independent manufacturing alliances on common small car platforms - this potential is already used by some car manufacturers, but they could significantly expand it. "

Maximum standardization with different shapes

For example, the PSA Group will develop all smaller passenger cars of the Citroën, DS, Peugeot and Opel brands on a common technical basis, the so-called Common Modular Platform, or CMP for short. The first three CMP vehicles are the new DS3 Crossback, the new Peugeot 208 and the new Opel Corsa, more models will follow. The main effect of the CMP strategy: Development costs are also spread over several models of several brands - so on many cars. Correspondingly, they are less significant. In addition, the many common parts create synergy effects when purchasing. That in turn lowers production costs. In addition, the CMP allows to equip the cars with either gasoline, diesel or electric drive. They can therefore be manufactured on the same production line, regardless of the engine.

When asked at Opel, one learns, for example, that in the new Corsa "the development costs could be reduced by more than half". In turn, profitability will increase, not least because of the "significantly lower number of engine-gearbox combinations". The strategy is not new, and without this strategy, there will probably be no new small car. Where with small cars here all cars of the classes are meant to about four meters outside length, thus both A-segment, and B-segment models.

Purpose partners wanted to cost parts

So far, for example, the corporations Daimler and Renault followed this principle and had the mini models Smart Forfour and Renault Twingo manufactured together in a plant in the Slovenian Novo Mesto. As Renault announced the withdrawal from this cooperation for the near future, speculation was temporarily over the end of the Smart brand. Recently, however, Daimler announced that Smart and the Chinese manufacturer Geely will start a joint venture later this year to build e-compact cars in this new connection from 2022 onwards.

Such cooperations, which are meaningful and expedient only if the technical platforms can be brought together and thus development and production costs bundled, will probably be much more common in the future. Unless a manufacturer dares alone to achieve the necessary quantities to be able to offer small vehicles with profit. Like Toyota. Just a few weeks ago, the Japanese company presented a new small car platform with the abbreviation GA-B. The technical basis for future Toyota models should be lighter, stiffer and more variable than previous solutions. A central approach had been "to simplify the vehicle design in key areas," says Toyota.

That almost sounds like a rethink. After a renaissance of compact, simple, affordable everyday cars. And after a departure from the years of cultivated teaching of the auto industry, every average product must be brushed for premium and individuality. Here, too, the industry has overtaken itself, so to speak: If cars are increasingly shared in the future and are still being automated, it will go straight to smaller models again primarily to arrive, and less to represent.

In summary: Many car manufacturers are removing their small cars from the program. The elaborate emission control systems and fuel-saving technologies made these vehicles unprofitable, is the reason. The manufacturers actually need small, light cars to meet their climate goals. A strategy to rescue the segment could be extensive cooperation between manufacturers - that would significantly reduce costs.

Source: spiegel

All tech articles on 2019-10-07

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