Entries in Auto Industry (95)
How could you not notice the spate of recalls this year...perhaps its the year of recalls with over 50 million vehicles being recalled for one reason or another.
The auto industry went global decades ago, suppliers have a global foot print, cost saving is a global undertaking. Its a potent mix...with a gazillion variables.
You have to wonder if the customer is not completely recall jaded at this point.
The 2 cent part, the factory on the other side of the planet, the cost analysis, and some spread sheet jockey splitting hairs. It all makes for exciting times.
One way to save money is to develop common parts, and components. What the customer does not see could be generic to several manufacturers.
A generic airbag hidden in a steering wheel, or behind the dash on the passenger side can be used by several manufacturers, and made in the millions. Now make the same air bag in a low(er) cost area of the planet to save further money.
This is the new reality of some recalls, with several manufacturers, and millions of vehicles impacted.
While customers become increasingly recall jaded.
The other day it struck us. Yes we had an epiphany to the extent of cost cutting that is rampant in all areas of production, manufacturing, and retailing.
We have often made reference to Power Point pilots, and spreadsheet jockeys in the processes of saving money, and cutting costs.
In the auto industry, one supplier cuts costs, the component is subsequently sub par, and a myriad of manufacturers initiate recalls. Yes...they are all using the same component, from the same supplier.
Lets assemble vehicles "somewhere" (ideally with low labor costs), lets cooperate with a plant that builds components for a few manufacturers (to save money) while creating an optic that its all separate, and all independently trained. Agreed many of these initiatives are empowered by technology, and were a mere figments of the imagination a few years ago.
Go to any retailer, prices are either up, and/or quality is down to control costs. Lets not even talk about the service that is provided my a myriad of retailers.
The value equation is a constantly moving target. Understanding the value received for the funds that are used is increasingly challenging.
Do we have to say that the "brand value" is inexorably becoming a "ball of grey" as it constantly morphs from one cost cutting vector to another in the ongoing effort to bolster the bottom line.
Is it a surprise for the consumer to gravitate towards the lowest cost denominator since its all a complex ball of grey.
What do you think?