Customers are bombarded with new technologies in today's vehicles.
How will new technologies impact vehicle performance and trips to repair facilities over the next three years?! Customers are bombarded with new technologies in today's vehicles. This brings new opportunities to improve safety, however there is a learning curve for both manufacturers and consumers who need to understand how they operate.
After tremendous quality improvement and the declining need to return to the dealer for repairs, the landscape is changing.
In this webinar, Renee Stephens from We Predict will take a look at the projected changes in the industry using Deepview, We Predict's one-of-a-kind, cross-industry study of predictive automotive repair frequency. Manufacturing Productivity Although the American automobile industry has made some progress in introducing flexible manufacturing, it has failed to match Japanese levels of manufacturing and organizational efficiency. Improved factory operating efficiency and vehicle design have yielded higher quality and productivity, but that only partly closed the competitive gap. A recent study (Womack et al., 1990) comparing the performance of auto assembly plants throughout the world found that U.S. plants operated by the U.S. automakers had an average productivity of 24.9 hours per vehicle. In comparison, Japanese plants in Japan had an average productivity of 16.8 hours per vehicle. Cars assembled at the U.S. plants had 7.8 assembly defects per car in comparison with 5.2 defects per car in the Japanese plants. The gulf between American and Japanese manufacturers is narrowing but remains a troubling national problem.
Capacity for Investment Access to cheap capital through the issuance of warrants and convertible bonds worth billions of yen during the late 1980s supported Japanese investment in new plants and products.17 While the Japanese automobile companies must replace this low-cost debt with more expensive capital, they continue to benefit from the investments made during the late 1980s.
Although the domestic automakers also invested heavily during the 1980s, much of the surplus cash was used for acquisitions outside the North American automotive market. In addition, cash was also used to repurchase shares in attempts to boost stock prices, on products and facilities for overseas subsidiaries, or on domestic facilities deemed necessary for the future of the business, such as the billion-dollar Chrysler Technology Center. Despite record spending on domestic automotive operations, the industry must still invest to match Japanese production standards and to respond to the shift upmarket (i.e., the movement to larger, more expensive cars) of Japanese manufacturers. The prospect of lower vehicle demand, further losses in market share, and significantly higher fixed costs raises questions as to the domestic industry's capacity to fund investments to close the competitive gap with the Japanese and to meet the safety and emissions standards that have been enacted. Investments in fuel economy technologies that force the early retirement of models or components, or that must be accomplished outside the planned spending cycles, could place an untenable financial burden on domestic automakers.