Since the dawn of the production of automobiles, automakers looked for ways to reduce manufacturing costs and the complexity of building cars at scale. Modern-day startups have learned the hard way that designing, building, and manufacturing high-quality products is not a process that is as easy as learning your A, B, and Cs with the help of a YouTube video curated by Barney. Nevertheless, as the products on assembly lines became more and more complex over the years, with more diverse engine, gearbox, and equipment options, costs spiraled out of control for even the most-experienced manufacturers, forcing them to look for solutions that would reduce the complexity and expensiveness of building cars at a massive scale.
Early examples featured platforms that only shared a common chassis, meaning that the same frame could be found across several vehicles, from different manufacturers even. Sharing platforms – or even just the frames of the cars – between companies has not been anything out of the norm, with the most trivial example being the Volkswagen Beetle, the Volkswagen Karmann Gia, and the quirky French cars built by Citroen, such as the 2CV, Dyane, Ami 6, and the Mehari, all sharing the same “platform”. The cars could not be any more different from each other, as even the Beetle and the Karmann Gia, the former known as the people’s car – much like Volkswagen itself – with the latter being a coupe sports car. Sure, the internals and the mechanic parts were the pretty much the same, but the body of the car alone warranted a different marketing strategy for a different audience.
Benefits and disadvantages of a platform
The goal of using a platform is, as we discussed, to save on costs. At the same time, there are disadvantages and risks associated with using them throughout a multiple-vehicle lineup.
Still, the number one benefit is that it does, indeed, save on costs. While the initial investment is quite steep ¬– the Modularer Querbaukasten (MQB) platform set Volkswagen back as much as $50 billion (€51.7 billion) – the annual savings are something you would write home about. Estimates by Morgan Stanley in 2014 predicted that by 2019, the MQB would save Volkswagen as much as $19 billion (€19.7 billion) annually, providing quite the hefty savings. They are not only related to the fact that fewer parts have to be produced between different vehicles belonging to the same group, such as the Volkswagen Group (VAG), but also because manufacturing processes, even at different sites, can be homogenized. As a result, it is much easier to fine-tune processes and make sure that maximum efficiency is achieved.
Secondly, it means that the same investment into the platform can blossom into a market push into different segments. The MQB platform has a plethora of different vehicles, ranging from the MK8 Golf to the Audi Q2, Volkswagen Passat, and even the Volkswagen Caddy. All of them are different vehicles catering to different segments, ranging from the middle-class enthusiasts with the Golf, to the same class daily drivers with the Q2, and the fancier Passat. The Caddy, meanwhile, is the definition of a workhorse no matter if it is the passenger or cargo version.
At the same time, the familiarity between those vehicles, including some interior parts such as the gear lever or the windshield wiper stock can downplay the luxuriousness of a car. While going from a Golf to a Passat is not such an extreme, a Lamborghini Urus is built on the same platform (MLB Evo) as the Volkswagen Touareg, even if the Italian SUV starts at a whopping $221,000 (€229,00), twice as expensive as the Touareg. As a result, the luxury brand appeal, whether it would be the Touareg/Urus or any other brand found in the upper echelons of the automotive industry, can be lost on consumers. As ridiculous as it might sound, finding a Fiat stock on a Ferrari can devalue its luxuriousness for a customer who is spending quite a bit of cash on a product from a car maker that has long touted its exclusivity.
Yet it all comes back to the fact that producing such a simple part as a windshield wiper stock would require quite the manufacturing effort, and with low volumes, could increase the costs for a part that does not produce more endorphins for those who are sitting behind the steering wheel.
Another risk associated with platforms is that in the event of a recall due to a faulty part, the company is more exposed. “As more companies move to modular designs and common product platforms and supply-chain partners, it becomes more likely that a defect on a single module or component can affect multiple vehicle platforms,” read a study by McKinsey, which pointed out that in the United States (US), recalls have been more intense and frequent. “For instance, half of all recalls today affect more than one model, and 14 percent more than one brand,” continued the article from February 2019.
Enter the MQB
Despite the risks, which each manufacturer, or any company for that matter, measures before they make a decision, vehicle platforms are too much of an advantage for mass-volume Original Equipment Manufacturers (OEM) to pass up on. Being able to invest in a single platform, rather than a wide spectrum of different vehicles, and ensure their quality, as well as catering to multiple consumer segments, is a difficult proposition to walk away from. As such, the Volkswagen MQB platform can be used as an example, especially considering the annual cost savings that the company was hoping it would achieve.
While cost savings were one of the benefits, Volkswagen Group's (VAG) ambitions were much higher. The group wanted to topple General Motors of the US and Toyota of Japan as the number one automotive manufacturer in the world. The task was not an easy one, as Toyota has been seen as an example of how to produce reliable vehicles en masse, while General Motors – before its Chapter 11 bankruptcy in 2009 – was trading the title of the largest vehicle manufacturer with the Japanese car maker. The German group was always lagging behind and struggling to reach the volumes required to take the belt at the top of the ladder, and with the MQB, it sought to do just that.
According to a small presentation from Volkswagen’s annual Media and Investors conference in 2010, the modular toolkit would fundamentally change the concept of the platform. If previously the concept of car platforms would provide horizontal synergies and provide an equal split between the body and the platform itself on a vehicle that is built at a factory, the introduction of the MQB would introduce vertical synergy as well. The difference was that the horizontal synergy would only cover two segments, such as the A and B series, standing for small family/compact cars and mid-size cars, respectively, while the introduction of modules would allow the synergy to cover every type and size of a car.
The anticipated result? A 20% reduction in unit costs and one-off expenditures and 30% fewer engineered hours per vehicle.
Preparing for the future of VAG
The OEM, anticipating such a drastic reduction in costs and manufacturing complexity, built its future around the integration of the MQB, as well as other platforms that are based on the modular approach to building its cars.
“The large number of new vehicles that we will develop for existing and future markets over the coming years demands a high degree of design efficiency. The Volkswagen Group’s brands will therefore make even greater use of modular platforms in future, making it possible to increase synergies both between models in one series and across all series,” read the group’s annual financial report from 2007. “The modular toolkit approach – the systematic extension of the cross-brand platform and modular strategy – will further reduce complexity, time, and costs.”
Ten years later, in 2022, the German automaker touted that it sold more than 32 million vehicles on the MQB platform, as the platform has seemingly continued to do wonders for the group. “When the Volkswagen plant in Wolfsburg started production of the new Golf in 2019, it was possible to still use around 80 percent of the existing installations in the body shop,” stated the company’s press release, adding that the platform has allowed integrating different parts easily, as the platform’s engine power output ranged from “48 kW (66 PS),, with the most powerful motor delivering 294 kW (400 PS).”
The sales figures were of no surprise. After all, the introduction of the MQB promised substantial cost savings, allowing Volkswagen to introduce luxury features that you would not find in the competitors of the Volkswagen Golf, for example. These ranged from Adaptive Cruise Control (ACC), Electric Parking Brake, and Traffic Sign Recognition, to comfort-related features, such as the Ergonomic Seat with Massage Function. Having said that, the introduction of the MQB in 2012 allowed Volkswagen to firmly continue rising to the top of the list of automotive manufacturers by volume, even overcoming Toyota in 2019. In the past few years, though, the Wolfsburg-based car maker fell behind the Japanese manufacturer, in part due to different strategies, as Volkswagen began to focus on electric vehicles.
Nevertheless, the MQB has also laid down the foundation for the modular electric drive matrix (MEB), which will be used to maximize the production efficiency of EVs for years to come. The Volkswagen ID.3, the Cupra Born, and the Škoda Enyaq iV are some of the first examples of the MEB being used across several brands within the group. “Like the MQB, the MEB provides a clearly defined and yet versatile matrix for the high-volume Group brands,” stated Volkswagen, as it celebrated the tenth anniversary of the MQB.
There is little doubt that after a bit more than a decade of integrating the MQB into its manufacturing sites across the globe, Volkswagen is more than happy with the results of the platform. After all, the MQB evolved into the MQB Evo, which also included improved and newly-launched engines such as the 2.0 TDI (EA288 Evo).
And the platform continued to deliver results years later, as even during the most turbulent times – that we are experiencing currently – the group managed to control its costs and the automotive division improved its H1 2022 operating result before special items by €1.2 billion ($1.1 billion) to €10.1 billion ($9.9 billion), despite a very difficult environment for automakers, marked by continuous disruption in China due to the zero-COVID policy in the country, lagging semiconductor deliveries, and the war in Ukraine. In terms of the short-term outlook, Volkswagen’s H1 2022 financial report notes that it will focus on “our vehicle fleet’s carbon footprint and on the most attractive and fastest-growing market segments.”
“In addition, we are working to leverage the advantages of our multi-brand Group even more effectively with the ongoing development of new technologies and the enhancement of our toolkits,” the report concluded the outlook for the future.
But all was not well in the very first years following the introduction of the MQB. The first model to be built around the platform, the seventh-generation Golf, and subsequently, the Audi A3 and Seat Leon allegedly had a water leak issue stemming from a bad water drainage tube from the air conditioning system. One Germany-based magazine claimed that over 300,000 cars could be affected by the fault, potentially prompting a massive recall in Europe. While not shortly after Reuters cited a Wolfsburg-based company spokesperson who outlined that only 46 vehicles were affected, it showcased a potential risk to several vehicle lineups based on the MQB.
Almost a year later, though, production snafus were present at the Wolfsburg site, where reportedly, workers had to carry metal sheets and hand them over to robots on the assembly line, per a Reuters report from 2014. Sources at the time outlined that the introduction of the platform into the manufacturing site at Wolfsburg resulted in delays and forced overtime, derived from a tense relationship between management and local unions. Ironically, increased Research and Development (R&D) costs were a point of contention, as between 2010 and 2014, they rose to up to 80%. A few months before the report came out about potential labor tensions at the site, the then-Chief Executive Officer (CEO) of Volkswagen announced that the manufacturer would look to cut up to €5 billion ($4.8 billion) of its costs to catch up to competitors.
Combining automation and the potential efficiency offered by a modular design should have propelled Volkswagen to the next level but the issues at its main site highlighted that not everything is as easy as it might seem at first. Nevertheless, once the company managed to untie all of the knots, it did produce a healthy number of vehicles in the latter half of the 2010s, before COVID-19 settled in Europe and had begun disrupting the local and continental economy.
And the longevity of the platform and modular-based design is set to stay at the manufacturer whether it would be the MEB, which will be the basis of the group’s electric vehicle lineup, the same MQB, or the Scalable Systems Platform (SSP) that the carmaker will introduce in 2026. The ultra-scalable platform will have the latest electronics and software features, as it will be one of the parts of VW’s Trinity project, which is described as the “guiding star for the brand in all future technological categories – from range, charging times, and digitalization, through to automated driving.”
Still, though, the platform has stood the test of time, as the a large number of the latest Volkswagen, Audi, Seat, Cupra, and Škoda models are all based on the latest version of the MQB. Even the newest Ford Tourneo Connect, which is part of the Ford Transit family, is based on the same platform as the MK8 Golf, as the American manufacturer essentially rebadged the Volkswagen Caddy as the Tourneo. That only showcases the flexibility and the scalability of the platform, as it has allowed VAG to take on very different market segments with what is basically the same car just with a different body.