Find Out How Car Manufacturers Save

As in any business, getting the most out of it is paramount, and an automobile manufacturer that produces millions of cars – anything you can save on – will bring you substantial overall savings. In recent years with the crisis the situation has been taken to the extreme, so find out how car manufacturers save.

Workforce

With the arrival of the 2008 economic crisis, many manufacturers closed factories based in Europe and transferred them to Latin American countries and even China. The latter forced them to joint-ventures , that is, to associate with local manufacturers to share certain technologies.

In these countries , labor is notably cheaper than on European soil, although working conditions are not the same either. At the beginning of this practice, there was fear of a decrease in quality in our cars, but the brands have taken care of even the smallest detail, training factory operators to maintain a certain level.

In addition, depending on the country in which the factory is located, they will be able to save more than in labor. Some countries are exempt from paying duty taxes if their production is destined for certain markets, causing more and more factories to be transferred to these countries.

Absence in classrooms

Recently we have seen how more and more brands decide not to attend certain auto shows, especially the last of the year. This practice is more common in manufacturers whose ranges are not very extensive, such as Alfa Romeo and Lamborghini to name a few, but even Ford has been the protagonist on occasion.

Among the reasons that force these brands to skip international appointments are the lack of news, and the little impact on sales that their presence at said event has. It makes a lot of sense. If you only offer five models (in the case of Alfa Romeo), once all of them are present, you have nothing new to show, so it is better not to spend in vain.

Component cutouts

Of the three savings practices used by automakers, trimming their car components is the most widely used, especially by General Motors and Ford. The case of the Ford Pinto weighs on the latter, which caught fire in the event of a collision because Ford decided to dispense with a rubber cover for the deposit.

The cut in components is common since a multitude of suppliers are needed to manufacture a car, and if one of them offers X part 2 cents / unit cheaper, in the global calculation they will represent hundreds of thousands if not millions of euros. You also usually save on superfluous items, in the case of the Volkswagen Golf R.

With a price tag of more than 40,000 euros, the Golf R also dispenses with elements that one would expect as standard. For example, the driver’s seat is fully electric, but the passenger settings are manual.