smell of good business

Innovation VW Style

At #CeBIT2012 one of the more interesting presentations was delivered by Anke Kockler, Managing Director of Volkswagon Australia. The car industry is frequently seen as not particularly innovative given that the car has been in a similar format for well over 50 years, and other industries are considered more innovative – such as IT or biotech.

However there has been a great deal of innovation in safety and automated systems in the car industry, and VW have developed many of those innovations.

The presentation item of most interest in my view is the concept of the Module Transverse Toolkit. Effectively it is the chassis, motor and drivetrain for the Polo, Tiguan and Passat upon which the body is added.

What are the benefits:

  • common car system means greater reliability
  • lower costs through economies of scale
  • reduced impact on the environment
  • faster to manufacture
I’m convinced that this is the future for car manufacturers if they intend to compete, particularly against developing economies. We have not really yet seen the impact that India and China will have on car manufacture – and it is reasonable to expect that both of these developing economies will have significant demand to sate in their local markets. However their cost of labour means that there is no doubt that car manufacturers must innovate or perish.