Perhaps the most significant news in the automotive industry this month has been the French Groupe PSA's (Peugeot Société Anonyme; hereafter known as 'PSA') acquisition of General Motors' (GM) European brand, Opel, and its British counterpart, Vauxhall. PSA currently manufactures the Peugeot, Citroën and DS brands. A joint press release states the following:
A graphic from the press release outlining the brands now under ownership of PSA. The Opel and Vauxhall logos are at the top left and right of the graphic respectively. Free2Move is PSA's newly formed mobility solutions brand, incorporating car-sharing, leasing and corporate fleet management services.
The following slides from a supplemental GM Investor Presentation provide further information on why this transaction happened:
From PSA's point of view, acquiring Opel makes sense as it enables the company to consolidate its market share in Europe. The acquisition not only removes a competitor, but multiplies both the tangible resources available at its disposal, such as factories, human resources (e.g. number of employees), R&D facilities and Intellectual Property (IP), and intangible resources such as the skills, potential ideas and potential for innovation that these new employees bring.
The benefits of the sale from General Motors' perspective are apparent from the second slide displayed above. GM's new corporate strategy revolves around two key focuses, namely 'profit potential', (i.e. how much scope the company has to make money) and 'franchise strength' (i.e. how much 'market share' the company has, or how strong the company is, relative to its competitors). In Europe, GM's Opel/Vauxhall subsidiaries were loss making enterprises that were being dominated, in terms of sales and market share, by competitors including Peugeot/Citroën and the Volkswagen Group. Consequently, it was prudent for GM to offload its European business and focus on growing profitable aspects of the GM portfolio such as the truck and SUV market in North America.
Challenges for the PSA Group
The most obvious challenge for PSA is to ensure that Opel and Vauxhall do not become a burden for the rest of the company, in a fashion akin to GM. As per the slides depicted above, PSA aims to avoid this issue by creating 'synergies' between its brands. But what exactly does this mean?
In corporate-speak, the term synergy refers to products or business plans that are complementary, or act as complementary interpretations built on the same foundation. Previously being competitors, Opel and PSA currently share a number of competing models.
One way to increase this synergy is through the practice of platform sharing. This involves a manufacturer developing a fundamental set of components, for example, a chassis, powertrain and suspension design as well as electrical components. These components are then used as a set of common standards across different body-styles. Consequently, this allows the manufacturer to minimise engineering costs and reduce product development times, such that the brand can quickly expand (if needed) and regularly update their range to cover most market segments.
Above: The smorgasbord of products offered by the combined PSA and GM brands by market segment. Platforms are colour coded.
As evident from the table above, GM and PSA have overlapping products in most segments. Also apparent is the large number of differing platforms used across the various brands. In total, GM and PSA brands use 13 different platforms to cover the automotive market.
In order to improve synergy, a key challenge for PSA will be to rationalise these platforms and minimise the use of bespoke architectures. In an ideal situation, a platform would be engineered that is versatile enough to underpin vehicles ranging from light cars to large SUVs, whilst also being cost-efficient enough to ensure that all models developed on such a platform remain profitable.
Prior to PSA's acquisition of Opel/Vauxhall, it took some steps towards this with the newly developed EMP2 platform. This has been versatile enough to underpin models ranging from the compact Peugeot 308 to the Citroën C4 Grand Picasso large people mover. Nevertheless, PSA continues to also release brand new models based upon older, cheaper to produce platforms, such as the C3 and C4 Cactus that are built upon the PF1 architecture:
Above top and bottom: The Citroën C3 and C4 Cactus
On the face of it, using an older platform saves PSA money by cutting the per-vehicle development cost. Additionally, by being a known quantity, it maximises the vehicle's reliability and minimises the likelihood that the model will suffer from a major product recall or other failure. In turn, this presumption of greater reliability comes with the tradeoff of a lower potential to improve the car. Re-using the same basic architecture for the next generation of a particular model inherently limits the advancements that engineers and designers can make in areas such as driving dynamics, performance and technology.
Amongst other benefits, widespread platform sharing offers a way to maintain the presumed reliability of using an older platform, whilst also delivering greater overall cost benefits and removing the development limitations that are part and parcel of reusing an old platform. Whilst developing a well-engineered, versatile platform incorporating the latest technologies may have a high initial cost, using this architecture across the model range delivers economies of scale. These economies of scale can reduce the overall cost of developing or revamping a vehicle range. By having an already developed fundamental architecture, per-model engineering costs can be reduced, and other savings could be realised in production costs, with the possibility of shared tooling and production lines for different body styles.
Moreover, incorporating a rigorously engineered and test platform as a starting point will minimise reliability and product failure concerns. With an older, less developed platform, reliability is generated through the experience of gradually tweaking a platform to account for issues or failures during its life-cycle. In contrast, a platform that is rigorously engineered to accomodate a range of vehicles from the outset will be more reliable by design, in having undergone a more exhaustive initial development process.
There are also significant dividends in terms of performance and technological parity amongst different models in a manufacturer's fleet. By adopting a uniform platform, the manufacturer can ensure that different vehicles share similar driving and refinement characteristics, whilst also being able to offer similar levels of technology and other features despite size and body style differences.
An example of the synergies achieved through platform sharing can be found in the Volkswagen Group's use of the MQB platform for their mainstream product lineup.
Clockwise from top left in increasing order of size: The 2018 Seat Ibiza, 2017 VW Golf, 2015 VW Passat and 2018 VW Atlas.
The models depicted above, from the light car Ibiza to the Atlas large SUV, all share the versatile MQB platform, and thus share similar in-car technologies, driving characteristics and refinement levels. Note that whilst the VW brand is often derided for its bland, derivative styling, this is due to the work of the exterior stylists and designers rather than any inherent shortcoming with the practice of platform sharing or the MQB platform in general. From a financial perspective, VW's MQB platform also appears to provide significant savings in areas such as engineering costs.
Thus, PSA is also likely to realise similar benefits if it can adopt platform-sharing across its German and French brands through the creation of a universal platform.
As part of PSA's takeover of Opel, PSA CEO Carlos Tavares said the following about brand differentiation:
Fundamentally, customers don't want a German car or a French car. They want a great car. A prospective customer doesn't purchase a Porsche because it is a German brand, they purchase it due to its performance and quality. Likewise, a Volvo isn't bought because of its Swedish origins, it is purchased because of its commitment to honest design and renowned safety features. The notion that German engineering, and thus cars from German brands, are inherently better than their peers is an illusion resulting from the German automotive industry's collective desire to focus on the premium end of the automotive market. There is little value in marketing a car as French or German without it also having the requisite performance, features and quality desired by the target market.
In this sense, it is important to distinguish the often fine line between differentiation for differentiation's sake, and differentiation that actually improves the product. Before PSA can differentiate its French brands and Opel, it must ensure that the vehicle fundamentally is great. Once this initial standard has been established, PSA can then embark on endowing its brands with different flavours as a form of differentiation that improves the brand. The presence of a particular feature, performance or quality characteristic cannot be justified solely due to the car being "French" or "German"; it must have a higher purpose in terms of actually improving the product.
Product cannibalisation is the fear that offering a new, or differentiated, product in the market will take away from sales of an existing product, instead of compounding total sales. With PSA now selling Opel models competitive with its own French brands, there is the fear that rather than the company's market share multiplying, it will stagnate as the two brands take sales away from each other.
Ultimately, this fear is groundless. Even if there is product cannibalisation, it is a near certainty that the combined ownership of Opel and existing French brands will give PSA better sales than selling Peugeot, Citroen and DS only. This in itself will be a significant improvement.
The greater risk, in fact, is that the PSA Group artificially limits the quality or performance of a particular brand in a deliberate attempt to avoid cannibalisation. Rather, product cannibalisation should be encouraged, in the sense that PSA should allow each brand to make the best product that it possibly can (whilst remaining true to its brand identity). The best products are developed through fierce, but healthy, competition, and it is beneficial to PSA for this competition to also originate internally rather than only through external, non-PSA brands.
As per the business philosophy of a famous electronics company, if the ultimate goal is to create the best product, cannibalisation is an irrelevant and insignificant concern.
Challenges for General Motors
Loss of human potential
In a financial sense, General Motors' decision to sell Opel clearly makes sense. The company's new plan to focus on strong businesses with high profitability is a step change from its past desires to dominate the automotive industry by building 'a car for every purse and purpose.' Focusing instead on profitability should ensure that GM is a sustainable, well-run business that is safeguarded from bankruptcy in the event of future GFC style economic calamities.
What is also crucial to take into account is the intangible potential lost by the transfer of employees to the PSA Group. Opel employees were responsible for key developments in the GM group, such as bringing matrix headlamps into the mainstream with its IntelliLux technology, launching the CarUnity car sharing initiative and developing platforms that were used for small cars sold under various GM brands around the world. Whilst it is impossible to predict what innovations this group might develop in the future, precedent suggests that GM may have lost a talented group of engineers, designers and other business professionals.
Future access to the European market
With Opel being a loss-maker for GM, the company evidently feels that Europe is not a market in which it can profitably participate in. Nevertheless, business environments change constantly. The transfer of local employees and expertise, along with factories, may hamper any future effort to re-enter the European market. Whilst GM will maintain a rump presence in Europe by continuing to sell Cadillac vehicles and the Chevrolet Camaro and Corvette, such limited sales operations of niche products are unlikely to be of much benefit if GM wishes to become a major participant in the European market and again exploit the region's manufacturing, designing and engineering expertise.
It is clear that whilst PSA's acquisition of GM's European operations has significant benefits, there are numerous risks for both parties as well. The key challenge for PSA will be to effectively manage its new acquisition. Crucially, the potential synergies offered through platform-sharing must be taken advantage of, whilst inter-brand competition should not be artificially restricted. From GM's perspective, whilst this move is in line with its focus on profitability, any future re-entry into the European market may be hampered by this loss of local expertise and resources.
Gerry McGovern, Land Rover design director, on the design of the Velar:
McGovern's words almost perfectly describe the essence of great design, and the Velar follows this ideal to a tee.
With a long body highlighted by a backwards positioned cab and a low glasshouse, the Velar is an ideal example of how great design starts from a vehicle's inherent proportions, and flourishes through the absence of unnecessary ornamentation and extraneous character lines. Small details such as the flush door handles perfect the look. The Velar is quite evidently Land Rover's best design yet and a strong contender for the most beautiful SUV on sale today.
Revealed at the 2017 Detroit motor show, the Stinger is Kia's all new rear-wheel-drive GT sedan.
Kia's new sedan is a challenger product. The brand has neither the pedigree nor proven ability to make a rear-wheel-drive sports sedan in the vein of the BMW 3-Series, Jaguar XE or the Alfa Romeo Giulia.
In a biological context, a 'stinger' is an organ found in insects such as bees and wasps that is used to inject venom in prey or other animals that pose a threat. In this sense, a word such as 'stinger' carries offensive connotations, which imply that the object using the stinger has the intention, or capability at least, to attack others.
This basic definition of a "stinger" is key to why the name translates well to Kia's new sedan. With this name, Kia is boldly making its intentions clear by championing, rather than hiding away, from its status as a challenger brand. The company intends to attack and displace the entrenched competitors in this space not just on its traditional bases of price and value for money, but on merit such as performance and style as well. The decision to name the new model "Stinger" imparts a sense of confidence that the manufacturer has the ability to compete directly with established competitors in this market segment.
It's evident from a glance at the side profile that the fundamental proportions of the Stinger are great. The large dash-to-axle ratio and long bonnet create a classic sporting RWD stance. The liftback style body incorporates a short rear deck that has the overall effect of accentuating the front of the vehicle, thus highlighting the RWD powertrain and placing a focus on the Stinger's long dash-to-axle ratio.
In what is becoming a BMW-esque 'Hoffmeister Kink' feature, Kia has continued to incorporate an upswept, hooked rear window line across its sedan lineup.
Above top: The hooked rear window line on the 2018 Stinger. Below: The same design feature on the 2016 Kia Optima (front-wheel-drive) sedan.
In the case of the Stinger, the hooked window develops a broad rear shoulder, adding a sense of muscle and definition to the model's haunches that imparts an impression of power and strength. Meanwhile, the unique full length chrome window line, extending past the back door to the rear window, simultaneously conveys a sense of luxury, helping the Stinger to fulfil its Grand Touring brief.
The front of the Stinger is perhaps the best example of Kia designer Peter Schreyer's 'tiger nose' front-end design. As evident from the visual comparison of the front of the car to a real tiger face above, the Stinger draws certain design cues from nature, including the broad 'nose' (front grille), and headlamps and tall side grilles that are pushed out to the extremities of the car. Overall, this develops a harmonious effect that conveys a sense of enthusiasm and subtle aggression. This is clearly a car that wants to be driven.
The rear of the car features conjoined LED taillamps. Similar to various American vehicles and the Saab 9-5, these create a unique look and complement the front-end by accentuating the width of the car.
From left to right: The 2015 Dodge Charger, 2017 Lincoln Continental (Ford's competitor to the Mercedes S-Class) and 2010 Saab 9-5 sedan. Similar to the Stinger, all three models incorporate full width tail-lamps to visually enhance the width of the car, and thus further develop the impression of luxury (in the case of the Saab and Lincoln) or sports (in the case of the Charger) that they strive to create.
A unique styling feature of the Kia Stinger is the protruded rear reflector that extends significantly into the side of the vehicle. Whilst this design presents a literal interpretation of the 'stinger' organ in an insect's body, the protrusion doesn't gel with the overall tail-lamp design, and thus appears awkward and incoherent with the tail of the car.
Above: Front and profile views of the 2018 Kia Stinger (left) and 2014 Mercedes-Benz C-Class (right) respectively. Note the similarities.
As evident from the above photographs, the Kia Stinger's cabin design clearly draws inspiration from the Mercedes-Benz C-Class, with the positioning of the tablet style infotainment display, the central trio of air-vents and HVAC controls closely resembling the Mercedes.
Taking into account the Stinger's Grand Touring focus that positions the vehicle as a combination of sports performance and luxury ideal for swift, comfortable long distance driving, the interior appears to be well suited for this purpose. The air-conditioning, media controls and the infotainment system, whilst tilted slightly towards the driver, remain viewable and easily accessible to other occupants, ensuring that other passengers also travel in equal levels of comfort. A further sense of luxury is developed by the chrome strip running below the full width of the dashboard, and alongside the power window controls, that also serves to break up the otherwise starkly dark interior.
It is always pleasing to hear of new vehicles and brands that dare to take on established competitors in a highly competitive marketplace, and more so when, from a styling perspective at least, the vehicle is as superbly executed as the Kia Stinger. The apt name is well intentioned to indicate that this car is a formidable option in this segment of the market.
In most mainstream vehicles, the design of the interior naturally follows a "T" shape. The dashboard, usually containing the driver's instrument cluster, air-vents, infotainment system, media and climate controls, stretches horizontally across the width of the car, whilst the centre console extends downwards to separate the driver and front passenger's space. In turn, a manufacturer may use this fundamental interior architecture to contrast the horizontal or vertical axis of the "tee."
This is evident in the C-Class above. In this vehicle, Mercedes has developed a 'waterfall' style centre console that uses a single curved plane to flow organically from the horizontal dashboard into a "T" shape, creating a smooth division between the driver and front passenger. This console can also be personalised in numerous trim options, to create a contrast with the horizontal axis of the interior.
Above: In addition to the wood veneer, the centre console of the C-Class is also available in piano black and carbon-fibre trims, all acting as a contrast to the interior's dashboard (horizontal axis).
In this sense, Mercedes' incorporation of a flowing centre console accentuates the vertical axis of the "T" interior design common to most passenger vehicles.
Above: The 2015 Volkswagen Passat interior.
Volkswagen's Passat takes a different approach by placing emphasis upon the width of the dashboard rather than the centre console. A uniform horizontal strip runs across the top of the dashboard. By cleverly disguising the air vents, this strip develops a Bauhaus style minimalist allusion of a single air-vent for the entire dashboard, whilst also highlighting the width, and hence spaciousness, of the vehicle.
Thus, whilst Volkswagen and Mercedes-Benz place a focus on the horizontal and vertical aspects of their interiors respectively, overall these manufacturers reinforce the inherent "T" design of an interior.
Drawing inspiration from Mercedes-Benz, vehicles such as the new Kia Stinger have a similar approach to the C-Class.
Above: The interior of the 2018 Kia Stinger.
Placement of the infotainment display
A criticism of both the Stinger and the C-Class' interior design is the placement of the infotainment screen, perched on top of the dashboard akin to an iPad being glued on top of the air-conditioning vents.
This placement of the infotainment system detracts from the brands' otherwise sharp focus on maintaining the "tee." Tacking on the infotainment screen to the top of, or in front of, the dashboard interrupts its horizontal flow, and creates a messy, cluttered design that disrupts the inherent "T" shape.
Above: A view of the centre console of the C-Class with the infotainment system above the air-vents. Whilst the flowing, 'waterfall' style centre console is elegant, the infotainment screen clutters the dashboard and disrupts the otherwise clean 'tee' architecture established by the centre console.
Above: The interior of the 2017 E-Class, a vehicle that is a step up in size from the C-Class.
The E-Class interior depicted above demonstrates how the infotainment system can be fully integrated into the dashboard without disrupting the 'tee.'
This interior presents an evolution of the design used on the C-Class. By cleanly incorporating the infotainment screen and the instrument panel into a discrete dashboard panel above the air-vents, Mercedes shifts the design focus on to the horizontal axis of the 'tee.'
On certain trims, horizontal lines embossed into the panelling further accentuate this horizontal flow. Nevertheless, the retention of a flowing lower centre console, albeit to a lesser extent than the C-Class, develops an overall cohesive and elegant interior design that is balanced between its focus on the horizontal and vertical axes, and is a significant improvement upon the interior of the smaller C-Class.
Of course, the infotainment screen can be equally as well integrated into the vertical axis of the 'tee.' It is not necessary for the infotainment display to be confined to the horizontal axis, or dashboard, of the interior in order to maintain a clean, cohesive look. Vehicles such as the McLaren 570S and Volvo S90 are a testament to this.
Above top: The interior of the McLaren 570S. Below: The Volvo S90. Whilst the McLaren is geared towards a significantly different market than the other cars described here, it remains relevant when purely considering the design of the interior.
Rather than perching the infotainment system on top of the dashboard or the centre console, both the McLaren and Volvo incorporate a portrait-orientation display in line with the vertical centre console, thus maintaining a cohesive look.
An exception to the advantages of an integrated look is where the infotainment screen is the focal point of the interior, such as in the BMW i3 and the Tesla Model 3.
Above: 2014 BMW i3. Below: 2018 Tesla Model 3 prototype interior.
In both vehicles, the primary reason why the non-integrated design of the infotainment screen is suitable is the deferential nature of the rest of the interior.
The Tesla Model 3 prototype, for example, not only lacks an instrument cluster for the driver, but its minimalist design hides any visible air vents and other physical buttons and switches. Consequently, the large infotainment screen becomes the only source of entertainment, information and control for the driver and passengers. As a result, the remainder of the interior is deferential to the infotainment screen, thus validating its tablet style placement in front of the dashboard such that it becomes the primary focus and can be optimally viewed by both the driver and passengers.
The BMW i3 follows a similar principle. The air-vents, media and ventilation controls are functional, rather than fancy, in nature, and thus defer attention towards the infotainment system. In the specific case of the i3, a half length centre console means that there is no traditional division between the driver and passenger, and hence no 'tee' to the interior design. This enables BMW to instead place emphasis upon the horizontal plane of the interior in an effort to accentuate the width of the car. The 'floating' style placement of the infotainment screen, together with its widescreen display ratio, combines with the lengthwise orientation of the wood trim to further highlight the width of the dashboard.
Fundamentally, automotive manufacturers should place the infotainment display such that it respects the intent and the inherent architecture of the interior. Where this architecture is a 'T' shape, the infotainment system as a rule of thumb should be located cleanly in either the dashboard (horizontal axis) or within the centre console (vertical axis), possibly by using a portrait orientation. In contrast, if the interior is deferential to the infotainment system, the display should generally be located at a focal point where it can be optimally viewed by all occupants of the vehicle.