Scion’s latest sedan is made by Mazda, while Mercedes’ latest EV uses Tesla technology. BMW and Toyota are also working on a new sports car together. Automakers all over the world are collaborating on new products, but why?
The concept of automakers working together isn’t new, but the reasons for doing so might not be incredibly obvious. As the automotive industry expands worldwide, the costs associated with making a car increases accordingly, so automakers have to find ways to cut costs without cutting quality or stifling innovation.
“In this day and age, the research and development of a new vehicle for a major automaker has become a global project and can cost billions of dollars,” said Tim Urquhart, Principal Analyst at IHS Automotive. “The more of that cost you can share with another automaker, the better.”
When designing a new car, automakers have a number of targets to hit that require a lot of costly research. Meeting safety and fuel-economy standards are among the most expensive parts of developing a car, and then you have to consider the different markets it is sold in, as each region may have a different set of rules.
“Look at global emission standards, for example,” Urquhart said. New cars are required to be more fuel efficient than ever before. “If you’re looking at conventional internal combustion engine technology, it’ll be difficult to achieve those higher standards, so automakers will start to look to plug-in hybrid and electric vehicle technology,” he said.
Not only is that kind of technology expensive to develop compared to the tried and true internal combustion engine, but it can also be new territory for an automaker. What’s an automaker to do in an area where it has no expertise? Pay huge amounts of money for research, get help from someone who’s already an expert, or collaborate with someone who shares similar goals?
