Renault announce the CMF
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Thread: Renault announce the CMF

  1. #1
    1000+ Posts gerry freed's Avatar
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    Default Renault announce the CMF

    The "Alliance", that is the joint Renault/Nissan operation has just announced a new tool box, the CMF or Common Module family.

    It is the future series of engines transmissions and drive trains, which are the parts the customer doesn't see, which wil be shared and mixed amongst a wide range of products to gain economies of scale.

    They have not had much progress in sharing technology with Mercedes and so have decided to bring out a range of assemblies under the Alliance umbrella which will determine their products over the next decade at least.
    The CMF is not a platform but a common operational and management strategy. They want to cut 30% of the costs of product engineering and 20% of the component costs of the vehicles.
    VW have been doing this for some years and have achieved much better profit per car than PSA and Renault as they have integrated common components in cars branded VW, Audi, Skoda, Seat etc.

    The Alliance intends to have the CMF implemented in 12 countries of manufacture by 2020. They are starting with the small and medium cars. The first models to be built within the CMF will be the replacements for the current X-Trail, Qashqai, Rogue, Espace, Scenic and laguna.

    The CMF is going to cover nearly everything except the body styling and marque specifics. Once applied to the Clio,Micra, Modus,Note, Juke Cube family they are looking to get another 20% of costs off beyond the existing common B platform usage.

    This is, IMHO, a necessary managment rethink to get the economies of scale necessary to stay in the game alongside VW and GM.

    PSA is following a similar strategy but they do not have the marketing scope of the Alliance.

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    One can speculate on the future of the Mercedes relationship which is helping Mercedes with the Smart and its A and B series but has shown little signs of helping Renault in the luxury sector.
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    1000+ Posts robmac's Avatar
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    How revolutionary!................... not.

    John button had similar ideas some 30 years ago! Perhaps not as developed as the CMF, but the button plan was intended to work cross marque.

    Button car plan - Wikipedia, the free encyclopedia

    The button plan tried to introduce a common component source for all Australian cars as well, but that never happened due to the money making nature of "custom" spare parts.

  3. #3
    1000+ Posts gerry freed's Avatar
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    What is exceptional about this and is far removed from the Button era, is that it is a part of the global consolidation of the industry and it addresses the management difficulties of merging cultures. John Button's idea was, alas, urinating in the Mistrale because it was based on the mistaken belief that the local assemblers had common interests because of their location. The reality was that Holden was part of GM, Ford Australia part of Ford etc and their internal loyalties lay elsewhere.

    Today we have even greater pressures for economy of scale and Renault is trying to get to survival volumes by partnerships with other companies with equally strong and individual cultures. I think it is one of the marvels of late 20th century management skills that Ghosn was accepted by the Japanese and that slowly he and his colleagues have been able to create a common culture.

    This is not about common parts but about common concepts in which the differentiated value of the group is shared to help its overall competitive position. John Button's idea added nothing to the competitive relationship of the hoped for participants. It now stands as a text book example of how limited government interference in industrial globalisation has become.
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    1000+ Posts Kim Luck's Avatar
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    As long as they all handle well and go like buggery we'll all be pleased. Another $10K for the Gordini stripes and we'll all be laughing!
    Don't it always seem to go that you don't know what you've got 'til it's gone............

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    1000+ Posts robmac's Avatar
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    The focus of the button plan was to build cheaper cars for the consumer. The reason it failed is because the manufacturers put their profits first and dug in their heels.

    The CMF plan will benefit nobody but the car manufacturers. Economies of scale for them at maximum price to the consumer that market will bear. Survival is euphemism for keeping the bean counters happy.

    The loyalties are to the manufacturers bottom line. The Japanese are masters at that. Compare any JDM vehicle to the local market equivalent and it's obvious that the vehicles are "built down" to the market in which they are sold.

    I can't be as upbeat about the plan as you.

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    1000+ Posts gerry freed's Avatar
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    Unless manufacturers build the cars customers want and hence pay for, they have nothing to offer shareholders. The auto industry swallows huge amounts of capital. To raise it, it has offer returns to you and I in our super funds that are comparable to other industries, otherwise our managers go elsewhere to look after our money.
    Given that profit has to made and the manufacturer wants to survive, it has to supply a product that is competitive in performance and price with its competitors. Companies that lack the economies of scale have to chose between higher sales prices and hence less sales and a slide to oblivion or less return to shareholders. If they choose the latter their cost of capital is excessive and they still vanish.
    It is a tough world out there and these cost cutting strategies of VW, PSA and the Alliance are all part of the day to day battle to survive.

    It is not a question of being upbeat, I summarised a press release from the Alliance which is hardly going to be downbeat. Had they not have done something like this, I would have written them off as not being around by 2020.
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    1000+ Posts schlitzaugen's Avatar
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    Hmm. You seem to think the customer has a choice and that may be true in some markets but I don't think the australian market is one of them. Here you just have to buy what the powers that be want you to. Don't know how that affects bottom line but I don't suppose it does.
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    Of course they want to build the cheapest car and sell it for the maximum price, that is what capitalism means. The Australian industry failed because it was focused on extracting the maximum subsidy from the government, rather than building cars consumers want. The germans know exactly what consumers want - to feel superior to their neighbours.
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    1000+ Posts Kim Luck's Avatar
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    I think you are all being a little smugly unfair to Australian car manufacturers. The cars they made help make this country what it is today. The products, the engineering knowledge, the manufacturing knowledge, the multi thousands of people who have been employed by them and whose wages stoked our economy for years not to mention the hundreds and hundreds of small businesses and their employees, all these made a much greater impact on Australia than a few bloody mines who employ bugger all people (225,000 in 2011 from a total of 11 million) and of whose profits 83% go offshore.
    Don't it always seem to go that you don't know what you've got 'til it's gone............

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    Unfair is the right word, it is an unfair world. I'm sure there are many talented and committed people who have worked in the Australian car industry over the years. Unfortunately all the car companies don't give a damn, they just want to sell the cheapest cars at the maximum price. Subsidies will just go straight back to detroit, won't help the industry at all. A small country like ours has no chance, we will never make it in the auto industry. Let the French waste all their money chasing a dream of international relevance.
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    Thanks again Gerry. If they don't get this right, with strong commonality they won't exist - as you say. Young Mr Ghosn has done a remarkable job I reckon.

    It's difficult for Oz unless you/we have at least a couple of international manufacturers prepared to do part of their global thing here. Ford failed completely in this area AFAIK, whereas GMH has exported all sorts of things over the years. Want to try being a small specialist producer? Hmm. A car model needs to be exceptional and have global recognition and demand, if the numbers are small like the Oz market can support, or in-house links to an internal export market. For the opposite, witness SAAB, and I'm not sure Volvo makes money either.

    Tough game. The rules aren't remotely the same as when my CX was made (and didn't Citroen go broke again about then....). Nor are they the same as when we had far more assembly plants in Oz and a bigger demand for components I guess (Lucas starter motors on Datsuns etc).

    Quote Originally Posted by gerry freed View Post
    Unless manufacturers build the cars customers want and hence pay for, they have nothing to offer shareholders. The auto industry swallows huge amounts of capital. To raise it, it has offer returns to you and I in our super funds that are comparable to other industries, otherwise our managers go elsewhere to look after our money.
    Given that profit has to made and the manufacturer wants to survive, it has to supply a product that is competitive in performance and price with its competitors. Companies that lack the economies of scale have to chose between higher sales prices and hence less sales and a slide to oblivion or less return to shareholders. If they choose the latter their cost of capital is excessive and they still vanish.
    It is a tough world out there and these cost cutting strategies of VW, PSA and the Alliance are all part of the day to day battle to survive.

    It is not a question of being upbeat, I summarised a press release from the Alliance which is hardly going to be downbeat. Had they not have done something like this, I would have written them off as not being around by 2020.
    JohnW

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    Too many posts! JohnW's Avatar
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    Quote Originally Posted by Kim Luck View Post
    I think you are all being a little smugly unfair to Australian car manufacturers. The cars they made help make this country what it is today. The products, the engineering knowledge, the manufacturing knowledge, the multi thousands of people who have been employed by them and whose wages stoked our economy for years not to mention the hundreds and hundreds of small businesses and their employees, all these made a much greater impact on Australia than a few bloody mines who employ bugger all people (225,000 in 2011 from a total of 11 million) and of whose profits 83% go offshore.
    Fair comments I reckon, and I work a fair bit for the mining industry. Not a large proportion of the work force. And there's the dilemma. Without getting into the politics of it, we have to be very clever to complete making things on a small scale in a very large scale world market. People forget that Donald Horne's "The Lucky Country?" had a question mark in the title. Whenever someone quotes him, you can almost always tell they haven't read it.

    I reckon Ford just screwed up in Australia with respect to the company not having the global integration for this operation in Oz to have outlets within Ford internationally. Not bad vehicles for what they are. Just fewer buyers as time goes on. Prius taxis have more boot space than Falcons for goodness sake.
    JohnW

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  13. #13
    1000+ Posts gerry freed's Avatar
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    The economcs of car manufacure and that of its core components like tyres, steel, electronics and engines is such that effective competitors have to work on a scale much larger than any one country, even China or the US. As a result trying to link anything of national scope to their strategy is a fruitless exercise.

    This was not yet true in Button's day and it was a last chance when world cars were emerging to build some component suppliers with global scale who could survive the eventual demise of the local car assemblers. It has had some successes, the production of GM engines for world cars, specialised brakes and wheels and no doubt others.
    Some may recall the era. There was even then no commercial imperative for the 4 car assemblers to keep plants in Australia. Their presence was maintained by a market distortion based on tariffs and other protection such as the ADRs, that had a high nuisance cost to small volume importers. The WTO was gathering momentum and Canberra saw that to preserve Australia's real wealth creation through primary industry, it would have to face reciprocal dismantling of barriers. Button and his colleagues sought to meet this threat to manufacturing in a relatively high cost country by encouraging the formation of world class competitive component makers, with an initial base volume coming from the local assemblers.
    Somewhere in the archives may be copies of the video series "Last chance for the Lucky Country" made by ABC fims and shown in the schools. In one episode I recall debating the issues with John Button.
    It was a good try and is now fading from sight as similar protective and encouragment schemes are winding down in other countries. The industry is now so scale driven that it is playing off communities on the basis of their social costs.
    We have here in France the scene in which car assembly plants were good employment opportunities for migrants, especially from the francophone north african ex-colonies. The French in good times had built up very high social costs relative to their European competitors:- high wages, short working hours, inflexible personnel numbers, low pension payments and early retirement, generous health car and the list goes on. Today, some of the developing markets for their cars are in those countries which the migrants left for better times. Their ex-compatriots are not going to pay them 35$ per hour to build their cars for them when they can work in a plant locally at 7$ and hour to build the same car for a selling price appropriate to their incomes. Net result, a lot of political pain in France, migrants going back to staff and train the plants and the once French car companies going global to survive.

    The developed economies have priced themselves out of manufacure. The pundits have discussed for a decade or more the economic and social nature of a post manufacturing economy. Some efforts are be made to reintroduce manufacturing. Australia is no exception, the British dismantled much of their pool of brainpower in manufacturing, the US and France likewise.
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    Common component or Renault Parts Bin recycle as most here call it, would be good when extended to other marques, but for me, the bottom line of price derived by quantity production can also resolve to accepting less quality control on the final product, i.e. a COM 2000 problem if built into the system. Acceptance of a percentage failure i.e. one out of 10,000 components will fail in service, which is easy for the manufacturer, statistically they can point to their overrall reliability, but then its not so good for the consumer that gets the occasional lemon, and spread across many components, failure lemons can destroy reputations.

    Good prompt and reasonable replacement of the occasional faulty part under a generous warranty program would be essential if quality and longevity can't be gauranteed in sourcing the cheapest part at the lowest unit cost price, but as we see here a lot of that depends or falls to the dealer response and in some cases (as competitors point out) that is not as good as most consumers would like.

    Overall I'm with Robmac on this one, but at least it is some progress to at least consider, the proof is in the delivery and cost structure and demonstrable benefits to the consumer. IMHO!

    Ken

  15. #15
    1000+ Posts Kim Luck's Avatar
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    The Alliance has been using "common" platforms for years. They also only have one purchasing arm worldwide. Ghosn has done his best to position the Alliance where it can succeed against enormous opposition from rivals. The Alliance has a great deal of experience therefore in modular vehicles and the fact they are willing and able to share it with former rivals (of a sort) indicates to me the absolute necessity to increase volumes, decrease development and manufacturing costs and react quickly to market forces. I think they will continue to do a great job with young Carlos at the helm!
    Don't it always seem to go that you don't know what you've got 'til it's gone............

  16. #16
    1000+ Posts gerry freed's Avatar
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    Quote Originally Posted by Kenfuego View Post
    Common component or Renault Parts Bin recycle as most here call it, would be good when extended to other marques, but for me, the bottom line of price derived by quantity production can also resolve to accepting less quality control on the final product, i.e. a COM 2000 problem if built into the system. Acceptance of a percentage failure i.e. one out of 10,000 components will fail in service, which is easy for the manufacturer, statistically they can point to their overrall reliability, but then its not so good for the consumer that gets the occasional lemon, and spread across many components, failure lemons can destroy reputations.

    Good prompt and reasonable replacement of the occasional faulty part under a generous warranty program would be essential if quality and longevity can't be gauranteed in sourcing the cheapest part at the lowest unit cost price, but as we see here a lot of that depends or falls to the dealer response and in some cases (as competitors point out) that is not as good as most consumers would like.

    Overall I'm with Robmac on this one, but at least it is some progress to at least consider, the proof is in the delivery and cost structure and demonstrable benefits to the consumer. IMHO!

    Ken
    Contemporary car manufacture doesn't work that way. They all use variants on zero defect manufacture ie quality assurance, not quality control.
    All components eventually fail in service and the design issue is when. The idea is to design the components and assemblies such that the failures are all postponed towards the end of a consumer acceptable product life. When they fail prematurely, it reflects back on design errors and the practical limitations of 100% inspection of 100% of components with techniques that will identify premature failure characteristics. As a result component inspection is rare and unnecessary. A much more serious consumer issue is how to manage the failures in the field. Honda do it well for me. You pay for the insurance and they give you transport. If the car fails to proceed they pick it up and give you equivalent transport.
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