Industry Analysts Suggest VW's MQB Platform is Overhyped

Volkswagen is touting its MQB platform as a massive cost-cutter, which will allow them to produce their cars at a lower price, and share as many mechanical bits as possible. They say the move to a single platform system will allow them to gain savings of 20 percent in a production cycle, but the claims are now disputed by industry analysts, who have studied the situation more attentively.

According to Bernstien Research analyst Max Warburton, who talked to The Detroit News, the savings achieved by the MQB platform “have been over-hyped and were inevitably set to disappoint. There is absolutely no way a new platform can save 20 per cent of the cost of a vehicle at VW’s level of scale,” despite the fact that investment banks predicted huge savings for the Wolfsburg giant, of between $7.5 to $10 (€5.72 to €7.63) billion, but only after at least 4 million vehicles used it (2015 – 2016).

Warburton disagrees again, and argues that “there is nothing to suggest to us that MQB will be transformational and we do not see how this can be a cost cutting story or a self-help story. It is not going to dramatically lower costs – VW is already a world leader in platform scale and is arguably beyond full economic scale.”

Quoting a former BMW official who said, “scale economies become much less significant beyond one million units,” Warburton tries to strengthen the idea further.

He does agree that there are advantages and some costs will be cut, but not to the extent to which VW says so. In addition, he says that because the group is so big and encompasses so many brands (Audi, SEAT, Skoda, Bentley and Lamborghini), they do stand the best chance of making it work.

Furthermore, VW has assured itself a place in the US and China that are providing much-needed sales, which the weak European market has failed to provide. Still, it seems that they somehow managed to avoid the full brunt of the economic crisis on the Old Continent, so they definitely know what they’re doing.

As is the case with matter such as this, a good few years will yield an answer, so all we can do is wait and continue speculating.

By Andrei Nedelea

Story References: Detroit News via TTAC



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