Manufacturing Capability and the Architecture of Future Vehicles

Based on the framework of design-based comparative advantage, in which the dynamic fit between organizational capabilities regarding genba (manufacturing sites) and architectures of products and processes affect the competitiveness of the sites and industries, this chapter describes and analyses various issues within the world automotive industry. The current US automobile crisis is seen as a long-term consequence of the gap between the division-of-labour type capability and the integral-type architecture of small cars. Japanese competitiveness in small cars in the late twentieth century is illustrated as the fit between path-dependent accumulation of co-ordination-type organizational capability and stricter safety-energy-environmental constraints imposed on vehicles in advanced nations. The possibility of the commoditization of automobiles is discussed from the modularization point of view. The modular nature of locally-designed Chinese vehicles, as well as the integral nature of Indian low-cost vehicles, are considered. The architectural differences between purely electric and hybrid vehicles are emphasized as the chapter discusses the possibilities and limitations of the former type. Toyota’s recent recall problem, discussed later in the chapter, is seen as a problem of product complexity overwhelming the company’s organizational design capability.