Global viewpoints: Europe embraces the AT-factor
Mercedes-Benz: satisfying market needs with engineering answers
DaimlerChrysler is one of the world's most significant automotive companies, and Mercedes-Benz is one of the best-known brands. The company's products are equally successful both as taxis and as the preferred transportation vehicle of many people at the pinnacle of the socio-economic and political pyramid. This is a difficult combination to have achieved and equally difficult to maintain, particularly as the company spreads its abilities and interests further, with the addition of models including the A-Class, smart, and SLK, and with more to come, including the Maybach. A vital element that enables Mercedes to sustain and enhance its global position is the use of advanced technology at every level of design, in product engineering, and in its manufacturing systems. But technology, which can be used to solve problems and improve products, can also escalate to become a nightmare of costly complexity if it is not used pragmatically.
 Hans-Joachim Schöpf is Senior Vice-President, Mercedes-Benz Passenger Car Development, and a member of the Executive Committee, Mercedes-Benz and smart. Mercedes-Benz considers Japanese quality as being excellent, "yet we have to stay ahead," Schöpf said. |
Dr. Hans-Joachim Schöpf, Senior Vice-President, Mercedes-Benz Passenger Car Development and a member of the Executive Committee, Mercedes-Benz and smart, said, "When we started to think about the concept of complexity, our first question was, 'What is complexity?' We realized that very often it concerns connections—plugs and sockets—and more and more ECUs (electronic control units). So I think there will be some simplification of this in the future, with more electronic buses.
"For example, the more we use CAN (Controller Area Network) and later MOST (Media Oriented Systems Transport) buses, the easier it will be to provide plug and play in communications and information technology in the car. On the other hand, we should not compare a premium car with a 'commodity' car. A premium car always has a lot of well-engineered and advanced technology incorporated in it, and that means more electronically controlled systems. However, we do have to simplify the application of technology."
The MOST fiber-optic network provides a mechanism for transporting high volumes of streaming data. It was originally designed by Oasis SiliconSystems AG in cooperation with BMW, Becker Radio, and DaimlerChrysler.
Schöpf stressed that cost does not follow a similar curve to complexity, and maintained that complexity does not affect quality. "You can master the complexity in a well-structured development process," he said. "But we do have many opportunities to bring down costs, including miniaturization of systems such as ECUs and benefits from economies of scale as production of such components continues to increase. And, of course, miniaturization saves weight and aids packaging. I believe we will be getting the benefits without having to pay too much for them."
Although Mercedes has gained a reputation for high-tech products, Schöpf believes it is important to realize that the company's use of technology is market-driven. "The markets we serve are primarily Europe, the U.S., and Japan, areas in which a premium brand product like Mercedes-Benz is expected by customers to have a very high level of technology," he explained. "It is very important to be a technology leader and to be first to market with technology in some fields including chassis, communications systems, and powertrain. But we do not always have to be first to market with every new piece of technology. However, we do need to have an overall strategic ability to achieve what the customer expects; we try to satisfy market needs with engineering answers."
 The stretched Mercedes-Benz A-Class. |
The four key technology areas that Schöpf regards as the most important for Mercedes are design, safety, engine, and powertrain. Also of great importance, he said, are information and car communication systems, which must include not only practical driving support features such as navigation, but facilities expected by adults in an office or by children in a playroom.
Cost pressures affect premium car manufacturers just as they do a volume producer, and Mercedes has a strategy. "When we start to define a new platform or car, the first thing we do is to try to find the right pricing targets for the markets and then derive our cost targets from those," Schöpf explained. "Such cost targets are very strict. We break them down to modules and to systems. Once we have done that, we work cross-functionally with all the production and engineering specialists, and with designers and suppliers to meet required costs. The pressure to get these figures right is increasing because there are a lot of competitors who try to tackle us in the relevant segments, and our range is quite broad now—from A-Class to S-Class. Our competitors try harder than they did in the past. For example, we now regard Japanese quality as being excellent. Yet we have to stay ahead."
One way of reducing costs is via economies of scale through higher volumes, an approach that can be aided by the formation of commercial alliances. Schöpf sees this as a viable approach only as it relates to suppliers, not generally to other OEMs. "We work with suppliers on a global basis," said Schöpf. "On information and communications systems, we work particularly closely with Japanese companies for the Japanese market because, in this field, they have the best understanding of what the customer really needs."
Although Schöpf does not generally see Mercedes working in alliance with other OEMs, DaimlerChrysler does have an alliance with Ford (plus Ballard and Ecostar) involving the development of fuel-cell technology and production systems. He said the company is "focusing sharply" on fuel-cell technology and investing in it heavily. "We are spending some of that money just to learn how to be positioned in the cost and weight curve and how quick we can be," he said. "If huge amounts of money are not spent, these questions will not be answered." Meaningful fuel cell volume production—about 50,000 units per annum—will be achieved no earlier than 2010, according to Schöpf, but he expects at least 50-100 units per annum by 2003 or 2004.
Safety is another costly and complex challenge for every car company. Schöpf is confident that many further improvements can be achieved, "but not just by having a car with 20 or 30 airbags." The need to continue development of both active and passive systems is essential, he believes, with technologies that warn of, and then prevent, accidents holding great promise. Opto-electronic systems that "watch" traffic around a vehicle is a specific technology being considered. The company already has developed very small camera systems, and Schöpf is confident that this type of equipment will not be costly. "In 1975, few would have imagined that ABS would become a mass-produced item," he observed. "It would have been thought that the cost would be too great: now it is not. The same might have been said years ago about the cell phone. I am optimistic that opto-electronics systems will be like that."
Although aluminum is playing an ever more prominent role in automotive products, Schöpf is convinced that there will not be a 100% aluminum-bodied car from Mercedes built in "high numbers," mainly because of costs and manufacturing complexity. "I do not regard saving 30 kg (66 lb) of vehicle weight at a cost of DM3000-4000 as the right ratio," he said. "However, the increased use of tailored blanks is another route to weight saving, as is the use of aluminum alloy steel and bake-hardened high-strength steel."
 An engine is ready to be installed in a Mercedes-Benz CL. |
Like most other automotive companies, Mercedes is concentrating on enhancing manufacturing efficiency, both to save costs and enhance quality. Based on cost/time, Mercedes-Benz manufacturing is now 35% more efficient than it was 10 years ago, according to Schöpf. "Quality is better, too," he said, "although not by that much, which is good, as by definition it would have been 35% worse than it is today—which it was not. When we are manufacturing a new model now, the specification is defined at a very early stage and all the people concerned discuss the prerequisites in the engineering and manufacturing process and the market. With the C-Class family of models, we knew how many derivatives there would be from the core sedan; working simultaneously off those derivatives is much better for the manufacturing process because we save assembly time, BIW time, and have the ability to build different cars down the same line, which we do with the C-Class sedan and station wagon."
The C-Class Sports Coupe could, in theory, also be built down that line, but assembly time for that model is longer. "What you should never do is mix a car on one assembly line that has more stations," said Schöpf, noting that a typical Mercedes assembly line is now 20-25% automated.
Mercedes is making more use of e-commerce. "Working with your suppliers via e-business makes change management much quicker," Schöpf said. "Also, the supply chain can be faster. It is all about more speed and less change. We will be using it increasingly. One of the prerequisites for us is the CATIA pipeline; nearly all our designers and engineers use it. It brings down development time and costs and brings up quality at a very early stage."
A seemingly endless problem for every manufacturer is the ever-changing demands of government regulation. Schöpf sees it affecting safety, emissions, and fuel economy disciplines at Mercedes-Benz. "What really worries us is that regulations vary so much between Europe, the U.S., and Japan. I hope that it is improving, but I am not optimistic," he said.
What worries Schöpf most about the future is the old problem of price wars. If the price paid by the end user is artificially low, then company profits decay and investment slips. "There has to be more reality—with people appreciating what their money is really buying when they take delivery of a modern, high-specification car," he said.
