Shifting legacy automakers into lean machines that can compete with Chinese OEMs will likely not come easily.
That’s according to Terry Woychowski, president of Caresoft Global, who said manufacturers need to adapt their product, process, and people if they expect to thrive amid immense pressure from Chinese automakers.
“Because if you think you can just keep doing what you’ve been doing the last 50 years, you’re delusional,” Woychowski said.
Driving the news: Longstanding automakers build their development processes around reliability and compliance, which slows them down, according to Woychowski.
He likened steering the auto industry in a new direction to turning an aircraft carrier 180 degrees while it’s in dry dock.
“They have so much resistance to change, just pure friction, and their process is designed to avoid change because change is seen as the enemy of quality,” Woychowski said, adding that engineering groups inside OEMs often work separately.
For example, he said, the powertrain group may own a hose, while the washer bottle it attaches to may belong to the body group.
“They don’t know each other; they don’t work together,” he said.
Meaning, even a simple tweak that touches both parts can get tangled in red tape with traditional OEMs.
“So how would you convince [one group] to put three pennies of plastic on their part that they don’t need?” Woychowski said.
The alternative, he added, is “$3 worth of brackets and bolts and nuts and labor.”
For context: Woychowski shared his take on Tuesday (Sept. 29) at Caresoft’s Technology Center in Southfield, Michigan.
Michigan-based Caresoft is an engineering solutions company that works with OEMs, off-highway and commercial vehicle manufacturers, and their suppliers on product development, cost optimization, manufacturing, and aftermarket.
In short, they tear stuff down to see what can be done better for less. (See below).
Caresoft President Terry Woychowski said the speaker in the center door is installed with four clips and four screws. Seems small. But multiply that by four doors, and that’s 16 screws. The door next to it slides the speaker into a slot with one screw, and he said a newer design just snaps in with no screws at all.
(Photo by CDG’s Julie Walker)
The China chatter helped kick off a touring visit from an overseas partner in Ras Al Khaimah (RAK), one of seven members of the United Arab Emirates (UAE).
The details: Speaking of efficiency, Woychowski credited the partnership with RAK, which the delegation said dates back about five years, for helping the company survive during the COVID-19 pandemic years.
“The partnership that you created, that you helped us with, was a lifeline for our company,” Woychowski said. “…You set up a process where within about 24 hours we’d get a vehicle through customs.”
He said that setup allowed Caresoft to do work faster than its customers could do it themselves.
Speed is also what Woychowski has seen from Chinese automakers.
Tearing into it: Caresoft has bought and torn down Chinese vehicles, including the Xiaomi YU7 and the Xpeng G6.
Woychowski said Chinese automaker Xpeng took Tesla’s casting design for its G6 and improved it (see below).
A torn-down Tesla Model Y, left, and Xpeng G6, right, at Caresoft’s Technology Center in Southfield, Michigan. (Photo by CDG’s Julie Walker)
Woychowski said Xiaomi, best known for its smartphones, built its YU7 to take on the Tesla Model Y, then the world’s top-selling vehicle.
He said it is only Xiaomi’s second car and was developed in 24 months, half the typical 48.
“Well, they did it,” Woychowski said. “They took them on, and I have been evaluating vehicles for 48 years, so I know how to do it a little bit, and I can tell you that in every regard, this car is superior.”
Meanwhile, legacy automakers, he said, are “still in clay” while their Chinese competitors are launching.
What dealers can do: Woychowski, seen below, said dealers are likely already wondering what vehicles to sell, and Caresoft’s work offers “a good understanding of the landscape of the global automotive industry.”
Caresoft Global President Terry Woychowski speaks by a torn-down Tesla during a tour of Caresoft’s Technology Center in Southfield, Michigan, on Tuesday (Sept. 29). (Photo by CDG’s Julie Walker)
Then he discussed the back of the house.
“...A lot of their profitability of their company is in the back end, in service,” Woychowski said, sharing about a time his Tesla’s AC compressor went out.
He scheduled the repair on his app and was told to leave his car and take a loaner from a numbered stall, no need to go inside.
And, he got a message later detailing the pickup just as easily.
Another time, a technician came to his home, replaced his 12-volt battery, and rotated his tires, just because he noticed, all while Woychowski was in a meeting.
The speed and ease of the service impressed him.
That’s the kind of experience that can keep customers coming back, of course.
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Zooming out: RAK, one of the UAE’s fastest-growing economies for business and innovation, is in the U.S. on a “scoping mission” that started in Florida and continues to Nevada and Utah, according to Dr. Carel Richter, an international advisor with RAK.
Richter said RAK serves as a hub for Asia, Africa, the Middle East, and Europe, with free trade agreements that help extend companies’ reach.
John Cunliffe, a business development advisor to RAK’s ruler, said Wynn is building a $6 billion integrated resort there, the first resort with a casino in the Gulf region.
The delegation said the goal is to keep fostering growth in the emirate through international partnerships that can range from education to manufacturing.
Looking ahead: Richter said the delegation aims for pairings that benefit both sides and ideally are win-win.
“So you learn from each other, but you also invest in each other, and that’s the idea we have with this scoping mission,” Richter said.
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