Traditionally, we think of a factory with roaring machines when speaking of car manufacturers. These manufacturers put their own marques on the car to show their promise and quality. As the cars become more complicated over time, however, most components of a car cannot be made in-house by manufacturers. Sourcing and procurement play important roles in building a car, and car manufacturers sometimes do not even manufacture the car themselves. Hence, cars of different brands can be nearly identical due to the overlapping supply chain. Today, customers choose a certain brand probably not because it makes good cars, but because it has been known for providing good cars.
Out-sourcing is where everything starts. It is the way to obtain high-quality components while saving the developing costs. The most common out-sourced component is transmission whose suppliers include Aisin, Getrag, and ZF. These suppliers have been offering the industry great gearboxes for a long time as they possess tremendous competitive advantages. The ZF 8HP auto gearbox should be the most dominant part of the industry, as it can be seen from hatchbacks all the way to supercars. Other components such as the differential, turbochargers, or even engines can be outsourced. Some famous power train suppliers are BorgWarner, Cosworth, Gleason, Haldex, Mitsubishi, and Yamaha.
Car makers sometimes source luxurious options from other industries. The stereo is a prominent example as Burmester, B&O, and B&W can be seen in many cars. The Bentley Bentayga even has an optional Mulliner Tourbillon clock that costs as much as the car itself. This strategy increments the image of a product.
How about outsourcing the whole car? That would be re-badging or licensing, and this is not new to the industry. The famous BMW Isetta is actually licensed by the Italian Iso SpA, and Daimler once licensed the UK Daimler Motor Company to produce their products. The trend is even more common in commercial vehicles currently. In Europe, we see Fiat, Mercedes-Benz, Opel (now a PSA subsidiary), PSA and Renault-Nissan engaged in different sharing of vans and light-duty trucks. The most notable case recently must be the BMW Z4 and Toyota Supra. They are both assembled in Austria by Magna Steyr, a long-time partner of BMW. This is part of the cooperation project between the two groups.
That brings us to the cooperating projects. A car brand not only sells others’ cars under its own marque, but it can also start sharing since the R&D phase. This is popular among brands from the same group, and VAG is undoubtedly the most prominent one. They share engines and modular platforms across the group, and this help control the costs while maintaining product diversity. Recently BMW and Daimler are engaging in the car-sharing business and the rumored future FF chassis.
As a result, cars are secretly becoming more and more analogous. Even Mercedes, who has long been famous for self-development, employs a co-developing strategy with Renault recently. The new A200 has a 1.33L engine that is shared with Renault, a 7-speed dual-clutch gearbox from Getrag, and a cost-oriented torsion-beam rear suspension. With all major power components shared, the difference between an A200 from its siblings lies in design and decoration. Though it may still obtain the characteristics of traditional Mercedes, is it still a Mercedes that we want?
While cars may be unbelievably similar, the variance within a single model is still possible. This arises from the local assembly strategy. Take German cars assembled by their Chinese joint ventures for example. German brands are producing some popular models domestically in China to cut costs. Although the main power train is still imported as a knock-down kit, other minor parts are procured from the local supply chain. German brands always claim that they scrutinize the quality of local suppliers carefully, but the quality difference from the German domestic suppliers always exists (not to mention some scandals).
Multiple production sites for a single model are prevalent today. BMW and Daimler have several sites in Asia now. According to others’ experiences, German cars manufactured outside Germany can never match the ones in Germany. This may be the reason that BMW X Series from X3 above are notoriously problematic since they are all from the USA.
Therefore, even if you are buying for the brand, it still depends.
