Early design freeze brings purchasing power

In an earlier feature on design for manufacturing (DfM), we heard how those with manufacturing nous are working incredibly closely with their design colleagues pretty much from the outset. That is the experience of one Chinese brand at least, as testified by Xpeng's Alain Simon. 

But another designer from a separate Chinese brand has a different perspective on things. While designers work closely with manufacturing experts on practically all elements of the car, all of that effort has a knock-on effect when it comes to purchasing. Although every OEM will have its preferred suppliers, there are always price negotiations and it is the purchasing — or procurement — department that handles this. In simple terms, getting the design signed off early liberates extra haggling time. 

"One of the strengths of Chinese OEMs is they try to keep the negotiation phase as long as possible,” explains Sergio Loureiro da Silva, interior design chief at Zeekr. “This means we have purchasing competition where you have three or four suppliers competing on price. So negotiation with external companies does come into it as they will eventually get the final manufacturing data."

This way of working may reflect the fact that a design is conceived collaboratively with those who know what will work on the factory floor. By that point, "the data is more or less frozen from a design point of view," da Silva continues. "You know how many elements you have on the door panel — it’s divided into five, six, seven parts, let's say — so you know more or less how the car is put together. That data is then given to suppliers to quote."

From there, design is very much hands off and it becomes a process of crunching numbers and cutting deals, so to speak. "The purchasing department leaves a window — a very large window — to negotiate the price down as much as possible, allowing the suppliers to compete against one other," the Luxembourg-born designer tells CDN. "Just like a price war of sorts, although always in good spirit [laughs]." 

So far this month, we have heard how manufacturing constraints are considered from the very beginning, and particularly with small teams like that of Oilstainlab. We have also learned that design and manufacturing are by no means as segregated as one might expect. These are departments that work together on a daily basis — in some cases doodling together at an early stage to check feasibility — and balance the brief, the idea and ultimately the manufacturability of a product. And in an increasingly short timeframe. In doing so, all of that hard work up front means that procurement team has more time to negotiate favourable prices with their suppliers. 

On reflection, it offers an alternative perspective on the topic of China speed. While it is impressive to see how significantly the production cycle has shortened — in some cases designing a car in just four months — there does often follow a pertinent question: what is the rush? There is almost inevitably an internal pressure to get new product out there and appease the masses who, apparently, desire new cars on an ever faster basis. But that speed is also clearly an enabler for pricing: design quickly, work the deal slowly. 

One might argue that simply lengthening the production cycle would still allow for deals to be made at a time that suits, and with less pressure on designers. But slowing down does not appear to be on the industry's radar right now.