The return of the auto wars

As the Geneva Motor Show kicks off, it’s worth spending a little time analysing developments in the industry widely seen as the place where procurement is held in the highest regard. It’s here that the most CPOs have board level visibility; where purchasing truly does define success or failure.

Perhaps the biggest recent news is that GM and Peugeot-Citroën have established a joint venture to buy commodities and components to the tune of $125 a year, in a move that will, in the words of GM CEO Dan Akerson, "position GM for long-term sustainable profitability in Europe".

Which is exciting and game changing.

However, over at Volkswagen, another dawn has arrived with the launch of its Audi A3 premium compact car. Writing in the Financial Times, Chris Bryant describes how with the launch, "VW is firing the starting pistol on a grand experiment to boost the use of common components and design parameters" across its many brands, including VW, Audi, Seat and Skoda.

The idea is, basically, specification management, on a grand scale which will see production costs slashed by 20% and manufacturing time by 30%.

VW calls this revolution the Modular Transverse Matrix. And it’s well worth keeping an eye on.

David Rae is editor of Procurement Leaders. To subscribe to the magazine, click here.