The need to establish specialized companies in the automotive design industry


Design is very important in the automotive world, and as a highly specialized profession, it includes everything from conceptualization through to building prototype. One of the keys to the success of the world's leading automotive companies is the use of unique designs and collaboration with renowned designers. Car design is a teamwork and the result of collaboration with designers, engineers and even various companies. Therefore, teamwork and the collecting ideas from individual designers is very important. This process requires a lot of time and investment. It costs between $ 100 million to $ 1 billion to design a car, depending on how old or new the design is, and takes between two and four years. Car design involves a variety of stages from the initial idea to production, and although there may be differences between different companies, the overall process involves the steps shown in Figure 1.

Figure 1- car design process

Planning and specifications  ---> Concept design-----> Market research----> Test car----> Final design



Given the high cost of innovation in automotive design, automotive companies have abandoned all previous design approaches in order to increase productivity, cut down costs and improve the attractiveness of products. Design has become popular due to its economic viability and ability sharing. Toyota, BMW and Peugeot, for example, have jointly set up a Czech company that designs and manufactures diesel engines, offering them at a competitive price for all three automakers. This will reduce development costs. It is also very common to outsource parts or the whole design and construction process. Outsourcing is usually due to the expertise or skill of the companies in designing specific models or reasons such as beauty in design, efficiency and safety.

Companies such as Burton, Holley, Valmet, and Carmen provide automotive design and manufacturing services to automotive companies. For more than 50 years, the Italian company Pininfarina has been designing models of Mercedes, Ferrari, Maserati, Alfa Romeo, Peugeot and Fiat cars. In addition to car design for world-renowned brands, the company also works with Asian automakers such as Korean companies Hyundai and Daewoo, and Chinese companies such as Chery, Jack and Brilliance. The company covers all stages of car design and development such as initial design (original design and images), ‌ virtual 3D model (virtual modeling, feasibility studies, aerodynamic studies), ‌ physical model (model), various tests and experiments (optical scanning), wind tunnel, sustainability, reverse engineering and construction of the final model. Since the 1980s, Pininfarina has been involved in the design of high-speed trains, buses, trams, cruise ships, airplanes and private jets and also expanded industrial design, interior design, architecture and graphic design by establishing "Pininfarina Extra" company.

Given the above mentioned issues, one of the most important weaknesses and missing links in the automotive industry since its formation has been the inability to design a car and develop the platform in the country. Iran's first successful experience in this field was the design of a Samand car on the Peugeot 405 chassis with the advice of British, German, Austrian and Korean designers and engineers. The design of this car in the seventies cost about 500 billion tomans (equivalent to 500 million dollars) and lasted more than 6 years. Given that the platform shares this car with the Peugeot 405, this time and cost is high globally. In addition, after the introduction of Samand in 2002, Iran Khodro has mainly focused on the facelift of existing products and no platforms have been developed. Meanwhile, the life of car design in the world has decreased; In South Korea, for example, the design life of a car is about 4 years, after which the car is presented with a new look or redesign. This issue has also been considered by domestic companies and in 1396, a $ 250 million contract was signed between Iran Khodro and 10 companies from different countries, including Germany, Italy, South Korea and Belgium to design and develop a new platform. If this cooperation leads to the learning of the Iranian side and the creation of design power among Iranian partner companies, the Iranian automotive industry can gain the ability to design and produce a complete platform. The important issue in this type of cooperation is that, firstly, learning is fully done and the Iranian side involved is active to ensure the transfer of design knowledge, and secondly, the private sector is the main element in this field to guarantee knowledge accumulation in cooperation with automakers. In this regard, establishing a joint car design and development center in close cooperation between domestic automakers and the private sector and foreign consultants, can facilitate specialized learning of various components of car design in this center and reduce the cost and time of car design for Iranian carmakers and thereby improving competitiveness.



Key Points

  • Given the rapid evolution of technology and the importance of innovation in the production of new products, outsourcing car design or receiving consulting services in the car design process is important. There are numerous reasons for outsourcing car design and development including high cost and time, the risk of project failure and the need for extensive expertise.
  • This is especially important for start-ups and manufacturers who have little design experience, so that Chinese automakers are now consigning the car design to international design companies to better compete in the global market and attract customers and employ reputable designers in order to create specialized design centers.
  • Outsourcing design is used for different purposes. In the automotive industry, for example, Volkswagen is partnering with Pininfarina to diversify its product design or luxury product design, while Chinese automakers have relegated their product design to Pininfarina  because not only they lack experience in design but also seek learning as well as attracting customers.
  • Automotive companies can work with design centers to bring new and innovative products to market in a shorter period of time, to cut design and product development costs, reduce the risk of failure in the design phase, and ultimately benefit from all scientific and creative capabilities in the marketplace.
  • Given that many Iranian companies do not have the financial means and expertise to design new products, they can invest in a "joint design and development center" and work with international design companies to learn design knowledge and provide services to all Iranian car companies.
  • Over the years, there have been several collaborations with international design companies, but domestic companies have not acquired the knowledge of platform design. Therefore, in future collaborations, it is necessary to emphasize the transfer of knowledge and technology of platform design.
  • In addition to the automotive industry, in the field of other industrial activities, by accurately identifying the value chain, manufacturing companies and companies with potential for design and development can provide this specialized chain to a limited number of design and development companies and create economies of scale for them thereby benefiting from their knowledge spillover in other industries as well. For example, if a company specializes in the design and development of industrial pumps in an industry (such as the oil industry), it's possible to benefit from its ability to design the required pumps in other industries.



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