Modules & Systems Report

CD-ROM available on request

Systems and modules is a very important strategic issue for vehicle makers and leading first tier suppliers. The market for outsourced modular assemblies is expected to grow from US$52bn globally in 2003 to over US$90bn in 2010.

Vehicle manufacturers remain very interested in the long-term potential of outsourcing responsibility for more of the major sub-assemblies and integrated systems of vehicles.

The major car makers appear committed to a long-term reduction in the level of in-house value added, as the complexity and equipment levels of new vehicles grow and the role of platforms and niche vehicles has expanded and the growth of modules and systems has extended beyond Europe to Japan and Korea.

But the growth of systems and in particular modules has not been as fast as expected in some areas, and suppliers have sometimes found it difficult to earn money on the larger, more complex developments and assemblies that they have undertaken.

Both suppliers and carmakers have experimented with different business models to resolve the problems inherent in this development.

Suppliers have adopted a range of strategies in the area - ArvinMeritor and Faurecia have concentrated on modules, while Bosch and Valeo have focused on systems development, for example.

ZF has decided that it is primarily interested in systems and modules for medium volume models, where it has a large in-house content.

Supplier parks and supply chain management have developed in ways that were not expected as suppliers have confronted the tasks that OEMs are trying to transfer.

The report aims to map out these developments in detail so that supplier and purchasing executives can compare and contrast strategies.

Definitions of modules and systems

Modules

Modules are sets of components that are supplied to the vehicle maker ready assembled.

Additionally they are delivered just-in-time or in-sequence with the vehicle manufacturers' final assembly schedules. The vehicle maker may also assemble modules in-house, as part of a process of reducing the final assembly line complexity, but frequently they are coupled with the growing level of outsourcing.

At the early stages of modularisation, modules were simple collections of parts for off-line assembly, but increasingly modules are being designed as complex units, which incorporate multiple functions.

Examples of modules include seats, doors, cockpits, front-ends and suspension corner modules. Each of these can include components from two or more major vehicle systems.

Systems

Systems are groups of components within a car that are linked by function rather than location.

For example the different parts of a safety system or a braking and traction control system are located in separate areas of the vehicle and incorporated into several different modules, but they will have been designed to work together as a complete system.

Increasingly systems are becoming more complex, driven by the automotive industry's growing environmental, safety, performance, reliability and durability requirements and by the emergence of new technologies, enabling a greater range of functions to be offered to the vehicle owner.