Getting new models into production can be fraught with peril
Don’t play cards with a guy called “Doc” or buy a car in its first year of production. After 120 years, you’d think the world’s automakers would have mastered the art of getting a new model into production smoothly, but the start of manufacturing — what car companies frequently call the “launch” — remains fraught.
A miscalculation can cost an automaker millions of dollars and bungle a meticulously planned campaign to build interest in the new vehicle.
The outside world doesn’t really notice when launches go well: The factory hums, vehicles get to dealerships on time, happy owners show off new features and boast about fuel economy.
But sometimes you get something spectacularly disastrous that is infamous for many years, like the Pontiac Aztek, the Ford Edsel and the Cadillac Cimarron.
When launches go bad, for whatever reason, the sky falls. New vehicles pile up at the factory awaiting repair; money is wasted advertising vehicles that can’t be bought because they haven’t made it to dealerships yet; assembly lines fall still; quality slides; complaints rise and CEOs tap dance while explaining profits are down because they mismanaged a core function of the business.
“Getting a launch wrong slows sales momentum and can increase an automaker’s costs” for repairs at the factory or after vehicles are sold, IHS Markit senior analyst Stephanie Brinley said. “The biggest risk is losing sales to early adopters who move on to something else.”
The best automakers make a science of launching vehicles. They do everything possible to simplify what can be an excruciatingly complex process.
They have launch teams, groups of executives and engineers who parachute in before production of the new vehicle begins. They spend months preparing the assembly line and workers, overseeing the beginning of production and acceleration from a slow, careful start to full-speed manufacturing. The launch teams then move on to the next hot spot.
General Motors managed the launch of its Silverado and GMC Sierra 1500 light pickups like it was juggling sticks of dynamite. Production began in one plant with a single body style and just a couple of engines. Over the course of nearly a year, GM added models like a chef carefully measuring ingredients into a dish.
Even the best prepared and most careful automakers see a significant increase in problems when they start building a new vehicle.
“We see reliability take a hit when new vehicles go into production,” said Jake Fisher, director of vehicle testing for Consumer Reports. “The more extensive the redesign, the bigger the hit.”
Like the swallows returning to Capistrano, every fall Consumer Reports’ influential study of vehicle reliability chronicles drastic declines by almost every vehicle that just went into production. At the same time, long-lived vehicles that undergo only minor changes rise to the top of the survey.
“Brands that value reliability more stagger their redesigns,” Fisher said. That may mean introducing a new vehicle this year, adding a new infotainment system next year and a new transmission in the third.
“Toyota’s very conservative about rolling out new technologies,” Fisher said. “They developed a 10-speed automatic transmission but introduced it in the low-volume Lexus SC (luxury coupe). If a problem develops, they’ve quarantined it to a low-volume vehicle.”
Hyundai uses a different method, hedging its bets by adding new technologies as options to tried and true parts. When Hyundai had difficulties with a small turbocharged engine and dual-clutch transmission in the Tucson small SUV, it pulled those options from the factory without interrupting production of Tucsons equipped with a proven drivetrain.
Ford executives admit they let complexity get out of hand launching the Ford Explorer and Lincoln Aviator
SUVs last year. Vehicles needing remedial work piled up at the factory and customers reported various problems.
“Simply put, we took on too much,” said Joe Hinrichs, president of Automotive for Ford. The company gutted and rebuilt its oldest assembly plant this year, then began production almost simultaneously of two vehicles that use a brand-new platform and offer rear or all-wheel drive, three gasoline engines, a hybrid model and a plug-in hybrid.
The surprise isn’t that things went wrong, but that vehicles didn’t leave the factory with Lincoln badges on one side and Ford ovals on the other.
Ford’s less ambitious launches of the Ranger midsize pickup and Escape compact SUV this year went smoothly.
While a botched launch can lead to a disappointing financial quarter and a few negative headlines, a good vehicle can overcome it.
The first nine-speed transmission built at the Tipton Transmission Plant in Indiana is signed by employees. The nine-speed transmissions were used in Jeep Cherokees.
Sales of the 2014 Jeep Cherokee were delayed by weeks while Fiat Chrysler struggled with programming its new nine-speed automatic transmission, but the vehicle went on to become one of Jeep’s best sellers.
“If the product connects with consumers, it can recover,” Brinley said.