**Global automotive sector**: Former Audi Head of Development Heinz Hollerweger highlights the end of traditional V-model car development, noting challenges from software integration, shorter timelines, and supplier dominance. He contrasts European rigidity with China’s agile, collaborative approach, urging innovation to navigate this historic transformation.
A significant transformation is underway in the global automotive industry, signalling the end of the long-standing V-model development approach. Heinz Hollerweger, the former Head of Development at Audi, has provided an insightful perspective on this paradigm shift, highlighting the evolving nature of car manufacturing and the challenges it brings.
Historically, car development followed a structured, sequential method. From the 1970s, vehicle components were developed step-by-step—starting with a concept, moving through design and prototyping, and culminating in production. Hollerweger recalls how early projects involved close collaboration with local suppliers, such as Freudenberg for hydraulically damped engine mounts, developed through direct and trust-based relationships. This approach allowed for coherent development with flexible, in-house adjustments.
However, from the early 1990s, following the arrival of Ignacio López at Volkswagen under CEO Ferdinand Piëch, there was a marked shift towards globalised, cost-driven supplier selection. This introduced rigorous requirement specifications and intense price competition, resulting in initial cost savings. Nonetheless, Hollerweger identifies a subsequent increase in quality issues and recalls, a consequence of pressure on suppliers and loss of longstanding supplier relationships. He reflects that the industry paid a “huge tuition fee” for this globalisation, and suggests that retaining European supplier networks might have been more advantageous.
With the rise of technology and the increasing complexity of vehicles, the 1990s saw the adoption of Simultaneous Engineering, integrating considerations of cost, quality, and manufacturability earlier in the development process. This approach improved stability but did not substantially reduce overall development time.
From around 2015, the automotive sector moved towards system engineering, shifting focus from individual components to integrated systems—such as combining sensors, control units, and actuators into cohesive modules. While beneficial for safety-critical systems, Hollerweger notes that applying this methodology rigidly to entire vehicles conflicted with the traditional skills of engineers and the organisation of procurement departments.
Today, the industry confronts further radical changes, driven by electric mobility, software integration, and evolving supplier dynamics. The once dominant platform strategy is dissolving as modular components and software-defined vehicles become the norm. Manufacturer control over development is reducing, with large supplier conglomerates like Bosch, Forvia, and ZF increasingly dictating terms and innovation. Software, in particular, presents challenges: its rapid development cycles and less quantifiable specifications contrast sharply with traditional hardware procurement.
Highlighting China’s automotive sector, Hollerweger emphasises its agility and efficient cooperation between manufacturers and suppliers. Chinese companies often eschew lengthy global tendering processes, favouring early selection of partner suppliers who collaborate closely from the outset, sometimes handling assembly directly on production lines. This contrasts with Europe’s entrenched and slower processes. According to Hollerweger, “Chinese manufacturers no longer tender at all. They select suppliers from the outset with whom they develop… China proves extremely flexible; Europeans cannot escape their standard processes; one would almost have to start anew on a greenfield.”
One of the critical emerging trends is the compression of development timelines. While previously car projects took about five years, future models aim for around a two-year cycle. The new approach emphasises rapid integration of modules, electrical-electronic applications, and architectures, followed by a shorter validation period before entry into series production. The old global tendering method alone required 20 to 25 weeks, a time frame no longer viable in an era of swift software development.
Hollerweger outlines the industry’s fundamental challenge: adapting to these new realities where supplier relationships, development cycles, and integration processes are reimagined. He underscores the need for manufacturers to cultivate small, expert teams capable of surveying and integrating in a complex supplier landscape.
The transformation reflects more than technical evolution; it marks a historical shift in automotive industry practices dating back nearly 140 years. Hollerweger notes, paraphrasing Friedrich Schiller, that “China is showing the way.” As Europe faces these disruptive changes, the former Audi executive advocates a revival of creativity, innovation, and dedication to retain relevance in the global mobility arena.
This analysis stems from an in-depth interview published by derStandard.at, where Heinz Hollerweger offers an authoritative view on the automotive sector’s future challenges and transitions.
Source: Noah Wire Services
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