| 12:05 PM EST

What You Need to Know About 10-5-2.5-1

(No, They’re Not Coordinates)


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Although since the decline in oil prices have driven demand for performance cars, these 0-to-60 vehicles are really nothing compared with the accelerated pace that is now part of the whole product development and execution approach in the industry.  What was once considered fast in this arena is now not fast enough.

The new product cadence paradigm is “10-5-2.5-1.”  This mantra resonates with an industry which is being asked to speed innovations into the fleet more quickly than ever before.  Let’s break this apart.  “10” is the number of years between major shifts in build processes for new architectures.  Simply stated, it is the order in which parts and systems are coordinated to build the vehicle.  Many call this “shingling.”  The integration of new processes drives changes in equipment and tooling.  Given the cost of a new bodyshop or paintshop, OEMs carefully ensure that these expensive retooling exercises are justified.  With these new architectures are new materials, assembly processes and joining techniques.  Every 10 years seems to be the new timing for revised processes, a decline from 12-14 years we have witnessed from some OEMs over the past couple of decades.

This leads to “5.”  Though for years the Japanese followed this timing for major/all-new revisions between substantial build process changes (see “10” above), others are now following to keep pace.  Non-Japanese OEMs have now structured their development processes to coordinate with this timing, mainly due to the pace of new innovations required in the fleet.  Every 5 years one should expect all-new exterior and interior designs, as well as powertrain packaging, what we affectionately call a structural “all-new.”

Innovation integration at this increased pace is driven by three major factors:

     1. Legislation demanding improved fuel economy and reduced emissions

     2. Globalization and economies of scale at the platform level which is spurring an inter-region coordination of platform revisions to ensure all are in relative lockstep

     3. The consumer is spurring the industry to innovate more quickly as they view the pace of other industries touching their lives  

Then we have the new “2.5.”  Symbolically, this is more than just the midway point within a 5 year major/all-new product revision.   As recent as 15 years ago, many OEMs treated the 2.5 as an opportunity to add a new bodystyle or to revise front and rear fascia/lighting.  Little thought was given to changing sheet metal in the middle of a cycle.  This paradigm changed as Ford followed many of the Japanese mass-market offerings with a major revision of the 2009 Fusion.   Though the 2006 Fusion was an all-new offering, several improvements were identified early in the program.  This “major/moderate”—as the industry dubs these revisions—impacted the interior, exterior, powertrain, and even the suspension/chassis.  Changes this swift after a new offering were previously unheard of in Detroit.  Now it is the table-setter for virtually every OEM.  Within the mass market, one is not likely to see an offering untouched for 5 years again.

Lastly is the “1.”  Years past OEMs would introduce new colors, seat trim and occasionally an option if it did not adversely impact hard tooling.  In an effort to integrate innovations more quickly, annual changes in content and features is the new mantra.  Especially in electronics, the pace of mobile phone developments, connectivity expectations and the drive for 100% uptime performance are spurring the industry to ramp up the level of annual changes as regards integration. This includes the integration of new software and hardware improvements, as well as ensuring all systems work in harmony.  We should expect an increase of new content integration every year as OEMs seek competitive parity and do not want to be left behind.

What is the punchline to this accelerated pace?  OEMs and suppliers who can integrate innovation effectively in an increasingly complex vehicle on a global scale will attain success.  Strong supplier partnerships, seamless boundaries and coordination are the key modes of profitably achieving this accelerated pace.  One element is assured: the industry will not slow. 


Michael Robinet has been a managing director of IHS Automotive Consulting since 2011. Prior to that, he was the director of Global Production Forecasts for IHS Automotive. His areas of expertise include global vehicle production and capacity forecasting, future product program intelligence, platform consolidation and globalization trends, trade flow/sourcing strategies, and OEM footprint/logistics trends.


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