John Grifonetti on the Importance of Flexibility and Adaptability in the Auto Industry

Recent years have been difficult for the automotive industry. Weakening sales in China, market stagnation in the United States, and hopes that a full-blown trade war will not break out have been worrying automotive executives. The coronavirus pandemic caused devastating plant closures and a severe drop-off in car sales. The rise in global gas prices is a reminder that the prevailing market may shift back from larger crossovers and SUVs to smaller vehicles.

Throughout the industry, flexibility has been necessary to meet shifting parameters and accomplish today’s challenges. John Grifonetti explains how automobile manufacturers are changing their operations to meet the challenges of the new age.

Assembly Line Flexibility

Designing assembly lines for more than one type of vehicle is nothing new. However, having the capability to shift production from one vehicle type to another proves vital for an industry that needs to cope with multiple challenges.

Japanese-based manufacturers like Honda and Toyota have been leaders in flexible manufacturing. Historically, automakers in Japan focused on making their processes and platforms interchangeable out of necessity since one model could not sustain an entire factory.

American and European automakers are working hard to catch up. For example, Ford’s Kentucky truck plant makes its best-selling large SUVs and pickup trucks on the same platform. This plant is expected to reach full capacity this year.

General Motors shows the damaging effect of dedicating an entire factory to one type of car. The Lordstown, Ohio GM plant was dedicated only to producing the Chevrolet Cruze, a compact sedan. When the Cruze was discontinued in 2019, GM idled the plant. As of early 2021, the plant was abandoned. This caused a huge ripple effect in the industry and on local businesses and community members.

Creating a Flexible Assembly Line

Creating an assembly line that can build a range of body styles requires careful coordination. Car design engineers must work closely with those who make the tools used to assemble the vehicles.

Honda has been a pioneer in making more than one type of vehicle on the same assembly line. Its plant in Greensburg, Indiana, manufactures both the compact CR-V and the Civic sedan. The CR-V was added to the factory due to the increasing popularity of the SUV class.

Honda designed these two vehicles to be produced on the same line, but some hiccups along the way required creativity to address. Civic and CR-V tailgates are meant to be welded on the same line, but plant engineers discovered they were not compatible. The plant had to reorganize its production by buying more welding robots and splitting the floor between the CR-V and Civic. This enabled the company to use the plant’s existing space to weld two entirely different vehicles on one line.

Toyota has also been able to incorporate flexibility into its plant designs successfully. In 2018, Toyota began constructing a factory in Mexico intended to assemble the Corolla sedan, but the factory will now assemble Tacoma trucks. Usually, such a change would result in significant delays. Still, Toyota engineers and plant managers did not find the process difficult because the building plans were already set up for flexibility.

Flexibility in Engine Types

The hybrid and electric revolution is coming quickly. As automakers project their propulsion technology needs for the next ten years, no one is sure exactly how they will play out. Cars may be propelled by combustion engines, hybrid engines, or by fully electric motors. Automakers like GM are proactively working on each technology to improve their performance in a shifting market.

Supply Chain Globalization

In today’s competitive environment, it is even more important to rely on a global supply chain. Supply chain flexibility has been one of the most important considerations for the automotive industry for several years. Parts are frequently built in countries like China and transferred to countries with major manufacturing plants, like Mexico, the United States, and Germany. John Grifonetti reports that the automotive industry’s globalization means that each car manufacturer needs to make sure that they are ordering the right parts from the right countries.

Flexibility in Sales

While 2020 was extraordinarily difficult for carmakers and their sales forces, 2021 will likely see some economic recovery. Car lots are stocking many large and compact SUVs, as in years past. However, rising gas prices may make smaller cars, hybrids, and electric models more popular.

Car dealers need to be flexible in what they order, and they need to be sure to price their offerings accordingly. In a recession like that caused by the coronavirus pandemic, it is wiser to keep smaller numbers of vehicles in stock. It is hoped that the economic recovery that goes along with the vaccine rollout will bring car sales back to their previous levels.

A Flexible Industry

John Grifonetti believes that the car industry is prepared to take on some of today’s greatest challenges. Global economic conditions have been extremely difficult, but the corner has been turned, and the economy is beginning to recover. As carmakers continue to practice flexible manufacturing and sales techniques, they will satisfy the market’s demands for cars and trucks that fit their needs.

John Grifonetti has built a career investing into small businesses and personally helping them grow with his considerable acumen for understanding markets