US and EU Automakers Outpaced by China on Product Design
Automotive manufacturers in the US and Europe must completely overhaul new product development timelines if they are to compete with mounting competition from China.
This is according to CoLab, a technology company building collaborative design review and AI solutions for hardware engineering teams.
CoLab has collaborated with major automotive manufacturers including Ford and Schaeffler, and emphasises enhancing competitiveness is especially critical in the age of electrification.
Lets take a closer look at the data to demonstrate just how far ahead China is when it comes to product development.
Digging into the data
Data from the European Automobile Manufacturers Association (ACEA) shows that output from European carmakers has remained largely stagnant since 2010, decreasing slightly (1.5%) from 18.3 million to 18 million in 2023, with UK production dropping by up to 12%.
In stark contrast, figures from the International Organisation of Motor Vehicle Manufacturers (OICA) reveal that Chinese carmakers have increased production by 105% during the same period, rising from 13.9 million to 28.5 million.
Chinese carmakers benefit from fewer regulations, strong in-house capabilities and substantial government support for supply chains. These factors enable them to accelerate product design timelines significantly.
While European and US carmakers like Volkswagen and Renault traditionally take between 200-216 weeks to develop a new model, Chinese competitors such as NIO are able to bring new designs to market in approximately 120 weeks — almost twice as fast.
Building supply chain resilience to remain competitive
As US carmakers face further challenges, including new tariffs on goods from Canada, Mexico and China, strengthening supply chain resilience has become a priority.
The industry must focus on streamlining processes, reducing lead times, and making strategic design changes to compete effectively.
Businesses can begin accelerating innovation and optimising costs at the design stage without compromising on quality by modernising the request for quote (RFQ) process and introducing co-design methodologies early in the product development cycle.
"Engineering-led supplier co-design is an easy way to build supply chain resilience," says Adam Keating, Co-Founder and CEO of CoLab.
"Today OEMs send out an RFQ, wait for a response, and then share product data with preferred partners only when the design is finished.
"Instead, OEMs can bring suppliers into design when the CAD is evolving. Leveraging modern digital tools, like CoLab Portals, engineers and suppliers do collaborative tech reviews during RFQs to accelerate and remove admin from that process. This allows them to design together in parallel and adapt to changes in real-time.
"This is engineering-led supplier co-design and it's the simplest way for OEMs and suppliers to develop products concurrently while avoiding costly late-stage changes.
"The companies who adapt to this new way of supply chain collaboration see 30-50% faster lead times, 2x faster design cycles and up to 50% reduction in BOM costs."
Ford Pro Special Vehicles has adopted CoLab's tools and experienced similar positive changes, emphasising the benefits of collaborative design as a methodology.
“It’s a massive increase in speed,” adds Andrew Graves, Senior Project Engineer at Ford Pro Special Vehicles.
“We’ve rolled out CoLab to our entire 200-strong convertor network in Europe to accelerate design iterations and drive more innovative solutions.
"Now the converters can see the vehicle sooner, so they can get Ford products into the market quicker and help us be more competitive as a company.”
Intertwined with EV growth
Despite a slowdown in sales and production in 2024 due to reduced subsidies and strategic planning in anticipation of stricter emissions regulations, Europe is set to launch 160 new EV models this year.
However, these models must be both price competitive and exceed consumer expectations to successfully compete with their Chinese counterparts.
“China controls critical resources for EV components,” explains Stephen Gibson, Head of Product Development for Autoneum.
“To stay ahead, or indeed catch up, we need to accelerate innovation, optimise costs, diversify supply chains, and leverage heritage and quality for differentiation.
"The competition is heating up, It is disruptive and it will help us to ultimately progress faster.”
Adam agrees, adding that: “The EV race has been going on for nearly five years, which means companies going to market with models now are already very late.
“Success will hinge on the ability to be nimble, on simple platforms and on the strength of the ecosystems carmakers build.”
“The pace of innovation also means that some EVs are out of date by the time they hit the market. Product delays and missed milestones can cost millions of dollars, which carmakers cannot afford in a market that is already seeing widespread discounting.
"Traditional carmakers will need to double product design speeds and eliminate typical four to five year product cycles, or risk collapse.”
Beyond supply chains, how else can automotive manufacturers keep up? Through embracing AI.
Leveraging AI
To keep pace with Chinese manufacturers, European and US carmakers must embrace cutting-edge technologies that enhance efficiency and agility.
Developments in AI can play a crucial role in achieving this transformation.
AI-powered tools, alongside collaborative design software like design engagement systems (DES) and existing computer-aided design (CAD) platforms, can streamline design reviews, automate processes, and improve collaboration.
These technologies enable key partners to work within a secure, closed environment, accessing only specific product data while collaborating with in-house teams in parallel.
DES technology has already demonstrated its ability to accelerate lead times by up to 30%, allowing carmakers to realise revenue months earlier than traditional methods.
As the automotive industry continues to evolve, those who fail to adapt and embrace AI-driven design innovation risk falling behind.
European and US carmakers must take decisive action now to remain competitive in an increasingly fast-paced global market.
