Mercedes-Benz to outsource engineering

Nearly half of Mercedes-Benz’s entire research and development budget is being spent on green technologies, forcing it to consider outsourcing some of its traditional hardware engineering, Daimler's R&D chief Dr Thomas Weber admitted last week.

While insisting core engineering functions like safety or chassis architecture would never leave Sindelfingen’s control, Dr Weber said other areas of engineering were not as sacred.

“We are responsible for everything in every car; the only thing we will really do is to ask what we necessarily need to do in-house.

“If we can shift engineering work to some engineering suppliers, it’s better for us,” he said.

The admission came as Dr Weber explained that the push for internet connectivity and autonomous driving was pushing car-makers to focus more intently on electronics engineering and less on their traditional skills.

“We are spending about 50 per cent of the whole research and development budget on green technologies, but that’s not just engines,” he said.

“That includes the whole investment in engines and transmissions and the drivetrain and in hybrids and lightweight construction and aerodynamics.

“Fifty per cent is a huge number and electronics have been a huge part of this. The share of electronics is definitely increasing in R&D spending.”

Traditional engineering still takes a big slice of the Mercedes-Benz engineering pie, he said, though its share would decrease as electronics and green technologies continued to rise.

“The overall vehicle body-in-white is also still a major share of what we spend today.

“Our target is to reduce the share of R&D spending on this part by standardisation internally and sometimes, from the development point of view, with external suppliers.

“The share (of R&D budget) in this field has been at a constant level but if we anticipate that the whole budget will grow, the percentage point of this technology will be step-by-step reduced.

“A lot of that is because electronic simulations are making this cheaper than it used to be.”

Mercedes-Benz is already sharing engineering resources with Nissan and Renault, an alliance that has produced cars like the smart fortwo and forfour and the Renault Twingo.

It will also give Mercedes-Benz a pick-up truck and the companies have rebodied commercial vehicles, as well as Mercedes using Renault-built four-cylinder engines in its smaller cars.

But Dr Weber intends to extend this further.

“We would never do it outside for platform engineering or development for core models, though, but if it’s an adaptation of a model, for a specific market like China, why not?

“I know the huge amount of money we spend for adaptation because today we use our own subsidiary engineering operation.

“When it comes to a variant of an existing model or a China version or a specific adaptation for a specific country, then why not do it outside?” he asked.

Even if Daimler does outsource some engineering, Dr Weber insisted there were areas that would remain sacrosanct, especially new architecture development and safety.

“We will keep new innovations, platform, the first vehicle in the cycle, the first prototyping. That will never leave.

“Safety is one of the key areas and it’s still a core for our brand. In safety, we have to improve with the passive safety work and that has to include add-on regulations in all marketplaces.

“We still focus on passive safety, but also we are now focusing as much as possible on the active (Collision Prevention Assist) side. It’s only through this that we can reach a new level of safety that hasn’t been seen before," he said.