Motor City Detroit once again behind the stee­ring wheel?! –

Mobi­li­ty firms in search for pro­duc­tion sites seem to land at an all-time clas­sic of the auto­mo­ti­ve indus­try

Alphabet’s Way­mo announ­ced to mass pro­du­ce self-dri­ving vehi­cles in Detroit, Michi­gan by end of 2019. This deci­si­on was made end of April, but expec­ted sin­ce qui­te some time.

Way­mo takes ano­t­her important step into the field of auto­mo­ti­ve manu­fac­tu­ring (alt­hough rely­ing on extern­al­ly pro­du­ced cars) and expands its capa­bi­li­ties from self-dri­ving tech­no­lo­gy to retro­fit­ting their sen­sors and com­pu­ta­ti­on power.
Detroit, Michi­gan is an inte­res­ting choice – given the regi­ons his­to­ric down­turn from 296.000 manu­fac­tu­ring jobs in 1950 to around 20.000 in 2015 – it has a ‘back to the rou­tes’ of manu­fac­tu­ring cha­rac­ter.

Way­mo is plan­ning to open its manu­fac­tu­ring plant mid 2019 and is the­re­fo­re part­ne­ring up with Ame­ri­can Axle & Manu­fac­tu­ring to repur­po­se an alre­ady exis­ting faci­li­ty which was used as a sequen­cing cent­re for a local parts sup­plier in ear­lier years.

The pur­po­se of the plant is to equip all-elec­tric Chrys­ler Paci­fi­ca Hybrid mini­vans and Jagu­ar I-PACE vehi­cles with Waymo’s self-dri­ving sys­tem, inclu­ding hard­ware and soft­ware com­pon­ents, to expand the exis­ting fleet (main­ly Chrys­ler Paci­fi­ca Hybrid vehi­cles equip­ped with auto­no­mous dri­ving tech­no­lo­gy) to enab­le a ride-hai­ling ser­vice at sca­le.

Try­ing to off­set a poten­ti­al short­co­m­ing in manu­fac­tu­ring expe­ri­ence, Way­mo part­ners with Magna, one of the world’s lar­gest Tier 1 sup­pliers manu­fac­tu­ring cars also for other auto­ma­kers who is cur­r­ent­ly also buil­ding the Jagu­ar I-PACE at its fac­to­ry in Graz, Aus­tria. Fur­ther­mo­re, Way­mo claims to draw from Detroit’s histo­ry and exper­ti­se in the field of car manu­fac­tu­ring, pro­cess sequen­cing and sup­ply chain manage­ment.

In fact, Way­mo seems to join a lar­ger trend of revi­ta­li­zing the Detroit regi­on: Fiat Chrys­ler, GM and Ford Motor also announ­ced lar­ge-sca­le invest­ments in manu­fac­tu­ring fac­to­ries in Michi­gan, main­ly to build auto­no­mous vehi­cles.

In a recent US mar­ket ent­ry stu­dy for a lar­ge ser­vice sup­plier in the auto­mo­ti­ve indus­try, our experts reached a simi­lar con­clu­si­on:

While our cli­ent was loo­king for a con­fir­ma­ti­on that he needs to go to Sili­con Val­ley as this is whe­re the big deals hap­pen, our ana­ly­ses have shown that in fact Detroit is the eco­no­mic more via­ble opti­on. Labour costs are signi­fi­cant­ly lower while at the same time, clus­ter effects are increa­sing starkly. As one of our seni­or experts phra­sed it: In Sili­con Val­ley it’s all fan­cy offices and bean bags – once a play­er in the mobi­li­ty field gets serious about mass pro­duc­tion and is ready for the real deal, they move some­whe­re else, and appar­ent­ly Detroit is among their first opti­ons.

Refe­ren­ces:

Way­mo picks Detroit fac­to­ry to build self-dri­ving cars

https://www.reuters.com/article/us-waymo-selfdriving/waymo-picks-detroit-factory-for-self-driving-fleet-to-be-operational-by-mid-2019-idUSKCN1RZ1IZ

https://qz.com/1602812/waymo-is-building-a-self-driving-car-factory-in-detroit/

https://cleantechnica.com/2019/01/23/waymo-magna-will-produce-self-driving-vehicles-at-michigan-factory/

Why Chi­ca­go is not Detroit

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Rainer Hoffmann

Seni­or Part­ner

rainer.hoffmann@huz.de

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Andreas Gabriels

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Benjamin Scher

Stra­te­gy &
Inno­va­ti­on Con­sul­tant

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