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.