Modularity is the ability to separate a system’s components and recombine them, where each component is a module. This concept has been ingrained in children as they play with LEGO, which offers the ability to make different constructs using the same blocks. Modularity has since caught on in many industries from housing, to software engineering, to automotive.

Every mass automobile manufacturer has jumped onto the modularity bandwagon as they try to cut costs and increase profit margins. Volkswagen (VW) wanted to revolutionize the manufacturing industry by implementing their version of modularity, which is called Modularer Querbaukasten (MQB), or Modular matrix. The VW Group is a prime candidate to employ modularity because it owns sixteen brands, providing tremendous potential for its different brands to share a lot of parts. This would lead to ordering parts in millions rather than in hundreds of thousands, resulting in a reduced cost per part.

However, recent events have shown that modularity is a double-edged sword that could help save millions, but could also lose millions (or even billions) as in VW’s case. Earlier recalls where modularity was not employed would often address tens of thousands of vehicles, but in VW’s emission scandal case, the EA189 engine found its way into 11 million cars spread across VW Beetles to Audi A3s. VW has set aside billions to address the faulty vehicles, which could set back its plans of beating Toyota to the coveted position of the largest automotive manufacturer in the world by a few years, possibly even a decade.

The infotainment industry has begun to utilize modularity as well, and Tier I giants are increasingly implementing it in their infotainment units. Tier I companies and original equipment manufacturers (OEMs) have developed scalable platforms that enable the creation of both basic and high-end infotainment units on a single scalable platform. Similar to VW’s case, Fiat Chrysler Automobile’s  (FCA’s) Uconnect infotainment system hacking incident has led to a recall of 1.4 million cars. While this may pale in comparison to the 11 million affected VW cars, it is still a sizeable number for the infotainment industry. The culprit is an 8.4 inch touchscreen Uconnect system that was jointly developed by FCA and Harman on a scalable platform.

Harman, one of the leading Tier I infotainment suppliers, has developed the next generation of scalable infotainment platforms for VW known as MIB II. These infotainment units are being installed across all VW’s brands, from Skodas to Porsches.. Modularity has changed the recall landscape, as affected cars could be in the millions rather than thousands. While some software problems can be mitigated with over-the-air updates, this is not possible with hardware-based recalls.

Modularity has tremendous potential to not only save costs, but to make manufacturing more efficient. However, recalls threaten to wipe out any savings made. To find out more about who supplies whom in the infotainment industry and which Tier I companies are jumping onto the modularity bandwagon, check out my latest study HERE that benchmarks and profiles major Tier Is.

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