Why US and European Carmakers Must Double Design Speed
In a rapidly-evolving automotive landscape, US and European car manufacturers are facing increasing pressure to accelerate their product development timelines. According to CoLab, a leading technology company specialising in collaborative design review and AI solutions, Chinese carmakers are outpacing their Western counterparts at an unprecedented rate.
Data from the European Automobile Manufacturers Association (ACEA) highlights a stagnant production trend among European automakers, with output decreasing slightly from 18.3 million in 2010 to 18 million in 2023—a 1.5% decline. The UK was hit even harder, experiencing a drop of up to 12%.
Meanwhile, figures from the International Organization of Motor Vehicle Manufacturers (OICA) reveal that Chinese automakers have surged ahead, increasing production by an astonishing 105%, from 13.9 million to 28.5 million units over the same period.
Chinese advantage: Speed, supply chains and government support
Chinese automakers benefit from fewer regulatory barriers, in-house capabilities and substantial government-backed supply chain support. These factors allow them to develop new vehicle designs at a significantly faster pace. European and US carmakers like Volkswagen and Renault typically operate on 200–216-week product development cycles. By contrast, Chinese competitors like NIO complete the process in just 120 weeks—nearly half the time.
With additional challenges, such as tariffs on goods from China and the US and potential tariffs on Canada and Mexico, focus on building supply chain resilience and optimising design processes is paramount.
Stephen Gibson, Head of Product Development at Autoneum, explains: "China controls critical resources for EV components.
"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."
Engineering-led supplier co-design: The key to speed
One way to achieve greater speed and agility is to optimise the request for quote (RFQ) process and introduce co-design methodologies early in development.
Adam Keating, Co-Founder and CEO of CoLab, states: "Engineering-led supplier co-design is an easy way to build supply chain resilience.
"Today, OEMs send out an RFQ, wait for a response and only share product data with preferred partners once the design is finished. Instead, OEMs can bring suppliers into the design process while the CAD is still evolving.
"Leveraging modern digital tools like CoLab Portals, engineers and suppliers can conduct collaborative tech reviews during RFQs, eliminating administrative delays. This allows them to design together in parallel and adapt to changes in real time. The companies that adopt this approach see 30-50% faster lead times, twice as fast design cycles and up to a 50% reduction in BOM costs."
Adam highlights that the shift benefits both OEMs and suppliers: "Now, the OEM wins because they benefit from a smoother, faster design process. Suppliers win because they gain a competitive advantage in future RFQs. And both win by collaborating rather than reacting."
The EV race: A battle of speed and innovation
Despite a slowdown in sales and production in 2024—due to reductions in subsidies and strategic planning around stricter emissions regulations—Europe is set to launch 160 new EV models in 2025.
However, to compete with Chinese models, the vehicles must be both price-competitive and meet or exceed consumer expectations.
"The EV race has been going on for nearly five years, which means companies going to market with models now are already very late," Adam continues. "Success will hinge on the ability to be nimble, on simple platforms and the strength of the ecosystems carmakers build."
The rapid pace of innovation means that some EVs are already outdated by the time they reach the market.
Adam warns: "Product delays and missed milestones can cost millions of dollars that 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."
AI and collaborative tools: The future of automotive design
Advancements in AI and digital collaboration platforms can play a crucial role in helping US and European carmakers close the gap.
Emerging technologies like design engagement systems (DES) and enhanced computer-aided design (CAD) tools streamline the design process, automate workflows and improve collaboration. These tools can significantly accelerate innovation by creating secure, closed environments where key partners can access relevant product data in parallel with in-house teams.
DES technology has already demonstrated its potential by reducing lead times by 30%, enabling revenue realisation months ahead of schedule.
"It's a massive increase in speed. We've rolled out CoLab to our entire 200-strong converter network in Europe to accelerate design iterations and drive more innovative solutions."
By adopting new technologies and methodologies, US and European automakers can not only compete with Chinese manufacturers but also create more efficient, cost-effective and resilient supply chains, securing their place in the future of the automotive industry.
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