80% automakers face launch delay due to late-stage engineering changes

Changes should drop To fewer than 15% in pre-production, 8 % or less in production post-launch

New launches by Indian automakers are delayed because of “late-stage engineering changes”, a problem that could affect the country’s international competitiveness, said a study by a management consultancy on Friday.

 

As many as 80 per cent of original equipment manufacturers (OEM) have reported “disruptions”, according to Vector Consulting Group. “The delay is high in India, and even higher in the case of electric vehicles. If our product development is slow, there is a chance that India will lag behind the world. China is developing its products in 18-24 months, while we are still around 36-60 months. This is because of so many changes happening at the OEM end, not because of the suppliers," said Ravindra Patki, managing partner at Vector. 

“Late-stage design changes are disrupting launches, reducing supplier capacity, and impacting India’s competitiveness in the global automotive market,” he said.

 

The study said that contrary to popular belief, engineering changes do not end after the initial prototype of a vehicle is built and validated. Ideally, changes should drop to fewer than 15 per cent in pre-production, 8 per cent or less in production post-launch, and under 3 per cent after product stabilisation. However, changes remain high well into later phases of the development cycle. Only 6 per cent OEMs follow this ideal trajectory; 13 per cent exhibit moderate deviation, and 81 per cent display “considerable misalignment from this pattern”. Each change can trigger rework in design, tooling, repeated validations, or software updates, delaying launch schedules and increasing costs.

 

The changes affect suppliers, too. Around 57 per cent of component manufacturers said that frequent late changes mean constant rework and firefighting for their teams, which have to repeatedly shuffle resources between projects. As a result, 76 per cent of respondents faced longer project lead times, 52 per cent struggled with on-time deliveries, 43 per cent experienced cost overruns, and 83 per cent were compelled to put new technology initiatives on hold.

 

“If you want the ecosystem to move forward, we will have to release the capacity to work on R&D [research and development]. We find that a significant portion of the supplier team is working behind changes. Almost 83 per cent of suppliers said that they are not ready to work on technology development due to this,” Patki said.

 

Repeated engineering changes also cause challenges for automakers in quality and costs. As many as 33 per cent of them reported challenges in product quality and reliability after a vehicle’s launch, 20 per cent cited increased warranty costs, and 58 per cent highlighted delays in service and dealer network launch readiness. Most of these issues get corrected only after the launch of a product through the joint effort of suppliers and automakers.

 

Vector questioned 36 chief experience officers of two-wheeler, passenger vehicle, light commercial vehicle, and heavy commercial vehicle OEMs for the survey. It also took inputs from Tier-1 suppliers. The study identified three major causes for late engineering changes: missing or delayed manufacturing engineering inputs in early stages (60 per cent of respondents), delayed supplier feedback (47 per cent), and unstable design freezes (13 per cent).

 

“The study shows that the challenge is not about technology or vision, but execution, which is good news, as it can be corrected with a change in the way new product developments are handled," said Patki.

 

Vector recommended that OEMs shift from a milestone-driven tracking to a flow-based execution model. Earlier involvement of suppliers and other stakeholders during the vehicle concept stage, setting work-in-progress limits, and “structured triage” of engineering changes to separate critical fixes from non-essential modifications were its other suggestions.

 

Adopting these practices could result in 20-30 per cent fewer late engineering changes and time taken for launch to reduce by 30-50 per cent, it said.