Press clippings

German carmakers are outsourcing engineering work

Deutsche Autobauer lagern Ingenieursdienstleistungen aus

Handelsblatt, the German financial daily, reports on a Roland Berger study on how carmakers are outsourcing engineering work. The Roland Berger study entitled "Engineering Services Outsourcing" shows that the volume of R&D work that automotive OEMs are outsourcing to external service providers will increase by 4-5% by 2013. Attractive outsourcing locations are especially emerging countries that have highly qualified workers but low wages. Such countries generally have engineers who are experts in designing low-cost cars. Up to 35% in internal costs can be cut by outsourcing engineering work. Furthermore, OEMs are able to tap new skills and improve their flexibility. Norbert Dressler, Partner in Roland Berger's Automotive Competence Center, feels that future electric engines are especially ideal for outsourcing: "It's definitely worthwhile looking into outsourcing the skills for electric and hybrid drivetrains to low-cost countries." What's important is clearly defining the core competencies and then outsourcing selected areas. Over the past few months, many OEMS have internalized R&D competences to keep their own people busy. "However, in the future, they will need external engineering competencies and resources to handle the rising number of models and variations and to deal with complex new technologies," says Wolfgang Bernhart, Partner in Roland Berger's Automotive Competence Center.

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