Case study

smart gmbh

The smart forfour car: supporting product cost optimisation to deliver savings

Car maker smart develops vehicles which combine innovation, functionality and driving fun, and the smart forfour is another example that follows the vision of this innovative producer: ensuring competitiveness by combining the creativity and expertise of its business partners. However, estimated production costs grew beyond target due to additional functionalities, features and market demands as well as technical requirements during the development and planning phase, and this made it necessary to revise the plan.

The product cost optimisation project for the smart forfour - 'Z-TARGET' - started in 2002 with development and construction based on previous cost cutting projects. The aim was to determine potential cost savings, document them for the management and realise them jointly with the supplier. PA was asked by smart to support the Z-TARGET cost optimisation project in six areas: electrical controls, air filters, front and rear axles, fuel, exhaust and cooling systems. PA was asked to identify cost saving potential to compensate for cost increases, and to implement these savings jointly with the supplier.

The project resulted in cost savings of millions of Euros in each of the six areas selected for optimisation. In addition the increased cost transparency enables leverage for further change and optimisation during the production lifecycle.

Overall, PA has identified potential cost savings in the global automotive industry since 2000 totalling more than 400 million Euros.