Volkswagen Is Leading Auto Innovation With The MQB Platform

| About: Volkswagen AG (VLKAF)
This article is now exclusive for PRO subscribers.

Volkswagen (OTCPK:VLKAF) presented last February its new platform called Modular Transverse Matrix - the German acronym is MQB - for the Volkswagen, Audi, Skoda and Seat brands. This platform will be shared by a larger number of models within the Volkswagen's group in relation to current platforms.

It's an important enhancement in automotive production representing a turning point in the design and production of future automobiles. VW expects to cut costs, production time and cars weight with the MQB platform. This platform represents a major step forward in VW's strategy to become the world's largest auto manufacturer by 2018.

Volkswagen Group Overview
The Volkswagen Group is based in Germany and is one of the world's leading automobile manufacturers and the largest in Europe. The Group is made up of ten brands: Volkswagen, Audi, SEAT, Skoda, Bentley, Bugatti, Lamborghini, VW Commercial Vehicles, Scania and MAN. Each brand has its own character and operates as an independent entity on the market. The product spectrum extends from low-consumption small cars to luxury class vehicles. It also has a stake in Porsche AG (OTCPK:POAHF), which is expected to fully integrate the VW Group in the short-term.

The strategic plan of the company called "Strategy 2018" aims to make the VW Group worldwide leader in 2018. Over the long term, VW aims to increase unit sales to more than 10 million vehicles a year and intends to increase its return on sales before tax to at least 8%. To achieve these goals, the MQB platform will play an important role.

MQB Platform

Usually, each automobile platform is designed specifically for a market segment and shared between cars of similar size. A typical mass-market VW platform spans not just several model variants, but in fact underpins a variety of models sold under different brands. VW is now creating shared modular platforms to serve the needs of its different subsidiaries. The MQB platform is the most recent and will be used for mass-market models with front-wheel-drive cars, for which the engines are transversely mounted.

The modular part of its name refers to its versatility in size and type configurations. With the MQB platform the only dimension that is fixed is the distance from the front axle to the firewall. Front and rear overhangs, wheelbase, width, and track all can shrink and grow.

The MQB will spawn an unprecedented number of models of various sizes covering the VW Group's four biggest brands. At the Volkswagen brand, for example, it covers the following models: Polo, Beetle, Golf, Scirocco, Jetta, Tiguan, Touran, Sharan, Passat, and VW CC.

In the future, all of these models could theoretically be produced on the same assembly line and even will be possible to produce MQB models of different brands together. The first new vehicles to be produced based on the MQB will be the successor to the Audi A3 and the next generation Golf.

By creating a standardized, interchangeable set of parts from which to build a variety of cars, VW plans to cut the time taken to build a car by 30%. On average, cars will weigh 40kg lighter than today's equivalents.

One of the prominent characteristics of the MQB is the uniform position of all engines designed to accommodate two new four cylinder engine family series. Petrol power will come from the EA211 series rated from 60hp to 150hp, whilst diesel power will be supplied by the EA288 engine series putting out between 90hp and 190hp. The new engines will reduce the Group's engine and gearbox variants in the MQB system by 90% and the MQB also enables an identical mounting position for all current alternative drive concepts from natural gas and hybrid versions to the pure electric drive.

The company has already rolled out the MLB platform for niche segments, which is used exclusively in Audi's top of the range models. The German acronym translates to modular longitudinal matrix, with longitudinal referring to the engine orientation. It's already in use on the Audi A6/A7, A4/A5 and Q5 models.

VW's plans to take the platform matrix concept to all its models range. MLB is already on the market and MQB is expected to be this year, MSB (modular standard platform) will debut in the next generation of Porsche Panamera, Bentley Continental and VW Phaeton. Following that will be MSS (modular sports-car system), that will be used in sports vehicles such as Porsche Boxster and Cayman, to the 911, the Audi R8 and the Lamborghini Gallardo.


The MQB platform allows the Volkswagen group to produce worlwide high volume and niche models at extremely competitive costs over the long term. The MQB exploits synergies in key technologies and allows greater economies of scale trough the production of more models with the same platform. Since the invention of mass production by Ford (NYSE:F) in the 20's, this may be the most revolutionary step in the automobile development and production.

The modular platforms concept is a major structural advantage for VW's in the global automotive industry, allowing it to reduce costs and be more competitive on prices. By this way, it can gain market share from General Motors (NYSE:GM) and Toyota (NYSE:TM) to become the world's largest automotive manufacturer.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.