Chinese automakers are turning up the heat — and legacy car companies are responding by cutting complexity.
Across the industry, auto executives are searching for ways to build vehicles more cheaply as lower-cost Chinese rivals expand into global markets.
Their emerging strategy has one thing in common: decluttering.
Automakers are pruning overlapping models, building vehicles with fewer parts, sharing more technology and production costs with partners, and rethinking how vehicles move from the design studio to the assembly line.
The goal is to lower expenses as legacy car companies simultaneously absorb billions of dollars in EV-related losses, navigate tariffs, and compete with Chinese automakers that can often build vehicles more cheaply.
“A lot of automakers are taking a long, hard look at their lineups,” Sam Abuelsamid, the vice president of market research at Telemetry, said. “The more different vehicles you have, that adds manufacturing, marketing, and engineering complexity. You’ve got a lot of different variations of parts to stock in plants. That all adds up.”
Execs are speaking out
Volkswagen is offering perhaps the clearest acknowledgment of the problem.
“We have to tackle the complexity,” Volkswagen chief financial officer Arno Antlitz said in a Friday interview on CNBC. “On the customer side, we have too many models.”
Volkswagen Group, the world’s second-largest car company by sales, plans to reduce its global model lineup by as much as 50% by 2030. It also wants to cut product complexity — including the number of variants and powertrain options it offers — by as much as 75%.
That comes as VW is facing a year of decline. On Friday, it updated its sales forecast, saying it now expects 2026 deliveries to slip by 3% to 7%.
Kenta Kon, the new CEO of Toyota, the world’s biggest automaker, has also raised concerns about manufacturing complexity.
“If you go to a development division, you see issues such as an increasing number of different specifications and variants being created, which in turn is driving up costs,” he told Automotive News. “If there are areas within those activities that aren’t truly value-adding work, or where work isn’t being done efficiently, then we need to take a closer look at them.”
Some cars go bye-bye…
Automakers have spent years creating slightly different vehicles to pursue ever-narrower market segments, Abuelsamid said.
Recent product decisions offer hints of how the industry’s decluttering could play out.
Abuelsamid pointed to Ford’s decision to discontinue the Escape while retaining the similarly sized Bronco Sport. The two SUVs have different styling and target somewhat different buyers, he said, but they also overlap enough to “cannibalize” each other’s sales.
The same goes for Chrysler’s decision to ax the Voyager for 2027 — the company is keeping the higher-priced, nearly identical Pacifica minivan.
And some get simpler…
Companies are trying to figure out how to build their remaining vehicles with fewer parts, Seth Goldstein, an equity strategist at Morningstar who follows the auto industry, told Business Insider.
They have some positive examples.
“I think automakers are likely copying Tesla and BYD,” Goldstein said. “These companies are selling a lot of cars on the same platform, and they’re very profitable. The legacy makers are asking, ‘How can we take some of their lessons and simplify the number of parts we need on an assembly line?'”
Ford’s Universal EV platform is one attempt. The company plans to launch a roughly $30,000 midsize electric pickup in 2027, followed by a family of vehicles built from the same underlying architecture. Ford says the new system requires fewer parts and manufacturing steps than its traditional production process.
Ford is not alone. Stellantis and Nissan are developing more modular vehicle systems designed to share components across multiple products. Rivian says its new R2 platform also costs substantially less to build than its original R1 vehicles.
Shared components do not necessarily mean identical vehicles: The same architecture can support sedans, SUVs, and pickups with different designs.
Still, there is an obvious risk to the whole industry: The great automotive decluttering could make already-similar lineups even more boring.
But the payoff, Goldstein said, would be cars that cost less to build — and, potentially, less to buy.
“If automakers can offer a more affordable vehicle while getting their costs down to be able to do so profitably,” he said, “I think that’s still in high demand from consumers.”
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