How Outsourcing Can Future-Proof Legacy Engine Assembly
Emissions regulations, Total Cost of Ownership (TCO) and efficiency are just a few of the factors driving the shift to electrification in the off-highway and marine industries. The latest research predicts that the electric construction and mining market will grow by a CAGR of 24.4% in 2025, with electric and hybrid marine set for a CAGR of 16.4% [1]. By 2035, hybrid and electric powertrains could become the norm across off-highway and marine vehicles [2].
Until then though, OEMs still need to supply their customers with internal combustion and diesel engines to power the existing fleet of vehicles. However, new emissions standards are increasing the complexity of these engines, requiring OEMs to invest in updated production lines and processes to deliver a wider variety of engine variants. Yet, as the market transitions to more sustainable alternatives, traditional engine volumes are set to decline, so resources need to be spent on developing manufacturing facilities that cater for future technologies instead.
So how can OEMs continue to deliver legacy engines for their customers whilst responding to future production demands? We spoke to Peter Trueman, Market Head for Off-Highway and Marine, to find out.
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A growing portfolio of engine models
Forty years ago, the technologies within an off-highway diesel engine were relatively conventional and typically required only a few minor modifications throughout its life cycle. Consequently, a single engine design could satisfy market requirements for over thirty years.
Now, evolving emissions regulations have triggered manufacturers to develop a wider range of engine models, consisting of more complex technologies that need to be updated more frequently. This has drastically shortened the production life of traditional combustion powered engines to around 3 years with some form of major revision to the base model.
‘Alongside emissions standards, there are also noise levels that engines must now comply with,’ explains Peter Trueman, Market Head of Off-Highway and Marine at Ricardo. ‘OEMs have not only had to integrate more components but also optimise electronic controls as well as improve fuel and exhaust after treatment systems. Achieving this requires fundamental design changes such as modifying the shape of the combustion chamber and refining the timing and profile of the camshafts.’
‘There’s no such thing as a simple off-highway diesel engine anymore because they simply don’t meet the latest regulations,’ continues Trueman. ‘In the past, an OEM may have had three or four engines covering a broad range of power nodes. Whereas now, an OEM needs to offer several different capacities within each power node, for a range of emissions tier levels, resulting in a product range that can exceed a dozen models or more over quite a narrow power band.’
The challenges of managing niche production volumes
Manufacturers are now faced with the challenge of developing larger portfolios of more complicated engines that will soon be superseded with future technologies, whilst also managing niche production volumes. Off-highway and marine engines are typically produced in the hundreds or low thousands, while automotive engines for example, can reach production volumes in the hundreds of thousands. Smaller production volumes require a similar amount of investment to manufacture, but don’t reap the same benefits of scale as larger production volumes. This can result in high unit costs, limited purchasing power and an overall inefficient supply chain for OEMs.
Furthermore, engine orders can be sporadic as many markets find it difficult to specify the number of engines they require in advance to match market demands, particularly when the majority of orders are replacement engines. Consequently, manufacturers must predict how many engines they will produce in a year so they can source the necessary parts and establish the required assembly lines. However, if they fall short once the orders come in, it is extremely difficult to increase production capacity, leaving their customers with fewer units than they want.
‘This represents a massive loss of revenue for OEMs,’ says Trueman. ‘Consider an OEM that has the capacity to produce 90,000 units a year, but they have an order book of 120,000 - that’s 30,000 of lost unit sales per year, equating to millions of pounds. It is not cost-effective to invest in new facilities to accommodate these orders with the imminent arrival of hybrid, electric and hydrogen powerplants, so they just have to take this hit. Of course, it’s not just the loss of revenue that the OEM suffers, but also their brand reputation and market share too.’
‘Many OEMs are finding that outsourcing engine assembly for older models to a contract manufacturer like Ricardo that specialises in producing combustion engines in niche volumes,’ adds Trueman.
‘We have the expertise and flexibility to set up small production lines quickly and fulfil gaps in orders, enabling OEMs to make a profit, protect relationships with customers and focus their resources on preparing for the switch to more sustainable engines.’
Ricardo's flexible engine assembly approach
Ricardo has manufactured engines for over 100 years for a range of applications, from high performance supercars to heavy-duty military vehicles. Throughout this period, we have become experts in establishing flexible and stable product assembly lines capable of manufacturing both standard and bespoke engines to the highest OEM quality standards.
‘Despite the sophistication of the latest off-highway and marine combustion units, the fundamental building blocks, and therefore the general manufacturing processes, remains the same,’ highlights Trueman. ‘For example, torquing down 32 bolts to 300Nm on a 200kg cylinder head uses the same process as torquing down 8 bolts to 40Nm on a 10kg cylinder head. The layout of the assembly area and the skills of the person are the same, it’s just the specification that is different.’
Ricardo’s engine assembly capability is flexible to requirement and can range from low-volume bay builds which are hand-assembled by expert technicians, to a multi-stage semi-automated assembly line approach to support higher end niche volumes.
Our typical assembly line approach consists of several stations, each equipped with a technician and an advanced Human Machine Interface (HMI). At the first station, the barcode of the engine block is scanned, along with the build book which automatically configures the stations to the requirements of that specific engine variant. So, when the engine arrives at each station, the HMI screen guides the technician through the necessary sequence of processes and tools required for that particular block.
In this way, Ricardo can manufacture a variety of different engines on the same line. This agility alongside a supporting cast of departments allows Ricardo to deliver an end-to-end niche volume manufacturing solution, regardless of the type of engine.
‘We have a global network of world-class engineers and hands-on manufacturing experts working across a range of departments from supply chain management to R&D,’ says Trueman. ‘So, we can simply slot in as the engine manufacturer or take care of the entire production process.’
‘We can work with existing supply chains or establish new ones, optimise design or production processes and conduct full dynamic testing to ensure end of line quality meets PPAP standards,’ adds Trueman. ‘It’s this holistic approach that gives customers confidence in our manufacturing capabilities.’
A legacy of engine manufacturing excellence
‘One of the key benefits of working with Ricardo on your engine assembly programme is the diverse range of market sectors that we operate in – each with their own unique set of challenges to navigate. A good demonstration of these abilities is the collaboration with McLaren Automotive. Since 2011, Ricardo have manufactured over 38,000 powertrains at its Shoreham-by-Sea facility. While at the other end of the spectrum, in 2010, Ricardo was tasked by the Ministry of Defence to deliver 375 Foxhound Light Protected Patrol Vehicles within 2 years to support troops in Afghanistan.
‘Whether it’s the latest supercar or military vehicle, both demand high performance manufacturing capability to ensure a high quality finished product,’ concludes Trueman. ‘Supercars need to achieve impressive speed and power, whilst meeting brand reputation. While mission critical military or off-highway vehicles must be robust and reliable.’
‘It is the combination of Ricardo’s quality manufacturing facilities and versatile approach that allows us to support our clients’ niche volume series production programmes helping them to navigate anything from variable volumes to highly demanding SOP lead times.’
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References
[1] M.T., 2025. What to Expect From Electric Vehicle Markets in 2025 and Beyond [Online]. IDTechEx.
