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Platform sharing lets automakers shave costs on different models
Thursday, April 27, 2006

The Volvo S40, the Mazda3 and the European Ford Focus are three vastly different cars with unique styling and personality.

Stacy Innerst, Post-Gazette
Click illustration for larger image.
The S40 is a Swedish flavored compact with strong handling and a decidedly upscale ambience. The Mazda3 is a muscular looking, performance compact that is consistently ranked at the top of its class by auto writers. The European version of the Focus has the size, styling and driving characteristics that Germans and Britons love.

But look deeper and the cars aren't that different after all. All three spring from the same platform -- the basic underlying structure and foundation from which cars are built.

Ford, which controls Volvo and Mazda, uses the same platform on the three makes but each company installed suspensions, engines and other components that reflected their market, heritage and focus.

Although platform sharing has been around for decades, "It's really become a lot more prevalent in the past 10 years or so because just about every car company has become a full-range company, meaning they have portfolios with everything from small cars to luxury sedans and SUVs in them," said Gabe Shenhar, Consumer Reports' senior auto test engineer and special publications program manager.

As an example, 10 years ago, Mr. Shenhar said, Mercedes-Benz had only compact, midsize and large sedans. "Now they have sports cars, coupes, SUVs and everything in between. You can't survive as a small car company these days unless you're a global player, and to do that, you have to be a full-range car company."

Sharing platforms allows companies to compete across a broad range of vehicles while saving money and getting cars and trucks to market much sooner.

"If you are talking about developing a new platform from the ground up, platform sharing probably saves tens or hundreds of millions of dollars. And it probably saves at least two or three years off the design process," said Kelley Blue Book's Jack Nerad.

But there's a potential downside to platform sharing. Some car makes are so much alike that it's hard to persuade consumers to choose one make over another.

"That's the biggest mistake -- building vehicles that just don't feel different enough, yet command a price premium between them," Mr. Shenhar said. "Some people see a Honda Accord and an Acura TL and they think, 'Hey, OK, there are some differences between these two. But is it worth the price premium of thousands of dollars?' "

The temptation is to "merely rebadge the vehicle and leave the sheet metal virtually unchanged," said Tom Libby, senior director of industry analysis for the Power Information Network of J.D. Power and Associates.

Another mistake that car companies can make when sharing platforms is to completely dilute the heritage and flavor of a car line -- a practice that enrages a devout group of purists who have become devoted to a car line.

A good example of that is Saab, which was taken over by General Motors.

"It's hard to say whether it's GM's fault or Saab's, but that was a car company that had quirky, distinct Swedish personality, and then somewhere in the '90s, GM started to base every Saab design on a relatively mundane Opel chassis. It lost some of it's flavor," Mr. Shenhar said. "You have the Saab 9-2x, based on a Subaru, and a Saab 9-7x based on the Chevy TrailBlazer. Both of these two are basically what they appear to be. You can't fool consumers and customers."

The problem in Saab's case, however, he added, "is that I don't know if Saab itself would have had a viable future anyway as a small independent company if GM had not come along."

"Car companies have to adjust and change, and I don't know if Saab itself had the resources to do that," Mr. Shenhar said.

Mr. Nerad said some people "have questioned the essential Saabness of the 9-7x SUV."

"But if I were faced with the same business parameters," he added, "I think I would have made the same decision. How do you get an SUV to the market quickly that's decently representative? They started with a pretty good platform in the Chevy TrailBlazer/GMC Envoy/Buick Ranier one. I don't think their customers or their dealers would say that was a bad move.

"I think GM gets knocked on this, but I don't know that it's a fair knock," he said. "I think they do a pretty good job of differentiating their cars now even though they share platforms. There was a time you could knock them on this. There was once a magazine cover about badge engineering that showed Olds, Pontiac and Buick all looking a lot alike. But it's not nearly as prevalent today at GM."

In fact, the platform sharing process can be done well, with experts pointing to Toyota and Nissan as leaders in the field.

"Nissan and Toyota do a very good job in platform sharing. Toyota has the Camry, the Avalon, the Sienna, the RX series SUVs and the Highlander coming off the basic Camry platform -- and each and everyone of them is a distinct product," Mr. Shenhar said.

"Look at the Toyota Camry and the Lexus ES 350. They share platforms and architecture, but they are differentiated. They aren't cross-shopped, and people don't picture them as the same," Mr. Nerad said.

Mazda's new CX-7, say auto industry observers, is another good example of platform sharing. It has parts and components from Ford Edge, Mazda3, Mazda5 and Mazda6.

"It really all comes down to how you deliver the product to the customer," said Jeremy Barnes, manager of Mazda's product communications. "It involves how the customer interacts with the car. If the CX-7 looked, drove and handled like the Ford Edge, someone who's into Mazda's driving dynamics would say, 'Hey, this thing isn't a Mazda.'"

The key, he said, "is being true to the brand heritage and the product."

"Everything we do build has to have the soul of a sports car," Mr. Barnes added. "This is our defining DNA."

He said the Mazda3's success could be attributed partly to the way in which the partnership among Ford, Volvo and Mazda worked when that car and the Volvo S40 and the European Ford Focus were developed.

"Each of the three teams was given a certain area of expertise, and we shared those points of expertise," Mr. Barnes said. "Those who did certain things better than the others concentrated on that. Volvo was known for excellence for global safety. Ford was known for excellence bringing a large number of parts to it all at a low cost. And Mazda was excellent at building a small car affordability."

Enthusiasts who value uniqueness in their automotive fare long for a day when all cars are built on their own platform with engines and components not shared across the board. But that day won't come anytime soon.

"This is a competitive industry, and as long as one company is substantially using platform sharing and able to reduce costs and improve their margins, their competitors will be forced to follow," Mr. Libby said.

First published on April 27, 2006 at 12:00 am
Don Hammonds can be reached at dhammonds@post-gazette.com or 412-263-1538.