Carmakers are sharing platforms and forging alliances to save cost, but will it be at the expense of each brand’s identity and product distinctiveness?
Volkswagen’s platform strategy did not result in a multimarque fleet of homogenous cars.
WHEN the Volkswagen Group revealed to the world its platform rationalisation strategy some 20 years ago, its competitors sniggered. They said consumers will eventually be bored with products across several brands that are based on only a handful of platforms. Well, Volkswagen is now one of the most successful automotive groups in the world, behind only Toyota in terms of sales. In fact, in the first half of this year, it pipped the Japanese giant to become numero uno.
Are consumers oblivious to the fact? Do they even care? Are they no longer as discerning as before? Truth is, VW’s platform strategy did not result in a multi-marque fleet of homogenous cars. A Volkswagen Passat did not feel like an Audi A4, a Lamborghini Gallardo did not drive like an Audi R8, nor did a Bentley Continental come across like a VW Phaeton or Audi A8. Volkswagen was clearly able to build some distinctiveness into each of its cars. Now, most other major manufacturers have followed in the VW Group’s footsteps, but they are going beyond sharing platforms and engines within their own companies. They are forming alliances with other brands, and on an unprecedented scale
Everything from engines to floorpans can be codeveloped and shared within a conglomerate or between friendly rival automakers.
Mercedes-Benz has spun a whole range of models based on its A-Class. They include the B-Class, CLA, CLA Shooting Brake and GLA. The Stuttgartheadquartered group has also struck a cooperation deal with Renault-Nissan to make a whole range of vehicles and share a whole selection of engines. Already, we have seen the Infiniti Q50, which uses Merc C-Class components. The recently unveiled Q30 is based on the A-Class. More “twins” will come, fast and furiously.
Like Mercedes, BMW has formed alliances with other makers, including one with Toyota. It will supply the latter organisation with turbo-diesel engines, while the Japanese giant will provide petrol-electric hybrid technology to the Bavarian company. Before this, engines from the BMW Group’s MINI division were shared with the PSA Peugeot Citroen group. The most startling product of the Toyota-BMW alliance was revealed recently – a super-sexy Toyota Supra with BMW bits. These bits might make their way to the next BMW Z4.
In the 1990s, Honda hooked up with Britain’s Rover to shore up its falling profits back home. The partnership would allow Honda instant access to the sizeable UK market. After a series of Hondabased Rovers, the partnership looked rosy and cosy. It was followed by Honda supplying Rover with engines. The cosy relationship became unhinged when a third party showed up: BMW. After the German firm acquired Rover, Honda left. Industry observers have pointed out that Honda’s sudden reversal of fortunes precipitated from it losing Rover to BMW. From a manufacturer that consistently produced bestsellers like the Civic and Accord, its products began to lose lustre after the 1990s.
Toyota in turn has just struck a deal with Mazda, which in turn cooperated with Fiat-Chrysler, which in turn is looking for a full-fledged merger, possibly with General Motors. GM has teamed up with Ford to make a new generation of transmissions. And, of course, there are shared components and platforms arising from mergers and acquisitions. Renault-Nissan is a prime example. The duo has come up with a modular architecture that can give rise to a wide variety of models. Jaguar and Land Rover, known as Jaguar-Land Rover since Tata acquired them in 2008, have also been sharing drivetrains, as well as a number of components seen and unseen by the driver. Now, one might ask: “So what?” If the Volkswagen Group has been successful in its platform strategy, so should all the others. Well, theoretically, they should. But reality can sometimes turn out quite diff erently.
For instance, the Toyota-BMW collaboration might be more advantageous to Toyota than to BMW. Most people will find a Toyota fitted with a BMW engine more appealing than a BMW hybrid built with Toyota know-how. Which is partly why the outrageous new Supra in the works is making such huge waves, well before it is slated for production. People are wowed by the fact that the sports car will have some BMW inputs. If there are pitfalls in cross-brand alliances, the story of Honda and Rover off ers a perfect illustration (see box story). Companies that are too dependent on third-party alliance for success may well face the same rude shock as Honda. The other danger is, of course, a loss of distinctiveness.
The fact that VW was able to engineer distinctiveness into its products is no guarantee every car company is able to do the same – especially when parties in an alliance are not part of the same corporate family. Diff erent dynamics are at play today, too. There are drastically more products today than 20 years ago. Mercedes-Benz has gone from having a three- to fourmodel lineup to a selection of more than a dozen. Market sub-segments have proliferated, with coupecrossovers, fastbacks, and cars like BMW’s 5 GT and 3 GT, which defy definition. There are full-size sports utility vehicles, mid-size SUVs and compact SUVs. And then there are SUVs with seven seats, which makes them a little like MPVs.
Every luxury brand is going into SUVs, including Bentley, Rolls- Royce, Maserati and Lamborghini – inspired, no doubt, by Porsche’s runaway hit in the Cayenne. But, as mentioned, commercial success may not be replicated. And, once again, there is that threat to distinctiveness. It will be interesting to see how diff erent (or not) Jaguar’s upcoming F-Pace crossover is from the Range Rover Evoque on the road. Already, we sense that the Porsche Macan is quite similar to the Audi Q5, which it is based on. Strangely, the Cayenne never felt like the Q7 or the VW Touareg. So is this the beginning of the end of distinctiveness? If so, it might just be time for the dawn of the autonomous and anonymous car.