Kyle Ashdown profile picture Kyle Ashdown 5 months ago 49
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Why Do Rival Carmakers Share Platforms?

In an increasingly cut-throat automotive industry, car manufacturers have formed some unusual alliances with their competitors

Remind me later
Why Do Rival Carmakers Share Platforms? - Blog

The automotive industry is notoriously lucrative, and it didn’t get to be that way by accident. Car makers are always looking for ways to make more money, and this is precisely the reason why we see manufacturers sharing a lot of components with other brands.

Take the Mazda ND MX-5, a car that’s designed and assembled by Mazda in Japan. Then there’s the Fiat 124 Spider, a car that’s a rebodied Mazda ND MX-5 with a Fiat engine. The reason? With FCA in a bit of financial trouble, it simply couldn’t afford to design a new sports car model from the ground up, so as a result, it outsourced Mazda’s expertise.

Why Do Rival Carmakers Share Platforms? - Blog

The way this works is pretty simple: Mazda makes money on everything it sells to Fiat, while Fiat makes money on its new end product, the 124.

Another benefit for Mazda is that it allows the comparatively small automaker to increase its scale of production. This means that it can run larger factories and justify producing more components. This in turn creates the opportunity to increase its scale of production, which can increase Mazda’s profit margins.

Why Do Rival Carmakers Share Platforms? - Blog

So why doesn’t the Fiat use a Mazda engine? As it turns out, using a Fiat engine not only differentiates the 124 from the MX-5, it’s also very likely cheaper for the Italian brand; Fiat makes a lot of small Multiair four-cylinder engines anyway, so it doesn’t have to do too much re-tooling to be able to make some more for the 124.

Why Do Rival Carmakers Share Platforms? - Blog

Done properly, sharing platforms leaves both companies with a pretty good finished product. Done poorly, platform-sharing can result in an abomination. This is particularly true of the odd joint venture between Alfa Romeo and Nissan in the 1980s. The finished product, the Arna (above), took Nissan’s characteristically nondescript styling and matched it up with Alfa Romeo’s notoriously poor engineering.

Although uneasy alliances have allowed for some of the world’s greatest cars to be made, the business blunder between Alfa Romeo and Nissan resulted in one of the worst vehicles of all time.

#ecarnomics