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Global Viewpoints
Common platforms
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The trend toward common manufacturing platforms will hasten globalization of the automotive industry, and suppliers will need to adapt and work with the world's major vehicle manufacturers-and even produce vehicles themselves. That was the message from Roger Cockroft, Automotive Consultant with professional services organization PricewaterhouseCoopers at "Common Platforms-Opportunity or Threat," a UK seminar. Cockroft said that if suppliers get locked out of new "super-contracts," their business could be at risk: "It is not simply about quality, cost, and delivery any more. Suppliers must demonstrate and achieve the expectations that they create through the selling process. Those that don't will simply lose their business."
Since the mid-1990s, there has been a significant shift towards platform sharing. The Volkswagen Group is a notable proponent of the philosophy. Cockroft said that with high research and development costs and traditionally narrow profit margins, vehicle manufacturers are using common platforms, which offer cost-effective interchange of vehicle manufacture on the same production line, and spread development and other fixed costs across high volumes. Four of the world's "big six" manufacturers already use platforms capable of producing more than a million units per annum. PricewaterhouseCoopers predicts that eventually, just 16 platforms will account for more than a third of the world's total vehicle production.
Cockroft believes that by 2005, the automotive industry will bear little resemblance to its current state: "As developing global markets emerge in places such as South America, common platforms offer economies of scale too massive to pass up. Component manufacturers need to recognize this fact and fight to be part of the future of vehicle manufacturing now." He believes there is potentially a large market share for Tier 1 component suppliers-"but only for a few, and on a global basis." He added that the suppliers that forge deals with the "big six" will become increasingly involved in the assembly of vehicles, while smaller Tier 2 suppliers will focus on the provision of parts. Divorcing themselves from production, manufacturers will take on greater roles in the distribution, marketing, and branding of vehicles, while dealerships will focus on aftermarket service.
Stuart Birch
AEI September 2000
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