Platform Sharing

[Davan]

I'm not overly familiar with all the cars that share platforms, so if I make a mistake, don't be too hard on me. ;)

Anyways, I'm just curious... out of all the vehicle manufactures that have their normal lines, and then an upscale line (eg honda-acura, nissan-infinity) and have cars on each with the same platform, I am wondering how much cost difference there is between the two. For the manufacturer's, I mean...

For example:

How much does it cost a manufacturer to produce a 350Z vs a G35?

Now I'm talking the manufacturer's cost only. On parts, labour, etc...
Is the margin very big? Or hardly any different? What do you think?

[Xtrema]

Many factor goes into the cost of a car.

But by platform sharing, you minimize the number of parts needs to be re-enginneered, hence the saving.

I'll leave the hard numbers to the industry insider. But by cost cutting (and a few corner cutting), Nissan has an industry leading 11% profit margin on all products.

Example of Platform sharing:

Nissan/Infiniti:

- Altima, Maxima, Murano, Quest
- 05 Pathfinder, Frontier
- 350Z, G35/G35c, FX35/FX45
- 04 Armada, QX56

Honda/Acura:
- Civic, EL, RSX, CR-V
- Accord, TL
- Odessey, Pilot, MDX

Toyota/Lexus
- ES330, Camry, Highlander, Solara, RX330
- Corolla, Matrix, Pontiac Vibe

[three.eighteen.]

i dont think the margin is very large...especially if they can sell the cars at a roughly equivalent price (in terms of the 350z and g35) in the end you get what you pay for, if it costs more to manufacture a certain car, it will obviously be reflected in its retail price

[1badPT]

In some cases, platform sharing produces a completely different car (look at neons vs pt cruisers). Other cases, the differences have more to do with badging, trim and tuning (VW Passat vs Audi A6).

Lower costs per unit are an obvious advantage of platform sharing, but it also allows you to produce two different cars in two different markets. When markets are down, there will be a higher demand for the lower cost model on the platform and vice versa for when markets are up. Most production facilities can change lines within a few hours so a factory could be assembling Honda Civics by morning and Acura EL's by the evening.

[Davan]

Originally posted by 1badPT Other cases, the differences have more to do with badging, trim and tuning (VW Passat vs Audi A6).


This is what I'm trying to get at.

My question is... why would a manufacturer bother making the low-end model if they can produce a much better car for the same price it costs them to produce the better car? Imagine being able to buy a Honda, at the price of a Honda, but have a car more like an Acura?

Might make the Acura model obsolete, but imagine the sales!

I don't know... just random thoughts I've been having.... :D

[1badPT]

It clearly takes more money to produce the higher end model. The higher end model may be finished with wood accents, leather, while the lower end model may be finished with polymer accents and cloth seats. Also, most platform sharing is done between cars in different markets - the type of person who will buy a Civic might find that an EL is out of their price range, or at least more than they were considering spending. Likewise, a person who buys an EL might find a Civic is too plain for their tastes.

In essence, platform sharing lets companies tap both markets from the same production line. In a depressed market, you'll have presumably more people buying Civics, whereas when the market is good, you'll have more people buying EL's. With the shared platform, you'll be able to produce enough cars for the demand, regardless of whether the market favours the upscale or downscale model.

[thich]

Originally posted by 1badPT
It clearly takes more money to produce the higher end model. The higher end model may be finished with wood accents, leather, while the lower end model may be finished with polymer accents and cloth seats. Also, most platform sharing is done between cars in different markets - the type of person who will buy a Civic might find that an EL is out of their price range, or at least more than they were considering spending. Likewise, a person who buys an EL might find a Civic is too plain for their tastes.

In essence, platform sharing lets companies tap both markets from the same production line. In a depressed market, you'll have presumably more people buying Civics, whereas when the market is good, you'll have more people buying EL's. With the shared platform, you'll be able to produce enough cars for the demand, regardless of whether the market favours the upscale or downscale model.

some of your terminology isn't quite right:

1. Markets - a population of consumers who have the potential to buy your product/service.


Also, most platform sharing is done between cars in different markets - the type of person who will buy a Civic might find that an EL is out of their price range, or at least more than they were considering spending.

the civic and the EL are sold to the same market (as a whole) - but the TARGET market is different.


My question is... why would a manufacturer bother making the low-end model if they can produce a much better car for the same price it costs them to produce the better car? Imagine being able to buy a Honda, at the price of a Honda, but have a car more like an Acura?

Might make the Acura model obsolete, but imagine the sales!


simply put, altho 1badPT slightly alluded to it, not everyone will buy the Acura and not everyone will buy the Honda.
Hence, the purpose of providing a choices for the customer to choose is that you have a better chance of still making a profit than making no profit. If you only sold either the civic or the EL, you basically make no profit if the customer decides that it isn't the car of their choice.

[1badPT]

You've probably put it in terms that are clearer anyways.

The term market though, is used very differently depending on the person you are talking to and the industry you are in. For me, market is a general base of people interested in a particular style or class of product(car-maybe even as specific as sedan). Target market generally refers to a specific group out of that market that the company is trying to win business from. But yeah you got the general idea of what I was getting at.

[thich]

^^ cool:thumbsup: