QOTD: What's the Optimal Manufacturing Mix for Profitability?

Corey asked: "How many platforms does a full-line manufacturer need these days?" I understand how he arrived at this question, as a follow-up to yesterday's discussion; but it's the wrong question. Of course it's smart for manufacturers to use each platform for as many models as possible. The extent to which this can be done is a matter of the technology of building cars, which I know nothing about. The real way to make money is to use each platform for as many brands as possible. This is the key to VW's success. Everyone knows that a SEAT is built from VW's parts bin. Everyone knows that a Skoda copies last year's Audi technology. No doubt buyer see this as a good thing. If last year's technology was good enough for Audi, it's certainly good enough for a medium-priced Skoda. And VW doesn't cheap out on sheet metal. They maintain a distinctive brand identity for each by making the cars look different. I assume that PSA intends to follow the same pattern. They will use the same platforms for all their brands, but they will not build Peugeots in England and Germany. They will make a model that appears different to sell as a Vauxhall in England. They will build something *German* to sell as an Opel in Germany. As I understand it, even Toyota does the same thing, at least in Japan. We tend to think of Toyota as equivalent to Chevy, but we should think of it as equivalent to GM. The different Toyota stores in Japan are like different brands. I don't know how it works, but Toyota must feel they can sell more cars by appealing to different buyers in different ways. The Chinese certainly understand this. An article just above this one explains that Lotus will build a CUV using the Volvo platform (that Geely paid for.) Will it be the same as the Volvo, but with different grill and tail lights? Of course not. They will use it to build the Lotus brand identity. And Geely will use the platform for one, or several, brands in China. American manufacturers have had very few successes with this strategy. A rare example is the 1983 Ford Thunderbird/ Mercury Cougar. Using the same chassis and mostly the same body, they built two cars that did not cannibalize each other. People who liked the Thunderbird hated the Cougar; people who liked the Cougar didn't like the Thunderbird. But for the most part, American manufacturers have failed badly, trying to make a quick buck by skimping on the development of distinctive brands. One need only mention the Cadillac Cimarron for proof of this.

Like it or not, I think Ford's decision to cut most of its car lineup and their insistence on Ecoboosting everything fits this question.