Jump to content
  • Greetings Guest!

    CheersandGears.com was founded in 2001 and is one of the oldest continuously operating automotive forums out there.  Come see why we have users who visit nearly every day for the past 16+ years. Signup is fast and free, or you can opt for a premium subscription to view the site ad-free.

Sign in to follow this  

Chrysler's future rests on global platforms

Recommended Posts

Chrysler's future rests on global platforms

Common structure will boost quality, CEO says

Alisa Priddle / The Detroit News

Over the years, Chrysler Group LLC has developed vehicles using an outdated and expensive structure even as its sales and resources were shrinking.

As the Auburn Hills automaker added new products, engineers often started from scratch, developing a whole new platform, a term that refers to a vehicle's basic underpinnings, components and systems.

But the industry trend is to fewer, larger, more global platforms, allowing the cost of engineering and tooling to be spread over more vehicles. Quality is improved and new cars can be brought to market faster when a part is not being redesigned for 15 different models.

Chrysler comes late to the strategy, but CEO Sergio Marchionne insists the change must happen fast. He has said a single platform must yield 1 million vehicles to be profitable, and his desire for scale led Fiat to a partnership with Chrysler.

In Auburn Hills, Marchionne was dismayed by the number of platforms, many of them the basis for relatively low-volume vehicles.

"The proliferation of architectures in this organization, which has been my pet peeve forever, has just caused an incredible strain on the organization," he said last November when he outlined Chrysler's five-year plan.

From 11 to seven platforms

To remedy this, future new vehicles for Chrysler and Fiat will come from the kind of big, global platforms successful automakers such as Honda Motor Co., Toyota Motor Corp. and Volkswagen AG are employing. Volkswagen's Golf car group, for example, will account for a third of the company's total assembly of 3.8 million vehicles by 2016, said Anthony Pratt of the auto division of PricewaterhouseCoopers LLP in Detroit.

Chrysler's 11 unique car platforms will be condensed into five by 2014. Additionally, Fiat will provide two small car platforms, an area where Chrysler does not even compete today, to bring the total to seven.

"There is no doubt that the root of Chrysler's undoing through the latter half of the last decade emanated principally from their lack of platform scale and real global diversification," said Michael Robinet of CSM Worldwide in Northville.

The degree to which automakers have embraced the concept of global platforms is striking. Successful global companies get 80 percent of their vehicles from four or five platforms while Detroit's Big Three get 80 percent from seven, eight or 10 platforms, said CSM's Jim Gillette in Grand Rapids.

The industry as a whole will see a 13 percent drop in the number of platforms in the next five years, but the Big Three will see a 28 percent reduction, said James Ricci, director at Grant Thornton LLP in Southfield, which recently completed a study of global engineering.

"Chrysler literally has less money and is two years behind everyone else," Ricci said.

As Chrysler plays catchup, the bulk of its car lineup will come from common platforms with Fiat.

For starters, Chrysler will gain a North American version of the tiny Fiat 500 to be followed by subcompact cars from Fiat to compete against the Ford Fiesta and Chevrolet Aveo.

The real gains will come in the compact and midsize car segments, where six platforms that now yield 10 models including the Chrysler Sebring, Dodge Caliber, Journey and Dakota, and Jeep Liberty and Compass will be replaced by a single Fiat-engineered platform.

The new platform will underpin 1 million vehicles annually by 2014, including 700,000 for Chrysler, sold under 21 different nameplates.

Chrysler's average volume per platform will more than double to 305,000 by 2014 from 125,000 today, said Scott Kunselman, senior vice president of engineering.

Per-vehicle savings add up

It is the kind of scale and efficiency that can generate a $2,000 to $3,000 profit per vehicle, said Laurie Harbour, president of automotive consulting firm Harbour Results Inc. in Berkley.

The downside of global engineering, as Toyota has learned recently, is a single problem can cascade into the recall of millions of vehicles around the world.

But the advantages of large global platforms make it a risk worth taking, Harbour said.

Chrysler lags the field when it comes to global engineering, in part because it has limited international scope.

At Chrysler, the changes are already under way.

"There has been a huge time compression," said Ralph Gilles, head of design and the Dodge Car brand. Product development time has been cut from 23 months to 18.

Increased use of virtual design and engineering tools does away with the need to build some of the time-consuming models and prototypes that used to be part of the process, Kunselman said.

Overall, Chrysler and Fiat as a single entity start with a clean slate, Harbour said, "so there is not a lot to undo or redo and things are happening quickly."

From The Detroit News: http://www.detnews.com/article/20100310/AUTO01/3100348/1148/auto01/Chrysler-s-future-rests-on-global-platforms#ixzz0hmOFOVvN

Share this post

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets



Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.