May 5, 2009
FIAT boss says *1 million* cars on a shared platform with GM would be ‘minimum’ for profit… yikes!
No wonder the car industry is on the nose. FIAT boss Marchionne said 1 million units a year built on a shared vehicle platform is the minimal scale required to be profitable. In other words the current platform sharing (for the uninitiated that means much of the structure if not the running gear is common between brands) is unprofitable, despite FIAT’s recent turnaround. So to get to that required volume requires doing another deal with GM to share platforms in Europe, and then to bring the FIAT-Chrysler deal into the arrangement as well.
I do wonder how sustainable it is to manufacture 1,000,000 units of such an elaborately transformed good every year in order to simply turn a minimum profit. That’s just one platform, remember, generating just a few models across a small number of brands. Now platform sharing is good, it’s far better than each of the models being designed from scratch – but I think it’s best not to think too hard about such numbers, too. When you think about all of the brands, and all of the models, and all of the resources consumed to make it happen… I just want to ride my bike instead.