DaimlerChrysler may have to rethink its long-term purchasing strategy after deciding last week not to bail out Mitsubishi Motors (MMC).
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The move might also diminish chances for traditional DCX suppliers in Japan. American and European suppliers have already been frustrated in their attempts to win Mitsubishi Motors business.
“A key component of Chrysler’s turnaround strategy is to improve its cost structure by sharing platforms and procurement activities with MMC,” says credit rating agency Standard & Poor’s.
Mitsubishi had been a key element in the platform sharing plans for both the Smart and Chrysler brands.
The Smart Forfour shares 60% of its components with the Mitsubishi Colt in Europe and in the United States the new Chrysler entry-level cars are based on Mitsubishi platforms.
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By GlobalDataMeanwhile, Chrysler needs the economy of scale on its C and D platforms to compete with General Motors, Ford and the US transplants.
Chrysler and Dodge nameplates built on the platforms were anticipated to hit volumes around 420,000 units annually by 2006, according to industry forecasters, PricewaterhouseCoopers AUTOFACTS.
Combining Chrysler with Mitsubishi volumes was estimated to save up to $US200 million across the two platforms, according to a Chrysler product development executive quoted in Automotive News.
Still, as long as MMC survives, platform sharing will continue. And there is less commonality of the platforms than meets the eye.
Like other Japanese companies, Mitsubishi localises much of the supplier base and components for models assembled outside Japan.
For the new Colt built in the Netherlands, Mitsubishi designed a car that conformed to European tastes, with a separate programme manager from the Japanese car.
Front-end design, interiors and powertrains for the European Colt are different from the Japanese counterpart.
“We followed most of the auto motor + sport testing criteria,” Jan Wouter Kleinjan, European Colt programme manager said, “so this car is really tailor-made for the European customer.”
Ride and handling are different from Japan, with a focus on the short stopping distance so important in Germany.
Engines for Europe are different, and the European Colt is fitted with a manual or automated manual gearbox, while Japan has CVT.
The European version has an interior designed by the company’s German styling studio.
May slow evolution of Mitsubishi purchasing
The challenge is greater for Mitsubishi Motors. It is the most traditional of the Japanese carmakers – and like Toyota has been slow to dismantle its keiretsu and source more complex modules and systems from suppliers.
Mitsubishi has issued RFQs for complete modules, but they have sometimes not been followed through. And with strong ties to its traditional suppliers the company has found it difficult to follow Nissan’s transition to an international supplier base.
But unlike Toyota, Mitsubishi has not been successful with the old business model, and needs to change.
A reduction in the influence of DCX looks like a backward step for Mitsubishi Motors.
SupplierBusiness.com
