Word: design
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Dates: during 1990-1999
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When it was unveiled at auto shows in 1988, the Magna Torrero's hybrid design turned heads in auto-company boardrooms from Detroit to Tokyo. But it never got a chance to tear up pavement like a Lotus Elise. Instead, parts of the Canadian company's prototype car are quietly helping Ford Contours, Volkswagen Golfs and Audi A8s roll comfortably down driveways around the world. "People keep asking us when Magna is going to manufacture our own car," company spokesman Paul Pivato says, "and the answer is never. We are not a carmaker...
That was only the start. Suppliers began making complete prefabricated front ends, back ends and middles of vehicles, and automakers began outsourcing the entire design, development and manufacture of certain car models like the Lincoln Navigator. The results of this shift can be seen in Magna's order book. Although European and American auto production inched up only slightly during fiscal 1998, the company's sales topped $6 billion--a 19% jump over 1997. "Systems suppliers are getting a bigger piece of the pie," says Anders Franzen, vice president for strategic sourcing at Sweden's Volvo, which...
With outside providers supplying more and more of the finished product, auto assemblers talk a lot about core competencies these days, which essentially means defining what a company does best and then focusing energy on that activity. For the Smart Car, Mercedes made sure it kept the engine design to itself, while the chassis is that of a Mercedes A-class sedan. The car's styling comes largely from SMH Automotive, the Swiss company that uses modular design to make Longines and Swatch watches (Smart, in fact, stands for Swatch-Mercedes art). SMH owned 19% of MCC until Daimler-Benz...
Even such proprietary items as engines and overall design may be up for grabs. Volvo and Renault supply each other with engines for some models, and the high-performance British motorcar company Lotus says 10% of new cars made in Europe will carry engines of Lotus design next year. Lotus spokesman Alastair Florance says the company's new modular V-8 motor can be dismantled, reconfigured, expanded or contracted to fit virtually any car. Lotus, which is owned by Malaysian carmaker Proton, earned more money advising other carmakers last year than it did selling its own legendary road burners...
...market on chassis platforms, and no modular provider wants to start making those, at least not in Europe," says Jurgen Kruschwitz, head of SMH Automotive. "Outside engineering consultants like Lotus may play a larger part in certain functional situations, but the car companies know how to protect their own design and competence...