Japanese take the safe road with sports cars

Next generation borrows siblings' platforms to lower production costs

Ka-ching
Estimated cost of a new sports car program
  • Platform: $500 million
  • Sheet metal: $400 million
  • Engine: $250 million
  • Powertrain: $250 million Source: Nextrend

  • LOS ANGELES - After getting their fingers burned in the early '90s with dedicated sports car platforms and powertrains, Japanese automakers are taking a more conservative tack with their re-entry into the hyper-competitive performance segment.

    With tenths of seconds becoming ever more expensive to shave off 0-60 mph times, sports cars are moving away from being technological tours de force to vehicles fast enough for 99 percent of drivers - while still making a profit for the parent company.

    For instance:

    n Nissan Motor Co. will use the 3.5-liter V-6 from the mainstream Altima and Maxima sedans for the 2003 3.5Z. The Z's platform architecture will be shared with several other Nissan-branded vehicles, details of which will be unveiled at the Tokyo Motor Show in October. Nissan President Carlos Ghosn has demanded a car capable of 0-to-60 mph in under six seconds, priced under $30,000. And it must be profitable, he has warned, or he'll pull the plug.

  • Mazda Motor Corp.'s RX-8 will be on a shared platform. The underpinnings of the four-seat sports car also will be the basis of the next-generation Miata, but the Miata will not get the RX-8's rotary engine. Although four seats should increase interest from consumers with families, Mazda also may add an even higher-performance two-seat version of the RX-8 to increase volume from the platform.

  • Toyota Motor Corp. is considering the Lexus IS 300 rear-wheel-drive platform as the basis for its successor to the Supra. With Toyota Racing Development already building a supercharger for the Lexus' 3.0-liter inline six-cylinder engine, Toyota could quickly borrow the boosted engine for its sports car. Again, Tokyo is expected to be the stage for more details.

    Fork in the road

    This conservatism is a big change from the early-'90s Japanese sports cars, which seemed to follow the same recipe: screaming performance regardless of cost. That meant costly one-off platforms, engines, suspensions, interior modules, even steering wheels, running well past the $1 billion mark to develop.

    Despite all this innovation, the Toyota Supra, Nissan 300ZX, Mazda RX-7 and Mitsubishi 3000GT all followed a similar Icarus flight of sales. Once it was no longer the new kid in town, sales of the car plummeted.

    It did not help that all four were priced above $35,000 when equipped with the bells and whistles enthusiasts craved.

    "We learned our lessons from the last generation RX-7 in terms of pricing, and in terms of the cost of the program and its componentry," said Jack Stavana, a former Mazda North American Operations product planning wonk, recently placed in charge of resurrecting Mazda's accessories business.

    "We still have to capture the purity and essence of a sports car, but compensate for the lack of utility and function the last car had, which led us to the concept of a four-passenger sports car for adults."

    Although car company executives declined to give profit-and-loss figures on the fiscal punishment those previous sports cars meant, industry analysts projected that all four were big money-losers for their automakers.

    Wes Brown, an analyst with Nextrend in Thousand Oaks, Calif., estimates that a sports car platform costs at least $500 million to develop. Sheet metal adds $400 million and a derivative engine and transmission from an existing family cost another $250 million each, he says.

    That's a quick $1.4 billion for a niche car that is doubtful to break the 50,000-unit sales mark.

    Not a new strategy

    What the Japanese are doing with their sports cars is hardly innovative. Sharing major components across model lines has become common practice.

    "There are efficiencies to be gained by sharing components," said Jack Collins, Nissan North America Inc. vice president of product strategy and marketing.

    "But what parts are OK to share? Anything, so long as the principle of building a world-class sports car remains intact. In our case, sharing the 3.5-liter engine is clearly cost-effective and has a volume effect, but it can only be done if there is no compromise."

    A new wave of American-marque niche products such as Ford Thunderbird and Chevrolet SSR are borrowing major components from mainstream vehicles, while creating a separate interior and exterior to market the vehicle as distinct.

    "You borrow where it doesn't matter to the consumer, but it's a fine line you don't cross," said Mike Robinet, director of forecast services for CSM Forecasting in Northville, Mich.

    "In some cases you can tell where they shared a component and it doesn't mesh well. Then again, Thunderbird never would have made its numbers if they built it from the ground up."

    Cool junk

    Brown points out that Chrysler made the Prowler for only $200 million because it came from the corporate parts bin. "It was junk, but it was cool," he said.

    But there's a big difference between sharing parts to create a sporty image car, such as the Thunderbird or the Prowler, and trying the same thing to develop a world-beating icon.

    Robinet said the Europeans shave risk by contracting with coach builders such as Pininfarina and Bertone to help develop and build their niche offerings.

    "Those companies can make 20,000 units, where they know how to do it effectively," he said. "In North America you have (union) barriers that form a roadblock."

    Despite the risks inherent in the high costs of a new-car project, Stavana says the automaker feels it must proceed with the RX-8.

    "We see building the RX as a requirement and expectation," he said. "But of course you are faced with business realities as well. So we're looking at a more usable, yet true, sports car."

  • You can reach Mark Rechtin at mrechtin@crain.com

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