Mary Barra skipped Europe’s big-gest auto show of 2014 to focus on what is arguably her biggest strategic announcement as General Motors CEO. While other managers were in Paris last month, Barra briefed investors on her ambitious plan to reduce GM’s confusing slew of more than two dozen, largely integrated vehicle architectures to just four modular megaplatforms over the next 10 years.
Like Volkswagen Group CEO Martin Winterkorn, Renault-Nissan boss Carlos Ghosn and Toyota chief Akio Toyoda, Barra knows that having prolific, flexible, globally compatible megaplatforms is a key to success in the fast-expanding, ultracompetitive volume car manufacturing business.
Enormous economies of scale, lower development costs, faster times to market and the ability to build multiple cars on one line are some of the other mouthwatering benefits of megaplatforms. Mastering this part of the business could ultimately decide which automakers survive and which ones don’t as pressures from customers, competitors and regulators escalate.
Two of Europe’s largest automakers, PSA Peugeot Citroen and Fiat Chrysler Automobiles, do not have global megaplatforms and analysts say that leaves them vulnerable in an industry in which bigger is often better, especially when it comes to procurement and establishing a worldwide presence.