Platforms and profitability

By: Deepesh Rathore

A news story that caught my atention today was one in FE about a recently published Deutsche Bank report saying that the Indiaca and Scorpio have not been profitable platforms for the manufacturers. Intersting reading though I don't have the complete document.

About the report, I am not sure if calculating the profitability of a platform is the right thing to do. The Indica also has the Indigo and the Marina riding on it while the Scorpio used a number of aggregates from other Mahindra vehicles.

Costs are thereby shared. And even after the 'death' of a platform so many aggregates are used for the next one.

Also, profitability is also a complex issue. For every car that Tata Motors makes, 60-70% components come from TACO, another Tata company. Same for Mahindra and same for Maruti. Needless to say, its the case for Hero Honda, TVS and Bajaj auto too. In this sense, we will also have to look at the profits of companies like Tata johnson Controls, Mark Auto etc, look at the percentage profitability and share of revenues of the concerned carmakers before arriving at a final figure of profitability of platforms.

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