Why the luxury Continental GT shares parts with VW's lowly Golf

When the first of nearly 100 €250,000 Bentley Continental GTs sold in Ireland are delivered to customers here next month, the…

When the first of nearly 100 €250,000 Bentley Continental GTs sold in Ireland are delivered to customers here next month, the beautifully upholstered cars will come with the same cheap black plastic key used for the €19,000 Volkswagen Golf.

Bentley prides itself on its exquisitely executed woodwork and leather interiors, but the key is an unwelcome reminder that much of the technology under the bonnet is lifted from other vehicles in the VW group.

While importer Charles Hurst is coy about the identity of the Irish purchasers, for British customers such as Sir Elton John, Hugh Grant and other celebrities at the top of the waiting list for the Continental, the key will be a minor upset given the luxurious seating and 552 bhp, turbo-charged, 6-litre engine.

But it highlights the difficulty of maintaining a distinct brand image while pursuing cost efficiencies by sharing parts with sister companies. It's a problem with which every large car-maker must grapple.

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The lesson has been learnt the hard way by VW, Europe's biggest car-making group. It has abandoned its strategy of sharing the "platforms" on which a car is based across its brands after buyers realised that cheap Skodas and Seats shared most of the abilities of the higher-priced VW-badged cars. This made it hard for VW to differentiate its seven brands, a vital part of its multi-brand strategy.

Sharing parts is vital to car makers' cost-cutting efforts. It speeds development time and reduces investment, allowing more vehicle designs to be produced and to be sold profitably in smaller numbers. It also allows different types of vehicle to be built on the same production line, improving factory efficiency.

VW, like US rivals GM and Ford, is beginning to implement a new strategy. VW calls it a "modular" approach, sharing different modules, such as an axle or gearbox, but picking different modules appropriate to each brand.

Bob Lutz, vice-chairman of GM, talks of an "architecture", comparing it to the instructions for children's building blocks. "It's like the definition of a Lego set."

This is a radical departure. The old approach defined exactly where the engine had to be fixed to the body, or how the doors were attached for each platform.

Mark Hogan, vice-president of advanced vehicle development at GM, says that this limited the ability of designers to change the look of vehicles. "Our previous thinking about platforms probably limited us to three or four models off a given architecture."

If cars look alike and feel similar to drive, customers will be reluctant to pay more purely on the strength of the badge. VW was not the only car-maker to make the mistake of trying to live off the past value of its brands.

Throughout the 1980s, GM made Pontiac, Buick, Cadillac and Chevrolet small cars from its J-Car platform, which differed only in details such as headlights, bumpers or engines. This "badge engineering", perhaps the worst in the industry, damaged all the brands because they no longer appeared to stand for anything. But neither VW nor GM have launched many models under their new approach because of the wide-ranging changes needed to design, manufacturing and engineering.

Gary Cowger, president of GM North America, says: "This is an overnight success story that has been 12 years in the making."

The best illustration of the benefits of the new strategy comes from Ford. It has launched the C-Max people carrier in Europe, the Mazda 3 from its Japanese affiliate and the upmarket Volvo S40 saloon - and all from a new platform and with 40-60 per cent of the parts in common. The cars share components which users can't see, such as wiring harnesses, air conditioning units and power steering.

The company has made the vehicles visibly very different and reviewers have been very positive. "We are not locked into the same 'hard points'," says Ford. "This means we can have unique exteriors."

According to David Thursfield, Ford's president of international operations, the latest parts-sharing has saved 45 per cent of the engineering cost. If the new models - plus about 10 more planned from the platform - achieve their sales target of more than one million a year, this would save between €120 million and €160 million a year.

As the Bentley key shows, care is needed to ensure that customers don't notice the cuts involved in parts sharing. At GM, this means the personal involvement of Mr Lutz and other senior executives in every detail of a new car. Even then, damaging shortcuts are still being taken, as on the new small Saab, a refitted Subaru Impreza WRX.

For VW, fixing the key problem by replacing the black plastic design is proving far more difficult than expected. "To change the design of this key seems to be more expensive than making a whole new car," complains Bernd Pischetsrieder, VW chief executive. ... - Financial Times Service