Thursday, September 25, 2008

Re-body Cars? Is there a business? Let's think

Today someone asked me if I thought that there was a business in buying the regular product of a big-name OEM, stripping it down of its body and adding a new look for the car. 

Not a one-off project, not a component car, not even really a kit car, but rather a well-engineered body replacement strategy on which to base a business.

I did not have to think long in replying that this was not a good business, but why? The detailed thought process is so much more interesting than the answer. Here's how it seems to me:

Of course, the first assumption is that the person buying the car cares about the new body shape, or else why pay more to change it.

One can also assume that there is little/no environmental benefit as the weight of the total vehicle could not be meaningfully reduced, so the interested buyers would not be motivated by additional sustainability claims.

Lastly there is unlikely to be any substantial performance difference in/due to the new body.

These three reasonings guarantee that the advantage in the re-bodied car is purely restricted to the "style" of the new car. In no other way does such a car represent extra value (not in performance, engineering, layout, etc). 

This means that since the price of the previous-body OEM is fully embedded in the re-bodied car that the price of the new style must be more than the increased cost of the work plus a margin. 

And this is where the idea really falls down: is any volume of people willing to pay a substantial markup above the price of a regular OEM car just because there is a different body on the vehicle?

My answer: NO

In short, there is more magic in a car than the just the body style. Basically, the whole car must "Fit" together as a unit before it takes on a life and magic of its if that is the kind of package that someone is offering, then I am all ears.


Andrew Cronk said...

I want to agree, but why are things like after market ground effects and spoilers so popular?

They cost extra and add nothing except visual styling. To me the next logical step would be to replace the whole body.

I am not saying it would be a good business, but I do believe there would be demand.

Unknown said...

As with anything there are always more than one side. There is actually a market for these cars. Fisker takes BMWs and rebody them to look better and Italdesign completed a rebodied Mustang concept. The demand might be lower but the market is there and its a premium market too.

I agree that there are alot of "ground effect", non-aerodynamically tested kits out there but there are companies who produce quality aftermarket tuning options that do help out with the aero. Companies like Nismo, Varis, and Mugen, tuners for Nissan, Honda and many other Japanese cars.

The Mugen Integra Type-R is pretty much a turn key car. And it doesnt just look pretty, it actually works.

To say that its not a good idea to rebody a car, i disagree because recycling old bodies of cars is an act of sustainability right there.

tim said...

I know this was an old post but I just have to comment. I agree with everything you say in your post except for your final analysis. The business you describe here, re-bodied OEM vehicles, does sound mundane and tired when stated in those terms. Truly there could never be too high a demand for such a vehicle in competition with the cost and quality of a Corolla or even a Cadillac. In a commodity market, such as you describe, the OEM will always have the upper hand. They can offer better reliability at a better price hence there could never be the volume necessary to sustain profitable business growth... in that market segment. However to stop there does sell the concept short.
The business you describe is called Coachbuilding and has actually been around longer than the automotive business itself (as the name implies.) Not only have such companies thrived for decades but have been highly influential in the success of the OEMs they have worked with. The automotive world in general would not be the same without names like Pininfarina, Bertone, Fisher Body, Brewster & Co, Karmann, Zagato, and Ghia. Here is the crux, who would pay more for an exclusive vehicle designed by a master, crafted by artisans with greatest attention to detail, engineered with performance of a fine machine perfected to a higher standard than any OEM could offer? Anyone who loves automobiles and has the money to support their habit.
The history of American coach builders shows many passing in and out of the lime light but a resurging interest in the past 5years. At the limited volume end of the market many coachbuilders are alive and well. Metalcrafters, a Southern California couchbuilder, supports a dozen different OEMs and design houses showing there still is a business case for a re-bodied OEM, even in the US. There is a great article written by the luxury-insider showing some recent coach built vehicles laying out some of the benefits of their work. Here is a link to the article and to metal crafter’s website.

tim said...

Just read your post on SUNDAY, SEPTEMBER 14, 2008 La Carrozzeria.....Cosa? Stating much of what I just posted. I'd remove my post if that was possible. At any rate, you're not alone in thinking a new dawn of the coachbuilder is right around the corner.

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