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GM and Ford Will Rank in Top 10 of Best Performing Platforms

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On: Fri, Nov 26, 2010 at 11:46AM | By: Sherry Christiansen

GM and Ford Will Rank in Top 10 of Best Performing Platforms

GM and Ford Motor Company are two automakers on track to build some of the top performing platforms in the world. Both automakers have designed global car platforms that will be the structural base for their top vehicles throughout 2015 model year, according to Daniel Chang, consultant from AT Kearney. The top platform in the world is currently Toyota’s Camry platform. None of Detroit’s Big Three automakers are on the list of the top 10 performing platforms in world-wide auto sales. But all that is about to change; in 2015 Ford’s Focus platform is projected to take 3rd place worldwide followed by GM’s Cruze platform which will be number 4.

Development of new platforms can cost automakers millions of dollars and several years to build. High sales of cars such as the Focus can generate the capital it will take for U.S. automakers to stay competitive in the world-wide market.

"Domestics will be a different picture when you get to 2015," Chang said during the Reuters Global Autos Summit. "All the automakers really have to compete globally because that's where you get the economies of scale."

According to Auto News.com: “GM and Ford are moving toward global platforms to cut production costs and make vehicles that can dominate markets in North America, Europe and Asia. Ford has outlined a path for doing this under its One Ford plan.”

Chang stated that the average number of vehicles built on one platform is about 400,000 per year. When automakers design platforms that can be used for around a million vehicles, they can essentially save about $700 per automobile in cost of production. The savings can be utilized in order to become more competitive in the automotive market.

"You can certainly take it to the bank, but if you want to win a particular segment, you've got a number of things you can do," Chang said, referring to how automakers are working toward more flexibility in vehicle production to satisfy consumers buying trends.

The cost of fuel will continue to drive the market according to Chang. In looking back, it is apparent that rising fuel prices in 2008 led to consumers boycotting the sale of large V-8 engines in SUVs, such as the Hummer, and opted instead for smaller Sports Utility Vehicles, like the Ford Escape and the RAV 4. As the industry begins to recover, automakers need to learn to reduce expenses in auto production and focus on being flexible to adjust plans as the market conditions change.

"If you, as an automaker, have an ability to flex your manufacturing capacity and can switch from smaller cars to large vehicles, you are going to be competitively advantaged to manufacturers that have fixed plants," Chang said.

It’s been predicted that in 2011 over 14 million vehicles will be sold in the U.S.; by 2012 that number is said to potentially climb to 16 million.

"Manufacturing flexibility will be key for automakers because as the volume comes back, the question is what types of vehicles will people prefer," Chang said.

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