Hoping to improve its efficiency, driving up margins and driving down costs, Ford has been pushing to eliminate as many regional product platforms as possible. And it’s found ways to go further than originally planned, according to the maker’s CEO.
It will now use just eight separate platforms for its global product line-up, said CEO Mark Fields, during an appearance at an industry confab in Detroit. That’s barely half as many as it had at the beginning of the new millennium, when Ford’s North and South American, European and Asian operations functioned as virtually autonomous entities. And it’s one lower than the goal the maker had set for itself by 2016.
“That yields tremendous benefits to improving the rate at which we introduce new vehicles,” noted CEO Fields during his comments at the Deutsche Bank Global Industry Conference.
Ford is by no means unique. Japanese automakers were the first among mainstream manufacturers to focus on developing so-called “architectures” that could be used for products sold as far afield as Berlin, Boston and Beijing. Sharing underlying components reduces development costs and improves economies of scale when purchasing components. It also increases assembly plant flexibility.
That doesn’t mean a Ford Focus – or a Toyota Corolla or Volkswagen Golf — is absolutely the same everywhere it is sold. Manufacturers have to adapt to regional safety and emissions requirements, as well as road conditions and consumers desires. That might mean more features in a European version of the Focus, and a beefed up suspension for China.
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Another advantage of adapting shared platforms is that they can be used for a wider range of variants – “top hats” in industry parlance. Ford originally planned to produce at least 10 different models, both passenger cars and crossover vehicles, on the Global-C architecture used for the Focus.
The key is to develop flexible architectures that can be made longer, lower or wider, as required for each product.
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Even luxury manufacturers have gotten into the game. The new small platform developed by Mercedes-Benz serves as the starting point for such products as the CLA sedan and GLA crossover, as well as the maker’s A- and B-Class models, with more to come. And the platform will be shared by alliance partner Infiniti in some of its upcoming small cars.
Ford’s push to reduce product platforms has been underway for more than a decade, but got a big push with the arrival of now-retired CEO Alan Mulally, who faced the prospect of possible bankruptcy. As part of his One Ford program, the maker put a premium on selling the same basic products around the world, with only a handful of regional exceptions – such as the big F-150 pickup which is predominantly targeted at the North American market.
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Even as Ford’s platform count has dropped, the overall number of vehicles in its line-up has surged. It introduced 23 all-new or redesigned models in 2014, of which 16 were added in North America. For 2015, there will be 15 global launches, including seven for North America. Significantly, some traditionally regional products, such as the new Mustang, are now being sold globally.
“We have a full product pipeline. As we look at this year, we’re guiding higher in profitability”, said Fields. “In 2015 we’re going to stay consistent with our priorities. It’s a very important year where we expect significant growth, and it’s based on great product.”