Mirroring the efforts of other auto and truck manufacturers – Ford Motor Co.’s famed “One Ford” strategy comes to mind – General Motors is beefing up plans to create a “single global platform” for its Chevrolet division, from which it can customize vehicles for specific markets around the world.
This isn’t a cheap undertaking, by the way, as GM is investing $5 billion in its effort to “commonize” its vehicle lineup for overseas markets, noted Dan Ammann, GM’s president.
“A significant majority of anticipated automotive industry growth in 2015 to 2030 outside of mature markets,” Ammann (seen at right) explained in a statement. “Strengthening Chevrolet’s position through this major investment is consistent with our global strategy to ensure long-term profitable growth in the markets where we operate.”
Interestingly, GM is expanding its partnership with Chinese auto maker SAIC Motor to jointly develop this new vehicle family’s “core architecture and engine,” which GM expects will result in significant development cost savings and “optimized” total vehicle cost.
The OEM also expects to introduce the first vehicle from this “family” in the 2019 model year.
[And they surely won’t be building them like they did back in the old days, either.]
SAIC, by the way, is a big player in the manufacturing world, building both cars and commercial trucks via affiliated vehicle companies that include Morris Garages, SAIC Motor Commercial Vehicle Co, Shanghai Volkswagen, SAIC-GM, Shanghai General Motors Wuling (SGMW), NAVECO, SAIC-IVECO Hongyan and Shanghai Sunwin Bus Corp (SUNWIN).
SAIC said it sold a total of 5.62 million units in 2014, up 10.1% over 2013, and is now ranked 60th on the annual Fortune Global 500 list, thanks to its $102.25 billion in reported 2014 revenues.
[Here’s a glimpse of what SAIC’s production capabilities look like from a few years ago.]
“This new vehicle family will feature advanced customer-facing technologies focused on connectivity, safety and fuel efficiency delivered at a compelling value,” noted Mark Reuss, GM executive VP in charge of global product development, purchasing and supply chain. “It will be a combination of content and value not offered previously by any automaker in these markets that are poised for growth.”
He added that this new “vehicle family” is being developed by a multinational team of engineers and designers to ensure each model is tailored to meet the expectations of customers in specific global markets such as Brazil, China, India and Mexico, with exports for sale other areas. Yet GM’s Ammann also stressed that right now there are no plans to export this new “global vehicle” family to “mature markets” such as the U.S., though you can be sure a similar strategy will be in the works for the cars and trucks it sells here, too.
In another unusual twist, GM said it expects the “high level of localization of parts suppliers” should help drive significant savings over the life of this global vehicle program – a program the OEM expects will grow to more than two million vehicles annually.
Again, while this particular $5 billion Chevy program is being focused entirely overseas, I wouldn’t be surprised to see a similar one take root in our corner of the world sometime soon as vehicle demand here continues growing.
For example, J.D. Power & Associates recently noted that total U.S. light-vehicle sales for July are projected to top 1.47 million units; 3% increase over the same month last year. As a result, fellow analysis firm LMC Automotive is holding its total light-vehicle sales forecast at 17.1 million units for 2015.
“Light-vehicle sales continue to be on track after June ended right at expectations, continuing a great run for auto sales,” noted Jeff Schuster, LMC’s senior VP of forecasting. “The industry has found its groove and consumers continue to respond and make purchases, replacing their aging or off-lease vehicles.”
And the U.S. light vehicle population remains very old, too, with the combined average age of all light vehicles on the road in the U.S. now topping 11.5 years, based on a snapshot of vehicles in operation (VIO) taken Jan. 1 of this year by IHS Automotive.
"As long as we have tracked average age, it has gradually risen over time due to the increasing quality of automobiles,” noted Mark Seng, IHS’s global aftermarket practice leader.
“For the five to six years following the recession, however, average age increased about five times its traditional rate, which we attribute to the nearly 40% drop in new vehicle sales in 2008-2009,” he explained. “We’re now seeing average age begin to plateau and return to its traditional rate of increase as consumers have recovered from the great recession and have begun buying new vehicles again.”
Thus these “one vehicle platform” efforts may be hitting at just the right time, methinks. We’ll see if they work out as planned.