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Report: Ford, Toyota, Renault-Nissan improving economies of scale

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Old Aug 27, 2009 | 08:35 PM
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Report: Ford, Toyota, Renault-Nissan improving economies of scale

While all major automakers are boosting the efficiency of their operations, Toyota Motor Corp., Ford Motor Co. and the Renault-Nissan Alliance are expected to show the biggest gains in economies of scale, according to forecasting firm CSM Worldwide.

"We're seeing a deconstruction of the old, staggeringly expensive operating model where automakers developed a full-range of unique products, from small cars to commercial vans for each region," said Michael Robinet, vice president at CSM, based in Northville.

"The future will see more high-volume global platforms," meaning more vehicles built on the same underpinnings, he said.

Such a strategy lets automakers offer a wider range of models while holding down development, production and purchasing costs.
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Old Aug 29, 2009 | 10:13 AM
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don't know why they weren't doing this before. it's common sense
Old Aug 29, 2009 | 12:05 PM
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Let me get this straight.....

Foreign car manufacturers (and Ford, for some reason right now) build cars on a shared platform and this is deemed a "smart move"

Meanwhile, GM has done this in the past and was criticized for "badge engineering"?
Old Aug 29, 2009 | 01:42 PM
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Originally Posted by TheV6Bird
Let me get this straight.....

Foreign car manufacturers (and Ford, for some reason right now) build cars on a shared platform and this is deemed a "smart move"

Meanwhile, GM has done this in the past and was criticized for "badge engineering"?
Don't try to understand this world, just try to live in it.
Old Aug 29, 2009 | 01:49 PM
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They've all been doing this for the last 10-15 years now... I guess maybe the crunch is on more than ever, now, though...

I think the first "global" car Ford tried that I can recall was the mid 90s Ford Contour. It wasn't the greatest of successes here in the US, though.

I think it's more viable than ever now, though... since the US is becoming more accepting of smaller or economical cars and is getting over their love of ridiculously huge wasteful/pointless SUVs and trucks.

Originally Posted by TheV6Bird
Let me get this straight.....

Foreign car manufacturers (and Ford, for some reason right now) build cars on a shared platform and this is deemed a "smart move"

Meanwhile, GM has done this in the past and was criticized for "badge engineering"?
I think all brands have been criticized for this to an extent. It really just depends on how they structure it.

Example of 'bad badge engineering': GM's 1st attempt at the Cadillac Escalade. Ford Navigator was nearly as bad when it first came out. Toyota's LC/ Lexus LX line was similarly bad, though at least for them the LC was already definitely a luxury class SUV so it was more like the LC was posing as a Toyota rather than the LX was posing as a Lexus.


Example of 'good badge engineering': Almost any time GM has taken a product sold overseas from Opel or Holden and sold it here in the US with another badge on it.

Basically to clarify, badge engineering is bad when a company takes a vehicle that's already for sale here in the US, makes a few minimal changes, and sells it under a different brand by a different name. Good badge engineering is when they either do what I just said except make much more major changes and in a way that really differentiates the second product enough to bother having two separate models (example, the current Toyota Camry and Lexus ES, the same, yet very different)... OR when a good car is brought over from other countries.

Last edited by Threxx; Aug 29, 2009 at 01:52 PM.
Old Aug 29, 2009 | 01:52 PM
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Originally Posted by Threxx


Example of good badge engineering: Almost any time GM has taken a product sold overseas from Opel or Holden and sold it here in the US with another badge on it.
Strangely though, none of those cars have ever been labeled a success.
Old Aug 29, 2009 | 01:59 PM
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Originally Posted by super83Z
Strangely though, none of those cars have ever been labeled a success.
True, but at the same time that's a legitimate method of 'badge engineering', and that's exactly what the report in the original post is talking about when they talk about improving economies of scale. More parts that can be shared with more vehicles across the entire world without compromising product desirability to any given country.

With that said, possibly one reason why GM hasn't had such great luck is that they're just taking whole untouched products from Germany and Australia and bringing them over here. Ford and Toyota in many instances seem to tweak their products quite a bit for the country they're to be sold in, while still being able to reuse the majority of the parts in their cars.
Old Aug 30, 2009 | 12:38 AM
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The point of the situation is less "badges and brands" and more "economy of scale". The point isn't even bringing a car from overseas cause it is successful there for a few years. Not a Lexus vs Toyota debate or even an GME vs GMNA debate. The real point is designing a global vehicle that will be built and sold from day 1 on a global scale. Toyota and Nissan have been doing this for years. Ford is getting into the picture. GM still has a ways to go.

And you always get stupid re-badge moves. Like going to Japan to buy a "Toyota Cavalier"
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