GM Targets Fewer Platforms, Longer Product Cycles

To help reduce costs, General Motors Co. plans to reduce the number of vehicle platforms it uses while nearly doubling the time they remain in production.

Future architectures could be used as long as 12 years, GM President Dan Ammann tells Reuters. To keep products fresh, vehicles likely will get several styling makeovers and over-the-air software updates during their lives, according to the news service.

The initiative will start with the Chevrolet Cruze compact sedan due this spring. The car’s all-new platform is expected to support as many as 2.5 million vehicles per year, including the high-volume Opel Astra in Europe, GM says.

The goal, GM says, is to create a global fleet from a “few basic building blocks.” The company didn’t specify how many platforms it planned to use in the future or indicate how many the company used today.

The plan includes a $5 billion effort with partner Shanghai Automotive Industry Corp. to develop and produce a new, low-cost vehicle line in China for emerging markets. This will allow GM to benefit from 20%-40% cheaper tooling costs in China, Ammann says.

The new strategy initially will increase GM’s capital spending as new platforms are phased in, Ammann says. Costs are expected to total about $9 billion per year through the end of the decade. After the overhaul, he expects annual costs to revert to 2014 levels of about $7 billion. The savings will allow the company to invest more money on other priorities, such as technologies for autonomous vehicles, connected cars and advanced mobility.

Analysts say the risk to GM is that sales could plunge in the second half of a platform’s life if styling and technology aren’t updated appropriately.