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The shift toward electric and autonomous vehicles and a trade war that is forcing carmakers to build separate factories for Europe, the United States and China are helping accelerate the trend. So is the global clampdown on emissions following VW’s 2015 diesel cheating scandal. Carmakers long aspired to follow Henry Ford’s ideal of using one set of production tools to supply markets all over the world at the lowest possible cost cufflinks sale uk sale. They now see standardization of some technologies — particularly engines and vehicle underpinnings, known as platforms — as a potential source of cost savings, with other features used to lure consumers..
“Economies of scale matter in architecture and powertrain,” industry veteran Carl-Peter Forster, now a director of Volvo Cars, told Reuters. “In theory you can keep costs down through lower tooling costs, but you need to make the product in different places in the world, which means double-tooling.” cufflinks sale uk sale. Ford and VW are not attempting a merger but want to share costs by joining forces in markets and technologies they have found problematic but do not want to retreat from. After struggling to make money from passenger cars in South America, China and Europe, Ford has dropped its focus on the Mondeo as a model for the world and abandoned new sedans..
Volkswagen meanwhile remains a niche player in the profitable U.S cufflinks sale uk sale. pickup truck segment. In September, it said it will cease producing its iconic Beetle as it readies for a future of mass-market electric cars. Similar tie-ups point to a trend. Honda and General Motors have agreed to split development costs on autonomous driving while Toyota and Mazda plan to follow Mercedes-Benz and Nissan in sharing a factory to serve the NAFTA markets. Jaguar Land Rover is looking at alliances in the area of powertrains..
Forster, who declined to comment on Ford and VW’s proposed deal, said focused partnerships can work better than formal mergers, based on his experiences overseeing transformational takeovers and alliances at Tata, BMW and GM Europe. Speaking about the merits of consolidation to Reuters in 2015, Forster said there were limits to economies of scale cufflinks sale uk sale. “With scale you reach a point when you no longer reap the benefits of lower cost per unit because of the added challenges of management complexity and bureaucracy,” he said, citing an engine factory as an example..
Forster confirmed through a spokesman this week that his remarks are still current. For a FACTBOX on auto industry mergers and alliances, click cufflinks sale uk sale. Marchionne, who died in July, is part of the reason Ford’s shareholders are demanding it undertake a radical rethink of its global footprint and put greater emphasis on profitability. In an April 2015 presentation entitled ‘Confessions of a Capital Junkie’, the Italian accused the auto industry of wasting billions on duplicate products..