General Motors is rethinking its approach in the automotive marketplace. A number of conflicting issues (auto sales growth are slowing, stricter standards for emissions and safety; autonomous vehicles, changes in how vehicles are owned, and trying to return more cash to stockholders) have the company making some drastic changes in an effort to cut captial spending.
Speaking with Reuters, a number of GM executives said they are undertaking the most extensive overhaul of its vehicle development process in many years. The end goal is to design their global lineup with a few building blocks and spreading the costs of engineering and research over many more vehicles. Also, GM plans on doubling the life of their platforms.
GM President Dan Ammann said the basic platform of their vehicles "could last a dozen years or more." This move will begin with the next-generation Chevrolet Cruze. GM plans on changing the exterior styling more often and updating electronics with updates from the internet.
But this new strategy brings a lot of risks. First, GM will be increasing its capital spending from $7 billion in 2014 to $9 billion in 2019. This is so GM can prepare for this change in strategy with investments in various facilities. There is also the danger of the platforms being outdated or products that aren't appealing customers in different global markets.
“The advantage could be short-lived,” said Jeff Schuster, senior vice president at LMC Automotive.