GM pitches new product strategy to skeptical investors

Fri Jan 29, 2016 4:12pm EST
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By Joseph White and Paul Lienert

DETROIT (Reuters) - General Motors Co (GM.N: Quote) executives used to boast about how frequently the company redesigned cars and trucks. Now, the automaker wants to double the lifespan of vehicle platforms as part of a broader effort to slash and redirect capital spending, GM executives said.

Starting with the new Chevrolet Cruze compact, the basic underpinnings of vehicle lines could last a dozen years or more, GM President Dan Ammann told Reuters.

The move underscores the balancing act the automaker faces in tackling conflicting challenges as the growth of auto sales in the U.S. and China slows. GM and its rivals face increasing pressure to prove they can keep core product lines fresh, meet stricter emissions and safety standards, and forge a future in ride-sharing and autonomous vehicles - all while returning more cash to shareholders.

Over the next several years, the company will undertake the most extensive overhaul of its vehicle development process in decades, GM executives said.

The goal is to design its global fleet of vehicles with just a few basic building blocks, spreading the engineering and research costs for a given lineup of cars and SUVs over millions more vehicles.

A single platform, underpinning multiple models, might stay largely same for more than a decade, GM executives said. Global product development chief Mark Reuss said the company aims for up to 2.5 million sales a year from a variety of models built on the same platform as the Cruze compact, including the mechanically similar European Opel Astra.

Exterior styling will change more often, with updates of sheet metal or plastic skins - so-called “top hats” in GM parlance. The automaker also plans to freshen electronic features with software updates delivered over the internet.

The move to fewer and long-lasting platforms poses multiple risks.   Continued...

General Motors CEO Mary Barra talks about the new 2016 Chevy Cruze vehicle during an event in Detroit, Michigan, in this file photo taken June 24, 2015.  REUTERS/Rebecca Cook/Files