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Customer LoginsEconomies of scale: how are the mainstream makes doing?
On June 27, Nissan CEO and President Carlos Ghosn outlined the company's growth plan for the next six years, including raising its global market share from the current 5.8% to 8%. One element in Mr. Ghosn's plan is an annual 5% reduction in costs, to be achieved in part by growing economies of scale. This measure, also referred to as scalability, has also frequently been mentioned by Ford's CEO, Alan Mullaly, as a key part of Ford's blueprint for the future. Ford's much-publicized "One Ford" plan includes achieving greater economies of scale by using one platform globally for models sold in every major geographic region.
So, how are the mainstream makes doing in the area of scalability? Currently Ford leads its competitors, with about 113,000 registrations per model. While this result is down about 20% from five years ago, this decline is less than the average drop across all eight mainstream brands (down 25%). Ford benefits from continued high volume for the F-Series and improved volume for the Escape, Fusion, and Focus. Ford's results have been hurt by sales declines of the Flex, Explorer and Expedition.
Honda ranks second in volume per model even though its model count has increased by two (Accord Crosstour, CRZ). The Accord, Civic, CR-V, Odyssey and Pilot are consistently strong performers for Honda, all registering more than 100,000 units both five years ago and now. On the other hand, Honda's volume per model has been dragged down by weak performances of the Ridgeline and Element.
At the other end of the list, Dodge and Volkswagen lag behind the industry on registrations per model. Dodge's model count has remained the same, but its registrations per model have dropped by almost half because of major declines of the Caravan, Dakota, Durango, Mangum, and Stratus. Volkswagen's average volume per model has been hurt by both the addition of four new models (Eos, CC, Routan, and Tiguan) and the substantial volume decline of several existing products (New Beetle and Passat). Volkswagen recently has enjoyed a volume increase for the re-designed Jetta, and may very well achieve similar results for the all-new Passat.
Note: The results described above are for the U.S. only, and do not take into consideration international registrations for products using the same platforms as U.S. products.
Posted by Tom Libby, PolkInsight Advisor, Polk (07.14.2011)