TRAVERSE CITY, Mich. - Automakers want to develop new models in just 18 months. But cutting development time below that probably wouldn't make good fiscal sense, three top car company executives said here Wednesday, Aug. 9.
One dissenting voice came from a competitor who says it already averages 18 months.
Developing vehicles faster than that will depend on whether customers demand more frequent overhauls in product lineup, said Toshiaki Taguchi, president of Toyota Motor North America Inc.
'I think we should be prepared to accommodate those changes' in the coming years, Taguchi said.
But leaders at General Motors, Ford Motor Co. and DaimlerChrysler maintained the payoff from speedier vehicle development likely will dissipate at the 12-to-15-month level.
Development time runs from design freeze to production of the first salable vehicle.
The return on investment may not justify redesigning a vehicle in less than 18 months, General Motors CEO Rick Wagoner said. And automakers might better direct that money toward other initiatives such as supply-chain integration.
Four years ago, the industry typically took 36 to 47 months to redesign vehicles or develop new vehicles off existing platforms, Wagoner said. In 1996 GM averaged about 43 months to do a major vehicle redesign. Today, GM has many new programs on a 24-month schedule and at least two on an 18-month schedule.
'I think we'll see people settling down around 18,' he said.
Jim Holden, CEO of DaimlerChrysler in North America, and Martin Inglis, head of Ford North America, agreed with Wagoner.
'At some point, with diminishing returns, you just don't have to throw that much (investment) at it that quickly,' Holden said.
DaimlerChrysler in North America is developing all-new vehicles - those not based on existing platforms - in about 30 months and doing redesigns and derivative vehicles (such as the PT Cruiser, which has Neon ancestry) in about 24 months.
The company's goal is 24 months for all-new vehicles and 18 months for redesigns and derivatives.
Ford is developing new vehicles in the same range as its North American competitors, Inglis said. It also closely monitors customer reaction to keep products fresh.
Said Inglis: 'So if I get that feedback, then I don't necessarily need to shorten up that timing anymore.'