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Transportation equipment industry

General Motors Cuts Product Development Time by Six Months

Strategic Insights

— 2 min read

The General Motors Corporation has announced a significant reduction in the time it takes to design and build new cars and trucks, aiming to match its domestic competitors. The company claims to have cut the development time by six months and promises another six-month improvement by the end of the year. This move is part of G.M.'s global restructuring and investments in new technology, which are starting to pay off. The quicker development cycle demonstrates the company's commitment to responding faster to changes in consumer tastes and demand.

Key Takeaways:

  • G.M. has reduced its product development time by six months, aiming to match its domestic competitors.
  • The company promises another six-month improvement by the end of the year.
  • G.M. has moved a new vehicle concept from the design studio to the factory floor in just 30 months, beating its previous record of 36 months.
  • The company is expected to bring out new cars, including the Pontiac Bonneville, Buick LeSabre, and Chevrolet Impala, in late 1999.
  • G.M.'s chairman, John F. Smith Jr., has expressed concerns that the company may have blundered by showing a prototype of a European-market mini-van at an auto show a year before it was to go into production.
  • The company has switched to computer-aided design and holographic models, reducing the development cycle and saving tens of millions of dollars.
  • Reducing the development cycle to 30 months has shaved about 12 percent off the cost of developing a new vehicle.
  • G.M. is harmonizing designs among subsidiaries in different countries and plans to introduce small cars based on a single platform around the world starting in 2000.
  • The company has eliminated layers of management that delay decisions and consolidated divisions to put one person in charge of taking a new design to the factory floor.

Statistics:

  • G.M. has reduced its product development time by 6 months.
  • The company promises another 6-month improvement by the end of the year.
  • The time it takes to design and build new cars and trucks has been reduced from 36 months to 30 months.
  • The new development cycle is expected to save tens of millions of dollars.
  • Reducing the development cycle to 30 months has shaved about 12 percent off the cost of developing a new vehicle.
  • The company plans to introduce new cars, including the Pontiac Bonneville, Buick LeSabre, and Chevrolet Impala, in late 1999.

Sources:

  • In a recent meeting with Wall Street analysts, Mr. Smith said (Lehman Brothers)
  • Mr. Poulos said ( Detroit News )
  • According to J. D. Power & Associates ( Automotive News )
  • Michael L. Schmall, managing director of Planning Edge, said ( Planning Edge )
  • Toyota's chairman has set a new-product goal of just 14 months ( Toyota Motor Corporation )
  • Michael Robinet, managing director of CSM Forecasting, said ( CSM Forecasting )
  • Joseph S. Phillippi, an auto stock analyst for Lehman Brothers, said ( Lehman Brothers )
  • G.M. executives have confirmed that the company moved a new vehicle concept from the design studio to the factory floor in just 30 months ( Detroit News )

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