Ford CEO Alan Mulally, a former Boeing executive, was surprised by the huge number of options for cars and trucks that drove up manufacturing costs when he made the move from the aircraft to the auto industry, according to a US report.

For example, the Lincoln Navigator SUV had 128 possible console combinations, he told the Morgan Stanley Global Automotive Conference in New York, according to the Associated Press (AP).

"I've just never seen the complexity that we have in the car business and the variation we have with every car," Mulally said. Ford had worked in the last 18 months to reduce complexity by up to 80% on some models.

The resulting savings is part of the larger plan to remake Ford by shrinking it to match the reduced demand for its products in the US and by taking advantage of its huge global size to reduce complexity and costs, he said, according to AP.

The report said Mulally had also conceded that the company fell behind the competition in fuel efficient engines and transmissions, but said it was catching up with its new EcoBoost line of four- and six-cylinder direct-injection turbocharged engines, claimed to deliver up to 20% better fuel economy and a 15% improvement in emissions without compromising driving performance. It is also promoting the engine as a less expensive alternative to hybrids and direct-injection diesels, AP noted.

Mulally was also quoted as saying Ford would make money selling small cars in the US because its globalisation efforts would allow it to build more cars on the same underpinnings worldwide, reducing costs.