Two of the world’s largest vehicle manufacturers, Ford and General Motors, have confirmed their commitment to jointly invest $720 million to develop a six-speed automatic transmission to strengthen their position in the automatic market.
Go deeper with GlobalData
Under this partnership signed in 2002, only the base transmission design, engineering and testing will be common and each company will separately manufacture the components to produce different power trains for their respective vehicles.
Both companies are scheduled to start their transmission production in 2006. General Motors will begin production in its transmission manufacturing plant at Warren, Michigan and Ford will use two plants – Sterling Heights, Michigan and Sharonville, Ohio.
Nowadays, vehicle manufacturers are experiencing significant pressure on costs. Therefore, R&D partnerships are becoming very common in the automotive industry. Developing transmissions could be very costly, but this transmission collaboration between the two US based companies will save both of them millions of dollars.
While other manufacturers have been successfully manufacturing five-speed automatic transmissions for some time, Ford and GM have mainly used four-speed automatic transmissions. Because of this, both companies have been losing market share to their rivals, which use more highly developed transmissions.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe main competitive advantage of the six-speed transmission will be an improvement in the fuel consumption, estimated at around 4% compared to a traditional four-speed automatic transmission.
Ford and GM have declared that half of their vehicles will use a six-speed automatic transmission by 2008 to enable both players to take advantage of the opportunity to win back share in this sector.
Currently, consumers are seeking better fuel economy as petrol prices rise. Furthermore, regulations on emissions and fuel consumption have become stricter. These factors, combined with the fact that less than 1% of vehicles in North America currently have six-speed automatic transmission, mean that there is significant potential for vehicles with six-speeds.
SOURCE: DATAMONITOR COMMENTWIRE (c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.
