Ford (F) Looks For “World Car” Holy Grail

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Major auto companies have made efforts to create a “world car” for decades. It would be a vehicle which could use one design, one platform, and one engine which could be sold in Asia, Europe, North America, and South America with only the most modest of changes for each market.

A successful “world car” would save billions of design and production charges. A single vehicle for a large number of markets would decrease parts sources and increase economies of scale.

Ford’s (NYSE:F) new Focus, which the company says will use 80% of the same components from market to market will carry a 2-liter, four-cylinder engine which will get unusually high gas mileage.

Ford’s risk in building the car in multiple markets is that the markets have multiple tastes. One hurdle that the “world car” efforts has always faced is that what buyers in the US want may be very different from what they want in Italy, Germany, or India.

Fuel efficiency may also be overrated although that seems impossible today. Gas prices are relatively high around the world. but fossil fuel supply and demand have been cyclical over the last several decades and gas prices may come down again. Many car buyers still like the rumble and performance of a big engine.

Douglas A. McIntyre

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