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Mondeo CD391 Citroen C5 Vauxhall Insignia 241012

Ford end production at Genk by 2014, GM and PSA joint production from 2016

By Andrew Marsh, 24.10.12
Posted in: Manufacturer Profiles | Public

For many years Genk has been an important production hub for Ford of Europe, but the news announced today is that manufacturing will stop there by 2014. The announcement was widely anticipated, since Genk is home to the Mondeo (CD345) as well as the Galaxy / S-Max (CD340). The bottom line is that Mondeo has suffered from sales loss to the sector below (including Focus 3 as well as Fiesta) along with migration of customers to Audi / BMW / Mercedes-Benz.

For much of the career of Mondeo CD345 the estate / wagon, saloon / sedan and hatch have been sold in smaller numbers that even the BMW 5 series. The pay-back was to share the EUCD platform with not only the closely related MPVs (Galaxy and S-Max) but also products from the former Ford empire – such as the front end structure of Land Rover Freelander 2 / LR2, Range Rover Evoque – along with the underbody structure of Volvo S60, V60, XC60, V70, XC70 and S80. EUCD is evolving, and will leave behind the former empire as their new owners develop alternative body structures.

The problem of significant investment in return for poor sales in Europe is the shared with GM for the Epsilon 2 based Insignia (sister to the Buick Regal and 2012 Chevrolet Malibu) and with PSA Peugeot Citroën for the C5 as well as the 508. Tellingly the Citroën DS5 is based on a stretched higher volume platform from the 308 / C4 family rather than adapted C5 / 508 platform because it is cheaper to build, has better spread of investment risk and more profit per unit.

The problem?

All three companies are losing money in Europe.

GM need to boost share value in the USA to reduce political damage to the brand and to prepare for separation from the USA tax payers (ie, give their cash back).

Ford enabled ‘One Ford’ with truly global manufacturing, which is how the CD391 is already in production in both the USA and Mexico as the 2013 Fusion. The additional body styles – the estate / wagon and hatch – distinguish the next generation Mondeo from the 2013 Fusion.

The solution?

Announced on the same day (24th October 2012) the paths could not be more diverse.

  • For PSA Peugeot Citroën and GM, the joint venture will build four families of vehicles including one range for this upper European ‘mass market’ sector, so sharing investments and spreading risk. The first of the four model range programmes will appear in 2016….
  • For Ford, they have already a clear strategy which allows them to move towards optimising each manufacturing plant output. So, C-Max along with Grand C-Max will move from Valencia to Saarlouis, whilst Mondeo CD391 will be placed into Valencia along with replacements for the MPV twins (Galaxy and S-Max).

For the repairer and the Insurer the impact of the Ford decision will make little operational difference, since production will still be centred in Europe. However, for the PSA Peugeot Citroën and GM joint venture the effect could be more profound…

Further reading – PSA Peugeot Citroën and GM joint venture announcement analysis

 

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