Ford wants to increase volume from about 5.7 million vehicles annually to about 8 million by the middle of this decade. (Spencer Platt / Getty Images)
Dearborn ó Ford Motor Co.ís annual spending budget will top $100 billion this year, the automakerís head of purchasing said Monday.
An anticipated rise in global vehicle production, costs of new technology and rigorous fuel economy standards will likely up Fordís spending by 10 percent this year, said Hau Thai-Tang, who took over as Fordís group vice president of global purchasing.
About two-thirds of that is dedicated to manufacturing expenses and the increased spending comes as Ford plans to trim its number of suppliers from about 1,300 to 750. About 80 percent of Fordís supplier business comes from the automakerís top 100 suppliers.
Ford wants to increase volume from about 5.7 million vehicles annually to about 8 million by the middle of this decade.
Spending is likely to jump more in markets like China and India, where Ford has a growing presence and hopes to sell more vehicles, but Thai-Tang said spending will remain relatively proportionate among Fordís global regions, which includes North America, South America and Europe.
ďYou wonít see disproportionate growth in terms of low-cost countries,Ē he said.
Ford has cut costs ó particularly on the development side ó by reducing the number of global vehicle platforms from 27 in 2007 to just 14 today. By about 2017, 99 percent of Fordís vehicle production will be based off nine platforms.
But in an effort to rely more heavily on local suppliers ó a necessity in some countries which have minimum local content standards ó Ford is also working to regionalize parts in smaller markets, particularly those with vehicle production of fewer than 100,000 per year.
Thai-Tang, formerly a product development executive, cited the Focus compact car and Ranger small pickup truck possibly sharing more parts in South America than in other areas of the world to help drive down supplier costs.