Ford Plans to Focus on Smart Vehicles as Mobility Solution

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By 2019, 100 percent of Ford Motor Co.’s new U.S. vehicles will be built with connectivity. The company has similarly aggressive plans for China and other markets, as 90 percent of Ford’s new global vehicles will feature connectivity by 2020.

This begins with the company reallocating $7 billion of capital from cars to SUVs and trucks, including the Ranger and EcoSport in North America and the all-new Bronco globally. Ford also has plans to build the next-generation Focus for North America in China, saving capital investment and ongoing costs. Further, Ford is reducing internal combustion engine capital expenditures by one-third and redeploying that capital into electrification – on top of the previously announced $4.5 billion investment.

“Ford was built on the belief that freedom of movement drives human progress,” says Jim Hackett, Ford’s president and CEO. “It’s a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world’s most trusted mobility company, designing smart vehicles for a smart world that help people move more safely, confidently, and freely.”

Reiterating its long-term goal of an 8 percent automotive operating margin, Ford also plans to embrace the technological changes and increased competition facing the industry. To deliver, the company plans to expand its scope to include vehicles and services designed around human-centered experiences. Ford will expand and integrate hardware and software in complex devices, while delivering scale and the trust tied to the Ford brand.

Other specific initiatives include:

  • Reallocating $7 billion of capital from cars to SUVs and trucks, including the Ranger and EcoSport in North America and the all-new Bronco globally. Ford also has plans to build the next-generation Focus for North America in China, saving capital investment and ongoing costs. Further, Ford is reducing internal combustion engine capital expenditures by one-third and redeploying that capital into electrification – on top of the previously announced $4.5 billion investment.
  • Continuing to leverage partnerships, remain active in mergers and acquisitions and collaborate to accelerate research and development. Ford recently announced it was exploring a strategic alliance with Mahindra Group as it transforms its business in India, and Zoyte with the intention of developing a new line of low-cost all-electric passenger vehicles in China. When it comes to autonomous vehicle development, the company recently announced a relationship with Lyft to work toward commercialization and a collaboration with Domino’s Pizza to research the customer experience of delivery services.
  • Creation of a dedicated electrification team within Ford, focused exclusively on creating an ecosystem of products and services for electric vehicles and the unique opportunities they provide. This builds on Ford’s earlier commitment to deliver 13 new electric vehicles in the next five years, including F-150 Hybrid, Mustang Hybrid, Transit Custom plug-in hybrid, an autonomous vehicle hybrid, Ford Police Responder Hybrid Sedan, and a fully electric small SUV.

“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally,” adds Hackett. “Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”