Ford’s new blueprint marks end of an era
Automaker to invest $7B in trucks, SUVs, electric cars and self-driving vehicles
Car buyers want SUVs and trucks today. Automakers are feeling pressure to make the electric and selfdriving vehicles that may define tomorrow.
Ford Motor is betting billions of dollars that it can excel in meeting both of those demands, its new chief executive, Jim Hackett, said Tuesday. And in doing so, it will be moving away from the gasoline-powered passenger cars that have been its hallmark since the Model T.
“We now know there is a future that we have to pay attention to,” he said during his first big presentation to investors since taking Ford’s top job in May. He said Ford was planning for a global market in which about two-thirds of all vehicles sold will use hybrid or all-electric power by 2030.
His blueprint for reinvigorating the automaker, whose stock price and profit growth have both been sluggish, also calls for shifting its geographic orientation. Ford now plans to invest more in regions that are growing and profitable, including China, and less on slower-growing regions such as Europe and India, Hackett said.
He said Ford aims to take about $7 billion (U.S.) that was earmarked for developing new cars and put that money toward trucks and SUVs — big profit makers as gasoline prices remain low — as well as electric cars and autonomous vehicles.
Putting more emphasis on introducing new trucks and SUVs while also managing the transition to vehicles that lack an internal-combustion engine, or even a driver, will require a dual focus.
Michelle Krebs, an analyst at Autotrader.com, said Ford might find the transition difficult. “Straddling the now and the future will be tricky especially in terms of profitability,” she said. An immediate area of emphasis will be connected vehicles, which collect data about their operations and surroundings that can be used to improve safety and provide new digital services.
By 2019, all new Ford models in the United States will be able to transmit data back to the company or its business partners, a step toward creating mobility services like ride-hailing and traffic avoidance. The company is planning a similar rollout in China. By 2020, 90 per cent of all new models, regardless of market, will offer such connectivity.