Ford in attempt to reclaim SUV glory
Ford Motor Co was one of the first automakers to spotlight Americans’ increasing desire for SUVs and similar roomy models.
Now, the company is scrambling to catch up with the trend.
On Thursday, Ford outlined a plan to introduce a number of new SUVs over the next three years in a bid to reinvigorate its business and shore up sagging profits.
“SUVs are going to play a really fundamental role in Ford’s business,” Jim Farley, the company’s president of global markets, told an audience of reporters and automotive analysts.
By 2020, he added, SUVs and pickup trucks would combine to make up 90% of the vehicles Ford produces in North America.
The new models, rolling out in 2019 and 2020, will include hybrid and battery-powered variants, high-performance models and a new series of rugged, Jeep-like vehicles designed for off-road use.
Farley said Ford aimed to surpass Toyota Motor Corp in domestic sales of hybrids, including plug-ins, across all models by 2021.
Last year Toyota sold more than 220,000 hybrid vehicles in the United States and Ford just over 91,000, according to Hybridcars.com.
Once the healthiest of Detroit’s three automakers, Ford has slumped in the past few years amid sluggish growth and rising costs.
Nearly a year ago, it named a new chief executive, Jim Hackett, a former chief of the office-furniture maker Steelcase, but Ford has continued to struggle. In 2017, profit in its core North American division fell 17%.
Earlier this decade, as the economy and auto sales rebounded, Ford executives were quick to note consumers’ waning preference for mid-sized cars and growing attraction to SUVs and lighter, more fuel-efficient versions called crossovers.
But Ford was slow to introduce new variations and redesign existing models, while General Motors Co and Fiat Chrysler Automobiles’ Jeep brand zoomed ahead.
The push toward SUVs signals a shift in emphasis for Ford. Before Hackett’s arrival last May, the company had focused much of its long-term strategy on self-driving cars, and had vowed to have a car with no steering wheel in mass-production by 2021.
Ford is pressing on with self-driving vehicles, but executives barely mentioned them as part of the new vehicle strategy they presented on Thursday.
“Along with its SUV plan Ford is also working to slash costs by streamlining how it develops vehicles and reducing the number of sets of basic components — known as architectures — that it uses to create different models,’’ Hackett said.
“This is not change for change’s sake,” he said. “This is to redesign the business.”
In the future, the company expects to use just five architectures to make almost all of the vehicles it produces around the world. Other automakers, including Volkswagen and Toyota, have already made similar moves.
Ford has said it expected its measures to reduce costs by $4 billion over the next five years.
Brian Johnson, a financial analyst at Barclays Capital, said it might take Ford two years to feel a significant impact from these efforts.
“We continue to believe that arguably there won’t be much to get excited about with the Ford story until 2019 or perhaps 2020,” he said.
The new SUVs planned by Ford include a version of the Bronco, the compact SUV the company phased out 20 years ago; an all-electric, four-door model designed to compete with Tesla’s Model X; and redesigned versions of existing models, the Escape and Explorer.
The company’s Lincoln brand plans to introduce two new SUVs at the New York International Auto Show later this month.
“There are also several all-new SUVs in the pipeline, including a variety of off-road models and hybrids,’’ Farley said.
“Every time we launch a utility in North America, our intention is to have a hybrid,” he said. “We are going to make hybrids mainstream.”
Hybrids like the Toyota Prius have appealed primarily to buyers seeking better gas mileage. Farley said Ford planned to use electric power to boost the torque and towing power of the SUVs it is developing.