Brands carry tremendous power in today’s auto industry. Say the names Ford, Toyota, General Motors or Volkswagen and you’re likely to immediately conjure up a clear image about things like design, performance, quality and reliability.
Brand image translates into sales and owner loyalty, said Bill Ford, the chairman of Ford Motor Co. But in an appearance following the media preview of the North American International Auto Show, the executive questioned whether automotive brands could become irrelevant in the near future.
“What will brands mean in an autonomous world,” said Ford, the great-grandson of Ford Motor Co. founder Henry Ford.
Most major auto companies, including Ford, plan to start rolling out their first self-driving vehicles by the beginning of the coming decade. Such models could be commonplace within a decade. Meanwhile, ride-sharing services like Uber and Lyft are expected to continue gaining ground, especially when they can start deploying fleets of completely driverless vehicles they claim will dramatically lower the cost of hailing a ride.
(Live from Detroit…Click Here for complete coverage of the North American International Auto Show.)
A number of industry analysts and insiders are raising questions about what the future auto industry will look like. Some foresee a time when consumers – particularly those in crowded cities – no longer need or want to own an automobile. When you don’t actually have your own car, but simply wait for a ride to pull up, the brand of that ride-sharing vehicle will be no more relevant than the nameplate on the back of a taxi.
“You won’t care,” said Ford, and that, he said, will raise fundamental questions about how today’s car companies evolve their business models to survive, never mind thrive, in the not-too-distant future.
That’s a key reason why Ford has been trying to get out in front of the coming transportation revolution. The automaker has, in fact, repositioned itself as a “mobility company,” rather than just an automotive manufacturer.
(Ford confirms return of Bronco, Ranger trucks. Click Here for the story.)
Like key rivals such as GM, VW and Toyota, Ford is now launching a series of business ventures in different areas of mobility, from ride sharing to autonomous vehicle development. It has promised to put its first fully driverless vehicle into production in 2021, targeting both ride-sharing and delivery fleets.
“This is an arms race,” the Ford heir said during an appearance at the annual Automotive News World Congress. And, as in any war, Ford is looking for allies. In some cases, that is leading to strange bedfellows. Just this past week, for example, the Detroit maker announced it will team up with Toyota to develop infotainment technologies.
Ford has also set up a presence in Silicon Valley, a move that breaks with the traditional approach of hiring in talent, rather than going outside, Ford said, noting that, “part of the problem with our industry was that we were insular for so long.”
The industry is far from removed from the rest of the world today. If anything, it has opened up in ways not seen in decades, and that has encouraged a number of new entries to challenge Ford and the rest of the established automotive order. That includes Tesla Motors, as well as Google, with its autonomous unit Waymo, and even Apple, which has reportedly been looking at ways to get into the auto industry, and new Chinese-funded start-ups Faraday Future and LeEco.
Despite earning a stock multiple that the Ford CEO admitted being jealous of, Tesla still struggles to earn money. Faraday’s own cash crunch forced it to delay construction of its Nevada assembly plant. And Apple appears to be pulling back on its automotive project.
“What the tech community has found out,” said Ford, “is that it’s really hard to build a car or truck.”
The question is whether it will become increasingly difficult for all manufacturers to earn money building cars and trucks in the coming era of self-driving vehicles.
(Ford puts a new face on the 2018 F-150 pickup. Click Here for a look.)