In a bid to reverse the narrative that the company was in decline in recent months, Ford Motor Co. offered reporters and analysts a glimpse at a product plan that will renew three quarters of the vehicles in dealer showrooms by 2020.
Ford CEO Jim Hackett said that the revamp will build on the company’s strength in trucks, SUVs and commercial vehicles and include the incorporation of hybrid technology in its popular vehicles.
The push for hybrid-electric vehicles will bring new capability and features to customers on high-volume vehicles like the F-150, Mustang, Explorer, Escape and the Bronco, Hackett said.
“Our passion for great vehicles is stronger than ever,” said Hackett. “This showroom transformation will thrill customers, drive profitable growth and further build toward our future of smart vehicles in a smart world,” he said.
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“I felt the vibration of the changes coming to this industry,” he added.
Ford estimates that 2020 sales of SUVs could account for 50% of all retail vehicle sales, which is one reason that Ford is re-allocating $7 billion in capital spending from cars to SUVs, Ford officials noted in the presentation to journalists and analysts. By then, Ford’s line-up will include eight SUVs, including five with hybrid powertrains and one battery-electric vehicle.
Ford estimates its SUV sales could grow as much as 20%, which is more than double the industry rate, to more than 950,000 units in 2020, according to a study by LMC Automotive, and surpass 1 million units in 2021.
Jim Farley, Ford president of global marketing, said the success of Ford’s newest SUVs, the Ford EcoSport and the Ford Expedition, illustrate the efficacy of the company’s SUV strategy. Ford has sold 3,000 EcoSports in the first two months of 2018 and the new utes is selling exceptionally well in markets on the East and West coasts.
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“Expedition is selling nearly as fast as we can deliver them. Retail sales are up almost 50% and you better believe we’re continuing to look at ways we can increase our volume,” Farley added.
Joe Hinrichs, president of global operations, also said Ford will have replaced more than three quarters of the current line-up, reducing the average age to 3.3 years from 5.7 years.
Ford is also looking to reduce the time from sketch to showroom by 20% even as it eliminates $4 billion in engineering and development costs. The company is also enhancing human centered design by introducing customer insights into the vehicle creation process.
The presentations by senior executives, which included no discussion of the company’s plans for autonomous vehicles, came following a series adverse stories about Ford’s prospects, including warnings on the company’s credit ratings, recalls and guidance that the company’s earnings are expected to drop this year.
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The company’s problems were on exacerbated when one of the company’s top executives, Raj Nair, resigned after being accused of misconduct. Hackett, however, told reporters after the presentation that the company has stable leadership. “I think we have a very good team in place,” he said.