Ford’s New Plan To Woo Investors And Beat Rivals Is Based On Hybrids

Ford’s New Plan To Woo Investors And Beat Rivals Is Based On Hybrids
ArtisticOperations / Pixabay

Ford overhauled its management in recent months raising concerns that the company might not be ready to take on competitors in various segments. Putting to rest some of these concerns, the automaker – on Thursday – announced a revamp of its trucks and SUVs over the next few years, including new hybrid powertrains and electric versions for almost every vehicle in the lineup.

“Trucks and SUVs are going to fuel our growth and profitability,” contributing around 90% of Ford’s sales volume by 2020, said Jim Farley, president of Global Markets. The automaker stated that by 2020 there would be a whole new breed of vehicles with an average age of 3.3 years, less from almost 6 years currently. There would be four new SUV models totaling 8 utilities in Ford showrooms by 2020, notes Forbes.

Ford’s focus on SUVs can be gathered from the fact that the company reallocated $7 billion in capital from cars to SUVs. The automaker believes that by 2020, SUV sales will represent 50% of all vehicle sales. The company expects its SUV sales to grow by 20% (almost double the industry average) by 2020.

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F-series pickup trucks have fared pretty well for Ford contributing $41 billion in business. Its pickup business has been growing consistently since the launch of aluminum body trucks in 2014. Thus, along with carrying this momentum forward, the automaker is now keen on expanding its SUV lineup beyond the company’s EcoSport and new face-lifted Expedition that went on sale recently.

Next in the pipeline are Explorer and Escape, while the Explorer ST is also in the works. For off-road driving, the automaker is adding two new vehicles – previously announced Bronco (goes on sale in 2020) and a smaller off-road performance (unnamed) utility building over the success of Ford’s Raptor off-road pickup.

Talking of Hybrids, Farley noted that for years they belonged to the niche category, but now they are on the edge of becoming mainstream products. “The valuable capability they offer—plus fuel efficiency—is why we’re going to offer hybrid variants of our most popular and high-volume vehicles, allowing our loyal, passionate customers to become advocates for the technology,” the executive said.

Farley believes that weaving hybrid technology into the Mustang would take acceleration a notch higher. The F-150 trucks, on the other hand, would get more low-end torque and a mobile generator. Additionally, the utility vehicles would be proficient enough to marmalade fuel.

All upcoming hybrids from Ford would be cheaper and more efficient compared to the current hybrids, thanks to the common cell and component design and in-house motors, transmissions, and battery packs. Ford aims to beat Toyota in the hybrid segment. The Japanese automaker is seen as the leader in hybrids ever since it came up with its first mass-produced Prius in the late 1990s.

Farley made the intentions of Ford very clear when it comes to hybrids. “So every time we launch a utility in North America our intention is to have a hybrid,” he said. “That’s a hybrid, plug-in hybrid, or in some cases, both. We’ve moved past hybrids being a science project.”

Ford is also developing six new battery electric vehicles, and the first will arrive by 2020. Sherif Marakby, vice president of autonomous and electric vehicles, said that just offering a charger in the electronic vehicles is not convincing enough for the customers looking for the long-term viability of the electric-vehicles. Along with expanding the electric vehicle lineup, Ford is also looking to redesign the ownership experience to address the concerns that currently hold customers back, Marakby said.

A Ford representative told Ars that from 2020 new vehicles would be capable of OTA updates for the key modules and systems such as the powertrain and body control modules.

To lower the time in bringing new vehicles to the market, the automaker is developing cross-platform, electrical and powertrain modules. According to the company, the new vehicle development structure and other changes will create $4 billion in engineering efficiencies within five years. Further, the new overhauling system would enable the company to cut down manufacturing expenses. For instance, the company is looking to bring down the moonroof architectures from seven to a maximum of two to three.

Hopefully, Ford’s new strategy will help it to address the concerns of the investors, who are losing confidence over the company’s earnings visibility and strategic vision.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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