Ford Motor Co executives disclosed ambitious plans to shift the struggling automaker's product portfolio from passenger cars to SUVs, add more hybrid and pure electric vehicles, and reduce development and manufacturing costs - moves aimed at boosting Ford's profit and share price.
At a media briefing near the company's headquarters, Chief Executive Jim Hackett said Ford's previously stated margin target of 8 percent "now has upside." But company executives targeted 2020 as when the overhaul of its product lineup and engineering systems will fully take hold.
Ford is overhauling itself for the second time in a decade at a time when rivals, including General Motors Co, are telling investors they are ready now to move aggressively into new, technology-driven markets such as robo-taxi services and electric vehicles. GM said on Thursday it will invest $100 million in two suburban Detroit factories to begin commercial production of self-driving versions of Chevrolet Bolt electric cars for use as robo-taxis.
Jim Farley, Ford's president of global markets, said the automaker plans to shift $7 billion of investment to sport utility vehicles from cars, and by 2020 field a North American lineup of eight SUVs, including one high-performance electric model and five with hybrid powertrains.
Trucks already are critical to Ford. The F-series pickup line generated $41 billion in revenue last year - about 28 percent of Ford's total $145.7 billion in revenue - but the lion's share of the company's profit.
Coming out of the 2008 financial crisis, Ford pushed fuel-efficient cars for the U.S. market. Now, the automaker is driving toward a near-term future in which cars account for only 14 percent of its volume, with SUVs and trucks growing to around 86 percent of North American sales. Of nine future vehicles displayed at Ford's product development centre on Thursday, only one was a car - a high-performance Mustang.
Among new SUVs in the pipeline are two boxy models aimed at Fiat Chrysler Automobiles NV's profitable Jeep franchise.
Ford also plans to take on Tesla Inc with a performance-oriented battery electric utility vehicle in 2020 - the first of six new pure electric vehicles due by 2022 as part of Ford's planned $11 billion investment in electrification. "That vehicle is going to be famous without having to shoot it up in space," Farley said, alluding to the roadster Tesla CEO Elon Musk launched recently with one of his SpaceX rockets.
Ford will move the Lincoln brand's focus toward SUVs and electrified cars. Lincoln "is committing to electrification across its lineup globally," with new hybrid electric versions of its future models, Farley said. In the push to increase revenue from commercial customers, Ford will update its F-series Super duty pickups, launch the Ranger compact pickup and overhaul its large Transit van in 2019.
Phoenix dealer Tim Hovik said in an interview on Thursday he was "excited" by the prospect of the performance electric vehicle in 2020, but that the upcoming Bronco SUV was generating the greatest interest among his customers.
He also said "there will be demand" for a rumoured Raptor performance edition of the new Ranger compact pickup as a companion to the larger F-150 Raptor: "We're out here in the wild, wild west. The days' supply of F-series Raptors is about six hours." Joe Hinrichs, president of global operations, said Ford is cutting costs by reducing the time to develop new models by 20 percent, and by relying on just five new flexible vehicle architectures. Ford's new model preview is part of a broader effort to regain investor confidence after a turbulent year. Ford shares have lagged those of rival General Motors Co since Hackett was named CEO on May 22, 2017. Since then, Ford shares peaked at $13.23 in mid-January, then plunged to$10.14 in early March and have only recently begun to recover. GM stock has risen more than 14 percent during the same period. Its shares were up 0.5 percent at $37.89 on Thursday afternoon.