Ford plans to move away from traditional cars

Posted on 4 Oct 2017 by Michael Cruickshank

US automotive manufacturer Ford Motor Company has announced a new plan to move away from making traditional cars in the future.

Ford is increasing its range of electric vehicles. Image courtesy of Ford.
Ford is increasing its range of electric vehicles. Image courtesy of Ford.

Instead, the company plans to follow many of their competitors and move into primarily manufacturing electrified vehicles and trucks.

Specifically, this will result in the company ending many of the sedan and SUV product lines which continue to use internal combustion engines.

This announcement was made just months after a change of leadership at Ford, with Jim Hackett taking over the role of CEO from Mark Fields.

Ford believes that through this realignment of their business they will be able to generate up to $14bn in cost savings.

Practically, these measures will include the company redirecting $7bn of capital from cars to SUVs and trucks, and slashing investment into internal combustion engines by one-third, which will be redirected into electrification.

Ford had earlier committed to building 13 new electric vehicles in the next five years and investing $4.5bn into electrification, something that will continue under the new business direction.

Moreover, the company will also offshore its manufacturing of the ‘next-generation’ Ford Focus to China as a further cost-saving measure.

Beyond these measures, Ford also plans to redouble its efforts to develop ‘connected’ cars, with a commitment for all new US models sold in 2019 to feature such connectivity.

These sudden moves away from traditional vehicles are all the more surprising given the history of Ford as the company which popularised mass-market internal combustion vehicles, with its famous Model T.

Nonetheless, Ford believes that the current market is changing and that it will need to introduce new technology in order to maintain its competitiveness.

“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally,” said Ford CEO Hackett.

“Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”

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