-Ford is taking $ 7 billion from what it spends on cars and refocusing that capital on SUVs and trucks. That makes sense, especially in the United States, where people have been turning away from cars in favor of higher-riding vehicles. But it sounds as though North America’s share of that new investment will be a little more exciting than simply adding more car-based crossovers and calling them SUVs, especially for those who enjoy a good two-track.
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Jim Farley, Ford’s president of global markets, said that the automaker will play to its regional strengths as part of its future-product strategy. In North America, that means developing more nameplates in what he called the “authentic, off-road capable” category. “It’s really credible for Ford and a real opportunity for us to grow even faster,” Farley said.
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In press materials, the automaker noted that the redeployed capital will also go toward the new Ranger pickup (Ranger Raptor spy photo shown above) and EcoSport compact crossover for North America, as well as for the all-new Bronco globally. The Ranger will make its North American re-debut for the 2019 model year, and the Bronco will follow in 2020.
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In the car segment, Farley said Ford is repositioning products in some markets toward lower-volume, higher-revenue sub-segments. As an example, he pointed to the Focus, which will have all its production shifted to China but will still be sold in the United States. The Focus and Fiesta will both be moving upmarket in Europe.
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Ford will also reduce the money it spends on internal-combustion engines by a third and redeploy that capital to electrification. That’s on top of a previously announced $ 4.5 billion investment. The automaker plans to deliver 13 new electrified vehicles in the next five years, including F-150 and Mustang hybrids, a Transit Custom plug-in hybrid, a Ford Police Responder hybrid sedan, a hybrid autonomous vehicle, and a fully electric small SUV. It is also setting up a dedicated electrification team called Team Edison.
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As for other trucks, Farley said, Ford will double down on both its commercial vehicles, which will be the foundation of its mobility services, and on its stalwart F-series lineup.
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Outside North America, Ford will focus more on utility vehicles, as Farley said the company has found success there with “styled, on-road performance.” In Europe, the focus will be more on the asphalt-friendly “urban-utility products,” he said. And in Asia, specifically China, Ford will be expanding its utility lineup to include more in the value-driven “C-plus” segment as well as on larger, three-row SUVs.
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- Ford Introduces F-series Super Duty Limited, with a Price as Big as Texas
- The Ford Ranger Raptor Is a Thing! But Is It a Thing for Us? [Video]
- Ford’s Electrification Push Includes Plug-In Escape and Lincoln Navigator Hybrid
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Ford’s long-term goal is an 8 percent automotive operating margin (it was at about 6.7 percent in 2016). To do that, it will need to reduce costs, and part of the reduction will come from cutting its automotive-cost rate of growth by half through 2022. It will trim engineering costs by $ 4 billion by increasing the use of common parts across its full line of vehicles, while at the same time reducing order complexity. Overall, Ford will eventually have fewer nameplates, but no specifics were given at the investor event as to which of its current models might be put out to pasture.
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