Ford will speed shift to SUVs to boost profit, shares
FILE PHOTO: A Ford worker inspects paint work on the body of a Ford Expedition SUV at Ford's Kentucky Truck Plant as the No. 2 U.S. automaker ramps up production of two large SUV models in Louisville, Kentucky, U.S., February 9, 2018.
REUTERS/Nick Carey/File Photo
DEARBORN, Mich.: Ford Motor Co executives on Thursday 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 shares were down 0.5 percent at US$10.97 early on Thursday afternoon.Jim Farley, Ford's president of global markets, said the automaker plans to shift US$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 US$41 billion in revenue last year - about 28 percent of Ford's total US$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 center 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 US$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.(Reporting by Paul Lienert and Joseph White in Detroit; Editing by Matthew Lewis)
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