Kumar Galhotra, Ford
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Ford executives are leaning heavily on some of its most iconic vehicles to boost sales as U.S. automakers face falling demand, international tariffs and rising costs in a race to go electric.
In 2020, Ford is introducing a new Mustang-inspired, all-electric crossover vehicle and bringing back the Ford Bronco SUV, which was discontinued in 1996. The new Mustang-inspired EV crossover is expected to compete against Teslas Model X and upcoming Model Y crossovers as well as a growing number of other all-electric crossovers. Ford is also updating or redesigning some of its best-selling models such as the Explorer SUV, Escape compact crossover and, most importantly, Fords F-150 and Super Duty pickups through next year.
"This is an incredibly transitional period for us," Kumar Galhotra, Ford President of North America, said Tuesday while discussing the plans during a presentation at the J.P. Morgan Auto Conference.
A slide from Ford President of North America Kumar Galhotra during the J.P. Morgan Auto Conference on Tuesday detailed the companys upcoming model launches.
The updated pickups are expected to better position Ford against recently-redesigned pickups from Chevrolet and Ram Trucks that look to challenge Fords decades-long sales dominance in the segment.
Fords highly-profitable F-Series pickups accounted for 38% sales for the Blue Oval brand. The Dearborn, Mich.-based automaker sold 909,330 F-Series pickups last year in the U.S. – marking 42 years as Americas best-selling truck and 37 years as Americas best-selling vehicle.
The new products are part of an overall business restructuring led by Ford CEO Jim Hackett that includes cutting thousands of jobs, restructuring its European operations and exiting traditional passenger sedans.
Ford is about 18 months along on plans to invest $11 billion by 2022 in electric and hybrid vehicles. That includes an all-electric version of its F-150 pickup in the coming years and another truck with Amazon-backed Rivian, an EV-startup based outside of Detroit.
Jim Hackett, president and chief executive officer, Ford Motor stands outside the headquarters as they celebrate the production of the 10,000,000 Mustang on August 8, 2018 in Dearborn, Michigan.
Jeff Kowalsky | AFP | Getty Images
Galhotra declined to provide specific details of the upcoming models, however he said the Bronco will "be very distinctively Bronco" and the EV crossover will be "a very exciting, fast vehicle" with design and performance "unmistakably Mustang."
"Were in the middle of all these launches, as we speak, and we have several more coming in the near-future," Galhotra said. "What this does is it really, really drops the average age of our portfolio."
Aggressive fleet age
Refreshing the automakers portfolio is expensive but considered necessary to remain competitive. It essentially means newer models in showrooms to retain buyers and attract new customers.
Ford, according to Galhotra, will lower the average age of its product portfolio in the U.S. from 5.6 years in 2019 to 3.3 years in 2020. Its forecast to be 3 years by 2023. Thats being accomplished by cutting some unpopular sedans, including the Ford Taurus, and adding new models, according to Galhotra.
A slide from Ford President of North America Kumar Galhotra during the J.P. Morgan Auto Conference on Tuesday detailed the companys plan to lower the average of age of its vehicles.
"As most of you are aware, both revenues and margins are very highly-correlated to the average age of any [automakers] portfolio," he said. "Then weve put processes and capital in place to make sure we can maintain that very, very short cycle time and a very aggressive average age of portfolio for our products."
Following Galhotras remarks, Fords shares remained relatively unchanged after opening at $9.29 per share on Tuesday.
Fords stock has yet to rebound after falling below $10 per share on missed second-quarter earnings in late-July.