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Ford will stop competing in overserved market segments and instead will place big bets on connected vehicles and digital services.
According to CEO Jim Farley, the days of Ford letting complexity “overrun its business as they tried to be all things to all people is over.
Farley described Ford as being “stuck in a box,” with thin profit margins, and weak growth. and low stock valuation.
Ford will now focus on software and services and iconic vehicles, such as pickup trucks, large SUVs, and commercial vehicles. and advanced second-generation electric vehicles.
Ford's F-Series pickups are the top-selling vehicles in the U.S.
To eliminate waste and close a cost gap with the best in the industry, Ford will implement a lean, disciplined operating system that reaches all factories.
By focusing on software, services, and Ford's best products, the company won't be as vulnerable to a downturn as in the past.
Farley says Ford will go for tailored ownership experiences rather than targeting market share slivers with complex vehicles in competitive segments such as two-row crossover SUVs.
The American carmaker will also cut costs by reducing vehicle parts and cutting warranty and recall expenses by boosting quality.
The company predicted it would sell 5.6 million vehicles in 2026 as global sales recovered. Ford sold around 4.2 million vehicles last year.
Ford also is focusing on the stability of parts supply companies.
Ford will also make its revamped electric vehicle manufacturing plants more efficient, with nearly 30% less labor overhead than the company's current large internal combustion vehicle plants.
Ford has split itself into three business units, Ford Blue, Ford Model e for electric vehicles and digital products, and Ford Pro, the company's commercial vehicle business.
