Ford Motor Company has outlined its 2020 vision, which includes plans to substantially increase its global vehicle sales and automotive operating margin, and achieve more balanced geographic profitability.
By 2020, Ford projects annual global sales to increase 45 to 55 percent to approximately
9.4 million. Its automotive operating margin is projected to improve to about 8 percent during the same period, with a long-term target of 8 percent to 9 percent.
“Our long-term plan underscores the commitment we have to our One Ford plan, while accelerating our pace of progress, delivering product excellence and driving innovation in all areas of our business,” said Mark Fields, Ford’s president and CEO. “We remain completely focused on offering customers thefreshest lineup of world-class vehicles to meet their needs.”
Ford anticipates that, by 2020, all five automotive business units and Ford Credit will contribute to the company’sprofitability.
Today, the company’s profits are more than explained by NorthAmerica and FordCredit, with growing profits inAsia Pacific, while it continues transforming its Europe, SouthAmerica and Middle East &Africa operations.
As it continues expanding in new regions, Ford is aggressively moving to match production to growing customer demand and achieve benefits of global scale. In addition, by 2020, the company projects its breakeven volume will be two-thirds of its wholesale volume.
By 2020, Ford Credit expects managed receivables to increase by about 50 percent.
Meeting customer demand
Ford’s 2020 vision is driven by the company’s confidence in its global product plans.Those plans focuson delivering a full family of vehicles that meet and exceed customer expectations in Ford’s four brandpillars — quality, green, safe and smart — across the world.
Ford will continue to be a leader in bringing new features to market and will seize opportunities to differentiate itself from competitors.Those vehicles will target a diverse set of customers, from valuebuyers in developing regions to luxury customers in the U.S. and China and truck and utility customers globally.
Ford, with the 2015 F-150, is the first automaker to use high-strength, military-grade aluminum alloys in the body of a mass-market vehicle and plans to expand its aluminum use to include the next-generation Super Duty.The use of aluminum allows Ford to maintain its truck leadership, improve capability anddurability across its entire lineup, and deliver better gas mileage.
Furthering the company’s emphasis on innovation, Ford will continue to grow its presence in Silicon Valley by expanding its PaloAlto Research and Innovation Center with a new focus and expanded talentfrom different industries and backgrounds. Ford will remain a leader in technology and will continue tofocus on the research and development of in-car connectivity and automated driving technologies, key components of Ford’s Blueprint for Mobility.
Ashift in customer and regional trends means small vehicles will play a larger role in Ford’s productportfolio. Global models like the Fiesta, Focus and EcoSport, and regional nameplates such as the Figo, Ka and Escort, will comprise a greater percentage of Ford’s sales.
Fuel-efficient and versatile sport-utility vehicles and crossovers, like the Edge and Explorer, will alsomake up a larger portion of Ford’s overall sales total, especially as those models become available innew regions.All segments will grow volume compared to today’s levels.
The company is on plan to have 99 percent of its global sales volume built on nine platforms by 2016 and is furthering its strategy by consolidating its long-term product plan to eight platforms.
The company will generate positive automotive operating-related cash flow throughout its planning period, and capital spending is expected to increase to about $9 billion annually, up from $6.6 billion in2013.
The end result: Ford plans to refresh its global product portfolio one-and-a-half times through the end of the decade — an expected industry-leading refresh rate.
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