Ford plans to replace or “refresh” 70 to 90% of its vehicle lines by volume in North America, Europe and Asia Pacific and Africa by 2012, the Traverse City auto industry conference in Michigan was told today.
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By 2014, all models will have been renewed and well into next generation model cycles, Lewis Booth, Ford’s chief financial officer, said in a speech prepared for the 2009 Management Briefing Seminars.
He said Ford was on target to reduce structural costs by $14bn to $15bn compared with 2005 and had lowered new vehicle engineering costs by 60% and reduced new facility and tooling costs by 40%.
Deloitte’s North America equity research director Rod Lache earlier told the conference Ford could reach break even later this year if it maintained its current rate of cost reductions and market share gains.
Booth said Ford expects to build 680,000 vehicles on each core global platform within five years, up from 345,000 today. By 2012, 78% of global volume would be on core platforms, up from 29% in 2007.
The company is aligning its European (second generation) and North American (updated first generation) Focus lines and plans to start building the Europe-designed Fiesta in Mexico in 2010.
An unprecedented rollout of “high-quality, fuel efficient and safe vehicles” is expected to improve Ford’s global product average age by 20% by 2014, Booth said.
“As we reduce costs, manage cash and increasingly leverage our ‘One Ford’ global product plan, our critical priority is protecting and enhancing our new vehicle pipeline,” Booth said in Traverse City.
“In the worst of economic times, we are taking the actions necessary not only to strengthen Ford’s business but also to deliver world-class levels of product freshness globally.”
Global vehicle lines will also include the Turkish built Transit Connect (with all-electric option), as well as increased parts sharing and commonality.
Booth said 45% of Ford’s US vehicle this year is new or significantly freshened. New models include the 2010 Ford Taurus, Transit Connect, Fusion and Lincoln MKT.
“Within a few years, the Fusion and Mondeo mid-size cars will migrate to a common global platform, as will commercial vans.”
Ford’s European Transit is an ideal size for North America (its Mercedes rival is already assembled and sold there). First generation European Mondeos, with minor changes, were sold in the US from the mid-90s under both the Ford and Mercury brands but were criticised for tight rear seat space. The current third generation car is larger.
Ford group product development chief Derrick Kuzak said: “We are making fuel economy a reason to buy a Ford, and we are distinguishing ourselves as leaders in connectivity and unique consumer-friendly technologies.”
