Ford Motor is striving to build smart vehicles for a smart world. One of the “Big Three” automakers in the US (with GM and Fiat Chrysler), the company manufactures cars, trucks, and SUVs under the Ford and Lincoln brands – the F-150, the Escape, and the Fusion among its most popular models – and finances sales through Ford Motor Credit. Ford, which does business worldwide, is making significant investments in line with a strategic shift to move it from solely an automaker to a leader in vehicle technology and mobility services.
Ford’s Automotive segment represents more than 90% of revenue and includes the sale of Ford and Lincoln brand vehicles. The Financial Services segment contributes more than 5% of revenue and includes vehicle-related financing and leasing through Ford Motor Credit Company; outside the US, Europe is Ford Credit’s largest operation with nearly 60% of that region's receivables in the UK and Germany
Other operations include Central Treasury (which manages the company’s investment portfolio) and the growing Ford Smart Mobility (which invests in emerging technologies).
Ford's business units span the five regions of North America, South America, Europe, the Middle East and Africa, and Asia-Pacific. More than half of its 60-plus plants are in North America with about 25% in Europe.
The US accounts for more than 60% of Ford's revenue; other major markets include the UK, Canada, and Germany, each accounting for about 5% of sales.
Sales and Marketing
Ford's vehicles, parts, and accessories are sold through more than 11,000 dealerships worldwide, most independently-owned. In addition to retail sales, these dealerships sell vehicles to commercial fleet customers, rental car companies, and governments.
Ford has seen strong growth for four consecutive years since 2013, with revenue up nearly 9% over that time. The company’s total revenue for 2017 hit $156.8 billion, an increase of more than 3% from the previous year. The Automotive segment was up about 3%, with Asian sales up 17% (powered by strong growth in China and India). Financial Services revenue jumped more than 8% compared with 2016.
Net income increased to $7.6 billion, a $3 billion increase from 2016 due a much lower tax pension remeasurement loss.
Cash at the end of fiscal 2017 was $18.5 billion, an increase of $2.6 billion from the prior year. Cash from operations contributed $18.1 billion to the coffers, while investing activities used $19.4 billion, mainly for capital spending for product development, restructuring, and company infrastructure. Financing activities used another $3.4 billion for dividends to stockholders and the company's stock repurchase program.
After an evaluation of its operations in 2016, Ford has several initiatives in place to increase efficiency, cut costs, and increase profits. The company plans to update factories, speed up product development and facilitate decision-making within the management ranks with fewer direct reports to the CEO.
In an effort to cut materials costs by $10 billion by 2022, Ford is making new deals with suppliers, simplifying its designs and available options, and sharing parts between vehicles.
With increased demand for SUVs and trucks, Ford is reallocating $7 billion to support production of those vehicles. The company's F-150 truck has been the best-selling model in the US for decades; it is offering a diesel F-150 in 2018 and has plans for a hybrid version. Ford also plans to add the midsized Ranger to its North American pickup portfolio.
In other areas of its automotive business, Ford has boosted its luxury Lincoln brand with a new Continental and an aluminum-body Navigator. It has also launched a smaller, value model, the India-made KA+. In 2017 Ford announced plans to introduce 15 electric or hybrid vehicles in China (the world’s biggest auto market) by 2025.
Ford is also making huge investments in emerging opportunities such as electrification, autonomy, and mobility. In addition to new electric vehicles models and hybrid versions of existing models, the company is expanding its test fleet of 30 autonomous vehicles and has begun testing in Europe (it plans to have a fully autonomous vehicle in commercial production in 2021). A 2017 partnership with Lyft ride sharing service and a $1 billion investment in artificial intelligence startup Argo AI will pave the way for the development of software for self-driving vehicles. Ford is also working on establishing its Transportation Mobility Cloud, an open, cloud-based platform to manage a city’s transportation ecosystem.
Mergers and Acquisitions
In late 2018, Ford purchased San Franciso-based electric scooter startup company, Spin, for $100 million. The wildly popular stand-up electric scooters will expand the portfolio of Ford's Smart Mobility division, which is focused on piloting new transportation products and services.
Also in 2018, Ford agreed to acquire two transportation software companies, Autonomic and TransLoc – part of its plan to speed up the development of new products such as microtransit services and self-driving cars.
Ford's $65 million acquisition of app-based, crowd-sourced shuttle service Chariot (completed in 2017) is allowing it to use data algorithms to schedule trips in real time. Chariot uses 100 Ford Transit 15-seat vans; its 28 routes have been based on demand from riders. Ford is expanding the service from two cities (San Francisco and Austin) to eight, with at least one outside the US.
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Employer Type: Privately Owned
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