Ford Moves to A New Development Strategy

The new five-year plan was presented by the executive vice president of Ford, Howe Tay-Tang, at the J.P. Morgan Auto. It involves abandoning the outdated One Ford strategy and another reduction in the number of platforms.

In 2006, Alan Malally, who was engaged in reanimation of Boeing, came to the post of head of Ford, who became the author of the previous One Ford strategy. A similar goal was set for him at Ford, which was on the verge of bankruptcy because of the onset of the crisis. The Malalli program was aimed at reducing production costs and unifying components, which led to a reduction in the number of platforms from 27 to nine.

By the way, Howe Tai-Tang in 2015 at a similar conference announced the launch of the second phase of the program, in which it was planned to further optimize production and reduce one more platform. But, the situation has changed – in 2017 the company was headed by James Hackett, who replaced Mark Fields. At the beginning of this year, Ford announced plans to abandon car models on the home market almost completely, and now all the details of the new plan are disclosed.

The manufacturer notes that the new plan is based on the a Ford strategy, although it is adapted to the current realities. We are waiting for another reduction in the number of platforms  instead of nine, there will be five. Four are designed for models with ICE,  one frame with a basic rearwheel drive and three with a carrying body,rear-wheel drive, front-wheel drive and commercial. The fifth platform, as you probably already guessed, will become the base for all Ford electric vehicles. In addition, 70% of the units of brand cars will correspond to the modular concept.

With the new strategy, the efficiency of the company is planned to be improved by 20-40%, which, presumably, will reduce for five years 25.5 billion dollars: 12 billion for the cost of materials, seven for engineering and development, five for marketing and sales. The time to develop new models is expected to decline by 20%.

It was also noted that by 2023, 60% of the company’s sales will be crossovers and SUVs, 29%  trucks and pick-ups and the remaining 11% will be on cars. In addition, most models will be presented in the most expensive and profitable market segments, while the available models of Ford will be developed jointly with partners. One of the first examples of such strategic cooperation was the Ford Territory crossover, which, in fact, is a rebuilt JMC Yusheng S330.

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