Ford Authority

Ford Plans To Reallocate $7B In Capital From Cars To Trucks And SUVs

During Ford President and CEO Jim Hackett‘s strategic update to investors earlier in the week, the executive outlined the automaker’s plans to bolster profitability and maintain strong financial fitness in order to better ride out a US sales downturn while still being able to invest in promising new products and technologies.

Among the many strategy details shared by Hackett was a decision to reallocate $7 billion in capital from cars to trucks and SUVs, thereby catering to market demand and enabling US products like the Ford EcoSport subcompact crossover and Ranger mid-size pickup, along with global products like the forthcoming Ford Bronco full-frame SUV. Meanwhile, capital expenditures on internal-combustion engines will be reduced by one third, much of those resources going instead toward the $4.5-billion bet on electrification that Ford announced in late-2015.

Diverting resources away from cars and toward trucks and SUVs is hard to argue with. The Ford F-Series pickup has been America’s best-selling vehicle for 35 years in a row, and General Motors has demonstrated that the US still has an appetite for smaller trucks like the Chevrolet Colorado. Moreover, SUVs and crossovers claim a sizable market share, and their slice of the pie is only expected to increase in coming years, to the detriment of cars like the Ford Focus and Fiesta.

However, we’ve come to believe that Ford may want to focus even more attention on electrification. The automaker still doesn’t have a pure, battery-electric vehicle (BEV) outside of the slow-selling Ford Focus Electric, while General Motors just recently announced an onslaught of new BEVs slated to hit the street sooner than later, with two such models planned for introduction in the next 18 months, and an additional dozen-and-a-half by 2023. Granted, it could be that Ford’s more-gradual approach to expanding its use of electrification is the more prudent one, and the automaker has already announced a number of promising-sounding products, including a Mustang Hybrid, an F-150 Hybrid, and a 300-mile battery-electric crossover to be built in Michigan.

Ford has also officially confirmed that it is looking into forming a new EV joint venture with Chinese company Zotye Auto.

“Ford was built on the belief that freedom of movement drives human progress,” says Ford President and CEO Jim Hackett. “It’s a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world’s most trusted mobility company, designing smart vehicles for a smart world that help people move more safely, confidently and freely.”

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.

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