The automotive industry is in the midst of some major changes as EVs continue to slowly take over. Now, with Tesla joining the S&P 500 and a host of upstarts attempting to replicate its success, legacy automakers like Ford are working overtime to design and produce competitive all-electric products like the 2021 Ford Mustang Mach-E. Thus, we found this recent interview CNBC‘s Squawk Box conducted with former Ford CEO Mark Fields to be very informative.
Squawk Box was particularly interested to hear what Fields thought 2021 has in store for the automotive industry, and needless to say, his outlook is rather positive. “I think for 2021 you’re going to see an industry that’s going to be up probably in the neighborhood of about 10 to 12 percent versus this year,” Fields said.
That’s a pretty solid recovery from this year’s results thus far, which have been marred by the COVID-19 pandemic. But Fields believes a couple of factors will help it achieve those results. “As you know, retail sales have snapped back pretty well. But what has kind of dragged down the industry this year, particularly since COVID, is fleet sales – they basically turned off.”
As Mark Fields points out, however, fleet sales have begun to rebound in the last month or so, particularly for the Detroit Big Three automakers. Other reasons for optimism include low-interest rates, a strong housing and truck market, more government stimulus, and the arrival of a COVID-19 vaccine.
Plus, thanks to the pandemic, fewer people are using public transportation and ride-sharing services and might be looking to purchase vehicles instead. However, Fields does see a couple of challenges that automakers must overcome to achieve this rebound. The biggest challenge is inventory, and Fields believes that automakers will struggle to produce enough vehicles to meet demand for at least the first half of 2021.
Another challenge is getting police departments and local municipalities to buy fleet vehicles again, something that has tapered off as budgets shrink. The same principle applies to rental car companies, who have seen their businesses decimated by the pandemic. Altogether, it’s good information and a pretty accurate look into the challenges the auto industry faces as we head into the new year.
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Comments
The Ford line up is just fine Lincoln on the other hand hopefully will see some of the greener pastures Mark Fields is talking about A AWD Zephyr 400hp $50k-$70k, A 5.2SC Blackwood and EV model $90k-$140k and A RWD EV Continental suicide 2 and 4 door $100-$150 flagship models
I have own 4 Mustangs 2 at the moment they are just fine. Even though I like them the Pony Car don’t need to be the size of a Dodge Challenger. When it comes to F150 and Mustang, Ford gets it right
I agree…I would keep the Mustang as a niche market vehicle. Ford is a large enough manufacturer that they can afford to have one “fun” vehicle in their lineup in this market. Plus, these vehicles mean as much to the manufacture as a marketing/public relations device helping leverage sales of other vehicles in their line up. I certainly wouldn’t have an issue if the power train changes to electric at some point, as long as it’s a purpose built performance vehicle.
The F 150 and the Mustang are so woven into the fabric of the company, with each carrying such a legacy, that doing away with them, could compromise how the consumer base views the company. Nothing brings this home to me more, than when Honda this past year with their TV commercials, referred to their products as “people movers”. Doesn’t exactly instill any degree of excitement in looking over their line, when this is how they refer to their products…about as exciting as any other appliance.
I also love my Focus ST which one would think would embody some of the characteristics mentioned above, fun, efficient, four passenger capability, utility, etc., but clearly this market has shifted it “focus” to big heavy SUV’s, most without any personality or enjoyable “driving” aspects.
I enjoy the act of driving and occasionally even tracking my Mustang and will for the foreseeable future. If one is just concerned primarily about utility, and moving bodies around, I think a shift toward those absolutes would be dangerous. For those who care about the driving experience, and are not sold on the self driving car movement, please read, “Why We Drive”, by Matthew Crawford. His book does a great job of explaining why we have to be very careful moving toward viewing our transportation as “people movers” or “destination appliances”.