Back in June 2022, Ford CEO Jim Farley stated that he believed that the rise of electric vehicles would force many traditional automotive manufacturers to consolidate, largely due to the sky-high costs of software and electric architectures, not to mention vehicles development costs, in general. Now, even as EV demand hasn’t quite taken off as previously expected – prompting many OEMs to scale back investments and planned expansions in that area – Farley believes that current market conditions are perfect for some major consolidation across the industry.
“We’re already seeing it regionally, right? In Japan, it’s happening,” Farley stated at the recent Wolfe Research Auto, Auto Tech and Semiconductor Conference. “I’m sure it’s going to play out very soon in China. They have to. It’s a huge price war. No one’s making any money in China. And there’s a lot of overcapacity. So I think the consolidation that we’ve always been talking about that never has really happened in our industry, we’re on the eve of that in certain regions.”
“And it’ll be cascaded by region. I think that’s pretty easy to see. I think the more likely scenario is partnerships. We learned a lot from Volkswagen. After 120 years, we have a lot of partnerships. Ford Otosan has been one of the stellar partnerships we’ve had. We’ve learned a lot about what works and doesn’t on partnerships.”
Ford has indeed enjoyed its fair share of partnerships over the years, with its VW-based relationship set to grow for the foreseeable future. However, even though Farley previously admitted that Ford has learned a lot from that automaker – especially how to scale EV production – he has also poured cold water on the possibility that it may wind up forging similar partnerships with other makes. Regardless, we nearly saw some major consolidation take place recently when Nissan and Honda considered a merger, but that deal ultimately fell through.
Comments
Last I heard, Ford and VW didn’t get along. At all.
“Consolidation” of what, specifically??
Consolidation is certainly coming. Too many auto companies are chasing after too few buyers and losing money. All that cash that poured into auto manufacturers over the past 10 years is about to go bust. Wasting all that money on an EV transition that didn’t happen has put a pinch on a lot of manufacturers’ bank accounts. We’ve seen several EV companies already go under. Nissan is clearly in dire trouble. Who is next? Who has assets worth buying?
You’re right I’ve been saying it for awhile now. the industry will either need to figure out to accept low volumes and high profit to survive. Which is difficult. Which technically has already happened and consumers are pushing back finally. With the average price being around $50k+ and interest rates above 5% it’s almost a mortgage payment. There’s more vehicles above $50k than there is less these days. Automakers have been enjoying low inventory and high profits but it won’t long term pay for future development
I realize a Camry cost about the same as it did 20 years ago but salary has not kept up with a housing or car prices. When I see a Camry cost 42k w a damn 4cyl I just laugh it’s disgusting to think about.
The EV push was a scam and a massive waste of tax dollars. GM, Porsche, Hyundai, Honda, Toyota all had massive breakthroughs with hydrogen and alternative fuel sources but the gov said hey stop that here’s a couple billion for to invest in giant Duracell batteries lol
FMC needs new leadership, Farley needs to be fired ASAP…
This guy is a real tool.
While I tend to agree with what you said, what he’s saying here is true.
Seeing it regionally … Cascaded by region … Can somebody say Word Salad ? Not for nothing this guy is the problem with Ford. Farley has to go.
Time to back track to what you do best. Your future is not in electric vehicles. Blue oval team needs to bring back their small coupes ,sedans, and hatchbacks, not cars & trucks that the public still looks at as a novelty and not affordable.
Just another rich mouthpiece attempting to cozy us up to the idea of further draining the industry in order to consolidate wealth and enable a monopoly.
Federal mandates forcing questionable investiments in a short time frame has been a major problem.
But, hey! We got this Train Station in Detroit where we spent near $1B restoring. ‘Cause, you know “trains” are the future.
Don’t forget the heavy investment being funneled into racing!
And Hydrogen, especially in Japan.
Mr Farley is intelligent enough that Mr Bill Ford & the Board continues to keep him around? What has he done to help Ford build quality? More recalls than any car & truck?
I have been buying mostly Ford products for over 50 years & their customer service has stood behind their products even beyond warranty when quality was the issue..It is clear to me that this leader needs to change or Ford rep will continue to decline. Better listListen to your customer base.
Could not agree with you more!
Ford is in DIRE need of a new CEO.
So does gm
Companies working together is nothing new. Ford and toyota in the 90s with minivans, chev and toyota, ford and yamaha, chevy and mercury marine, lincoln and Teksid. Ford and chev with transmissions
These are just the really obvious ones that I can recall off the top of my head. Its not new, and it makes sense. Look, I ran a tuning shop for years in a small market. I paid dearly for inventory due to low volume. I reached out to a shop in Ontario and asked if we could pool both of our orders so that we’d have buying power. At first, they were against working with a “competitor”, but as I explained to them – competitor or not, we are both still going to be buying these products, so why not improve both of pur margins amd, because we were working together, both of our business got a leg up of the competition in each of our respective markets. They saw the sense in this and it went very well for us both. I agree with Farley on this point.
Sorry for the typos. Wish I could edit comments for spelling and grammar!
Farley’s been right so far EVs are making Ford a ton of money and raising the average MSRP over 40 percent has really made the company rich.
…and if Ford continues to be run by Farley, it will be Ford that is absorbed into another automaker
Absolutely, Jim is doing what he does best. Deflecting responsibility from his own business mistakes.
Jim Farley is a follower and not a leader . He is not proactive he’s reactive. He has not been good for Ford. He’s a Mr. Obvious. Also Quality issues, EV strategic failures etc. Farley is not the guy to lead Ford Motor Company.
Bill Ford he’s the one protecting Jim to be fired, I’m sure HF is turning over in his grave … No one understand, huge quality problems, F-150 lost the best selling car in USA in 40 years, silly comments to the press frequently…
Ford is loosing blue collar and retired customers because they do not offer lower interest rates like Kia, Toyota, Nissan and VW. Ford no longer offers affordable priced cars, suv, and trucks. Farley is part of the problem.
In 2023 I financed my car thru Ford Credit at 1.9. Banks cant touch that. What are you talking about.
This Jim is so ridiculous, like to talk a lot, master in podcasts but as CEO a disaster, no one in Ford except Bill Ford still believe him what he say, no plan, no strategy, just a lot of rhetoric with no valid content ! And he always blames others for the company’s problems as if he hadn’t been the company’s CEO for years…
Until I can drive 500 miles, stop and charge my EV in 10 minutes, be able to run my heat or AC the whole trip I’ll get a horse before I’ll buy an EV!! Or walk.
You’ll have to move to China first, but BYD just announced it. It’ll be a long wait until Ford gets out of first gear with EV tech.
EVs are here, long term. With over 50% of new vehicles being sold in the world’s largest automotive market being EVs and some Euro markets EV sales hitting 25% to over 50%, it’s not a matter of “if” EVs are viable and cheaper than ICE cars, it a matter of “WHEN” they take over the market. If the US wants to lag behind the rest of the world, there won’t BE an American car company in 20 years.
Wrong.
As to your 50 percent… World wide yes, because China is included in that number, and a reminder China is a Communist Dictatorship!
You WILL DRIVE what you are told to. The large cities of over population are ripe and right for EVs as they have government forced infrastructure. As for the United States of America your statement is blatantly false. Only a small percent of major US cities on the east and west sea boards can use EVs as a primary source of transport. America is Vast ! 80 percent of Americans travel much further than the quotes of Average commuter travel . The EV lie that they are here and we must comply, is former government diatribe , copying the Dictatorship of places like China.
I’m not alright with that !
We also dont know the Chinese commute. People commute 150 miles a day where I am in the US. A Chinese commute may be 6 miles a day. EVs work then. EVs wont work in Texas commuting areas 200 miles one way.
The crippling UAW contract will put them under along with their DEI hiring policies
They deserve what is inevitable!
The UAW has zero to do with company CEOs that don’t respond to market needs, and instead focus on building what won’t work for 80 percent of Americans.
Remember, Union contracts are offered by the company, unions can’t and don’t control both sides of contract negotiations, the company proposes the work rules and pay, the union only can agree or not. If a company doesn’t agree, it doesn’t happen.
Henry Ford is turning over in his grave!
Henry Ford I was senile when he died…turning over in his grave means you have no idea what you are talking about.
They are burning Teslas? First they love EV”s ; Now they don’t love electric cars ? What does the left want ? Model t’s ,or Model A’s ; maybe Ford 32’s , so they can make hot rods !
Two years ago, there were close to 300 Chinese EV companies. Now there are 50. Or were last month. Still too many that produce similarly looking cars with similar techs.
This whole story is another Jim Farley, look at me and how I am the great Ford leader.
Jim has lead Ford into a worse situation than it’s ever be in before. From pushing a former government agenda of replace all vehicles with EVs , to outsourcing manufacturing of a former AMERICAN company to lands like Mexico , and China, to not building anything affordable by 60 percent of the American population , what were smaller cars for people starting out , to basically telling those buyers openly we don’t want your business, we want to sell big SUVs and Trucks to only people willing to pay top dollar for each vehicle sold. Openly having said they Will Make more per sale, instead of more profit from selling more vehicles, eliminates market groups entirely. A goal of 40 percent profit from each vehicle as Jim’s Dreams are , doesn’t sell Fords !
This from the company that invented mass building on Assembly lines so even the employees could afford the cars that they were building.
Today Jim Farley is Ford’s number one problem not its customers.
Jim’s focus is on greed not on properly building cars and trucks, that Americans want and will buy and can’t afford.
Legacy Auto is in a “Death Spiral”
Get rid of Farley and hire a car person,all he cares about are his shareholders!
All the recalls should be enough proof of that……
He wouldn’t know a proper car for the right customer if it fell on him, what a joke!