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.
Expanding that lineup yet again.
A way to potentially help avoid obstructions in wet weather.
Increasing a bit compared to the past couple of quarters.
A massive project, but one certainly worth undertaking.
Most companies are transitioning workers back to the office, too.
While the overall market posted a sharp increase in issues.
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Last I heard, Ford and VW didn't get along. At all.
I know right? Apart from the Ranger/Awarok thing nothing happened.
“Consolidation” of what, specifically??
Precisely! This article has no meat.. in 2022 he said it would be a consolidation of Traditionals trying to compete with Novice EV makers. Now it seems it will be a consolidation of Novice EVs by each other or traditionals.
Its tomfoolery like when AOL bought Time Warner only to be made a subsidiary 8 years later. Its not real!
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
Most of those will be Asian and European failures. In the US, Nikolai, Fisker and Lordstown have already failed, Lucid and Rivian may have to merge.
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.
It wasnt true when he said it in 2022
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.
Hi speed sure.