Automaker Ford Motor is targeting $10bn in incremental material cost reductions and lower engineering costs by $4bn from planned levels over the next five years.
Ford’s newly appointed CEO and president Jim Hackett noted that the company needs to improve its operational fitness and refocus on capital allocation.
He said: “Ford was built on the belief that freedom of movement drives human progress. 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.”
As per the company’s new strategy, it plans to produce all of its brand’s vehicles with 100% connectivity. It also plans to introduce connectivity in China and other markets.
The company plans to boost its SUVs and trucks including the Ranger and EcoSport in North America and the all new Bronco globally. In the process, it said that it will relocate $7bn from cars to SUVs and trucks.
It also plans to reduce capital expenditure on internal combustion engine by one third and use that on electrification.
Apart from introducing new models and cutting back on old ones, the company will also explore strategic alliance with other automakers. Ford recently partnered with India’s Mahindra Group and China’s Zoyte to develop new range of low-cost all-electric vehicles. Ford has recently partnered with Lyft to work on autonomous vehicles.
Hackett said “When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally.
“Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”
The company claims that by using virtual assembly lines, it can save up to 25% of time spent on development processes. It also stated that it will use 3D printing, robotics, virtual reality tools and big data to improve its logistics and to make its manufacturing more efficient.
