Ford: Gasoline cars are a growth business.




CNN Business

When Ford CEO Jim Farley split the company’s passenger vehicle business into two — one for electric cars, the other for gasoline-powered vehicles — Farley positioned himself to lead the electric car business, a division called the Model E. The assumption among many industry observers was that whoever ran the gasoline vehicle businesses was there to nurture the dying technology in its final years.

Unless it’s dying, said Kumar Galhotra, president of Ford Blue, Ford’s internal combustion vehicle division. On the contrary, he said, it is increasing.

“For someone who is a nurse, I’m spending a lot of time and investment in expanding. [production] “We have capacity for all of our Ford Blue cars,” he told CNN Business. “So to me, Ford Blue is a growth story.”

Basically, with a foot firmly in the internal combustion world, Ford itself is benefiting from customers losing access to gas-powered vehicles from other automakers when Ford releases new EV models.

]Ford just unveiled a new Mustang coupe that, specifically, isn’t electric or hybrid. The new two-door Ford Mustang did. That’s because the company is meeting its emissions goals with the help of electric vehicles, like the Mustang Mach-E SUV, and hybrids like the Ford Escape PHEV, according to Ford executives. (Hybrid species are also included in the Galhotra Ford blue division.)

But there is a market for internal combustion-powered performance, and Ford is determined to serve customers who still want that, Galhotra said. Meanwhile, Stellantis has announced that it will end production of the Dodge Challenger coupe and its closely related Dodge Charger in 2023.

“In this particular segment, in the Mustang, even though the segment may shrink, there is a lot of speculation that our competitors may leave this segment,” he said. “So even though the industry is shrinking, we can grow.”

Unlike GM, which plans to sell only zero-emissions vehicles by 2035, Ford has not set a date to end the production and sale of gas-powered vehicles. While Ford has had some success with electric vehicles like the Mustang Mach-E and F-150 Lightning, they sell in the same market segments as gas-powered models. And while Ford sells hybrid and plug-in hybrid models, GM says it will jump straight to EVs.

Galhotra said Ford is assembling its gas-powered vehicles into three broad areas that include the models it sells. These are off-road SUVS like the Mustang and Bronco, general-purpose SUVs like the Ford Escape and Explorer, and of course, enthusiast vehicles like the F-series and Maverick. In these areas, Ford says it’s still finding new areas to explore, like the Bronco and Maverick, a small truck with car-like engineering. Both the recently introduced models are in segments Ford has not been competitive in before and are doing well.

“We can’t make enough Mavericks,” Galhotra said. “We are completely sold out.”

Most customers for the Bronco and the smaller Bronco Sport are new to Ford, he said. 60% of Ford Bronco buyers have not owned a Ford recently. That’s close to the so-called “win rates” for Ford electric vehicles like the Mustang Mach-E and the Ford F-150 Lightning electric car. But Ford sold more than 75,000 Broncos and 71,000 Bronco Sports in the first eight months of 2022, compared with 26,000 Mustang Mach-Es. Likewise, Ford sold about 50,000 Mavericks and most buyers for that small car were also new to Ford.

To keep sales growing, Galhotra said, Ford can continue to expand and diversify its model lines. The Bronco is already a family of models, including the full-size Bronco SUV and the smaller Bronco Sport. Each has special editions such as heritage models. Ford has successfully used the same strategy with the Mustang, creating seemingly endless variations, from the $27,000 4-cylinder EcoBoost Mustang to the $80,000 760-horsepower Shelby GT 500.

“I see that Maverick has the potential to be a family one day,” he said.

Apparently, once upon a time, gasoline-powered vehicles, Galhotra, were allowed. But it’s not entirely clear when that will happen, and as other automakers shift to offering only electric vehicles, Ford has the potential to take sales away from drivers. He is not ready to make the switch, Galhotra said. At the same time, of course, Ford also offers For those electric vehicle options He said, “Who are they who are ready?”



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