Ford: Gasoline cars are a growth business

CNN Business

When Ford CEO Jim Farley split the company’s passenger car business into two parts—one for electric vehicles and one for gasoline-powered vehicles—Farley put himself in charge of the electric vehicle business, a model called Model e’s department. The assumption of many industry observers is that the people who ran the gasoline-vehicle business had been tending to the dying technology in its final years.

Except it’s not dead, said Kumar Galhotra, president of Ford Blue, Ford’s internal combustion vehicle division. Instead, he said, it is booming.

“For those who may be nursing, I spend a lot of time and investment in expanding [production] The capacity of all our Ford blue cars,” told CNN Business. “So, for me, Ford blue is a growth story. ”

Basically, by gaining a foothold in the internal combustion engine arena, Ford is benefiting from customers who can’t get gas-powered vehicles from other automakers, even as Ford itself is rolling out new electric vehicle models.

]Ford just unveiled a new Mustang coupe, and it’s worth noting that it’s not electric or even hybrid.The new two-door Ford Mustang can All-gasoline power remains, Ford executives said, as the company hits its emissions targets with electric vehicles like the Mustang Mach-E SUV and plug-in hybrids like the Ford Escape PHEV. (Hybrids are also included in the Ford Blue division of the Galhotra.)

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

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

Unlike GM, which has publicly stated that it plans to sell only zero-emission vehicles by 2035, Ford has not set an end date for building and selling gasoline-powered vehicles. While Ford has had some success with electric vehicles like the Mustang Mach-E and F-150 Lightning, they are sold alongside gasoline-powered models in the same segment. Ford also sells hybrid and plug-in hybrid models, while GM has said it will move directly to electric vehicles.

Galhotra said Ford is focusing its gasoline vehicles on three main areas, covering all the models Ford sells. These are enthusiast vehicles like the Mustang and Mustang off-road SUVs, general-purpose SUVs like the Ford Escape and Explorer, and of course trucks like the F-Series and Maverick. Within those areas, Ford is still finding new niches to explore, like the Bronco and Maverick, a small truck that works like a car, he said. Both are recent models that Ford has not competed with before and are doing well.

“We can’t make enough calves,” Galhotra said. “We’re completely sold out.”

Most of the customers for the Bronco and the smaller Bronco Sport are new to Ford, he said. About 60 percent of Ford Bronco buyers have not recently owned a Ford. That’s close to the so-called “conquer rate” of Ford electric vehicles like the Mustang Mach-E and the Ford F-150 Lightning electric truck. But Ford has sold more than 75,000 Bronco and more than 71,000 Bronco Sports in the first eight months of 2022, while the Mustang Mach-E has sold around 26,000. Likewise, Ford has sold nearly 50,000 Mavericks, and most buyers of this small truck are also new to Ford.

To keep sales growing, Galhotra said Ford can continue to expand and extend its various model lines. The Bronco is already a line of vehicles, including the full-size Bronco SUV and the smaller Bronco Sport. Each comes with various special editions such as Heritage models. Ford has used a similar strategy successfully on the Mustang, creating a seemingly endless variety of variants, from the $27,000 4-cylinder Ecoboost Mustang to the $80,000 760-horsepower Shelby GT 500.

“I saw the potential for Maverick to one day be a family,” he said.

Obviously, at some point, gasoline-powered cars will be phased out, Galhotra allows.But it’s unclear when that will materialize, giving Ford a chance to gain sales from drivers as other automakers move to offering only electric vehicles It’s not ready to switch, Galhotra said.At the same time, Ford will of course also provide Choice of electric vehicles Who is ready, he said.

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