Ford has undergone a strategic shift due to fierce competition in the global automotive market. CEO Jim Farley acknowledged that cost-based competition with giants like Toyota and Hyundai in the affordable passenger car segment was unsustainable.
Ford CEO reveals the harsh reality
Farley described the discontinuation of iconic models like the Fiesta and Focus as a financial necessity, stating that while he was pleased to have produced these models in the past, Ford’s overall manufacturer identity included a margin of error due to its cost structures. With this admission, Ford has completely shifted its focus to emotionally appealing, high-profit margin specialty vehicles and commercial vehicles such as the Mustang, Bronco, and F-150.
This strategic shift led to a significant decrease in the brand’s sales volume while increasing efficiency in the overall revenue statement. Between 2013 and 2017, Ford sold 6.3 million vehicles annually, but saw its lowest level in 2021 with 3.9 million units. Current data shows sales hovering between 4.2 and 4.4 million units.
The company has narrowed its product range by gradually phasing out popular models like the Escape, Fusion, Taurus, and Edge. CEO Farley emphasized that the primary reason behind this decision was its inability to compete with Toyota and Hyundai in terms of cost discipline. Instead of chasing market share, Ford is now strengthening its brand image and profitability with high-impact models like the Bronco Raptor or the F-150 Raptor R.
This transformation in the automotive world reflects Ford’s effort to evolve from being merely a vehicle manufacturer into a lifestyle and performance-oriented brand. The company is minimizing risks, particularly in the face of fluctuations in the electric vehicle market and the superiority of Chinese manufacturers in battery technology, by relying on its strong pickup and commercial vehicle segments. Farley’s statements clearly indicate that Ford is shaping its future in a smaller but more profitable structure, marking the end of an era.
