Ford CEO Alan Mulally at Cobo Center Monday. (Daniel Mears / The Detroit News)
Ford Motor Co. is eyeing a future that includes smaller and less expensive vehicles to increase personal mobility and reach a greater number of consumers.
Ford’s CEO Alan Mulally, in a roundtable interview at the North American International Auto Show, said Tuesday that smaller cars like the Ford Fiesta and Ka, which is currently available in other markets outside the U.S., will comprise a larger share of the global auto industry, including the U.S., known for its affinity of sport-utility vehicles and pickups.
The reason: vehicles have become increasingly expensive in recent years — partially attributed to an increase in technology in those vehicles — which have priced some consumers, particularly those in Generation Y who grew up during the Great Recession, out of the market. But that could compromise profit margins, which on the backs of fully-loaded vehicles have ballooned to double-digits at Ford, though the automaker has consistently warned those profit margins will soften.
Mulally on Monday stressed the need for the industry to lower price points and make vehicles more affordable.
“We have to find a way,” he said. “All of our data say the economics are very, very important.”
Mulally said he expects to see a shift toward smaller vehicles here in the U.S., where many young consumers have put off car purchases because of languishing incomes and rising vehicle prices.
“I think over time, you’ll see even smaller cars in the United States,” he said. Mulally hailed Ford’s EcoSport subcompact crossover, and added that he envisions a day when that vehicle will be available for U.S. consumers.
“I think, in time, it’ll be here,” he said.
Mulally, who in late 2012 turned over most of his day-to-day responsibilities to chief operating officer Mark Fields, said he is spending an increasing amount of time on the subject of personal mobility.
“It's such an important part of the business going forward,” he said.
The 68-year-old CEO, who has made it a point to publicly push Ford’s expansion plans in China, on Tuesday pointed to Chongqing, China, which he refers to as “a small city” with 35 million residents, as an example where Ford can help increase mobility in a large, urban metropolis.
Mulally says Ford will continue to partner with big cities and their planning departments to work on personal mobility. He said he did not know how Ford would integrate a sweeping personal mobility strategy within the company.
“I know it’s going to mean something,” he said.
Ford has outlined a sustainability blueprint that projects by 2050, the company will have a comprehensive network consisting of “very different cars” that will communicate between themselves and the infrastructure around them.
Ford cites data that says by 2025, the number of mega-cities — urban areas of more than 10 million residents — will grow to 27 from 23, and will experience a range of social and environmental problems that relate to personal mobility.