Speaking at the Further with Ford 2016 conference at the automaker’s Michigan headquarters in September, CEO Mark Fields insisted that, “the world is changing very quickly,” moving from owning vehicles to sharing them. Ford is revising its business model to focus not just on how many cars it sells, but what services it should offer.
“It’s not about moving from an old business to a new business. It’s moving to a bigger business”
Mark Fields, CEO, Ford Motor Company
The creation of its Ford Smart Mobility subsidiary in March 2016, which former 3M executive Raj Rao has been hired to run, aims to position the company as a leader in autonomous driving, connectivity, data analysis and, above all, customer experience in the mobility space.
“It is all about being a consumer-focused company and maintaining our relevance,” asserts Mike Nakrani, director of global business associations. “Cars will remain important, but fewer people want them like they used to. Millennials we talk to are interested in what cars can provide. That may not be ownership, but using one when they wish to.”
According to Nakrani, Ford controls about six percent of the traditional auto segment, worth $2.4 billion a year. But the total mobility sector is worth around $5.4 billion, making it a much larger profit opportunity if the company can achieve a similar share of the marketplace.
“The more a car can do, the better,” Nakrani says. “More is going to happen in cars, which is a big focus of our research. Connectivity is massive; IoT is a huge space. The car is one of the most personal devices we have right now. It knows where you are going and where you have been. There are ways of enabling it to do so much more. People need to figure out what they want it to know. Automakers need to think beyond the car too; the market is really about the miles people travel.”
