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Ford's Next Steps in European Strategy

Ford has officially unveiled the next chapter of its transformation in the European automotive market, strongly emphasizing both passenger and commercial vehicle segments. This new strategy hinges on two primary pillars: maintaining its leadership in vehicles and dedicated services for professional clients, while also expanding its lineup of electrified passenger vehicles.

The recent strategic partnership with Renault marks a significant milestone, enabling Ford to leverage Renault's expertise in electric vehicles alongside its own iconic design and road performance capabilities. This collaboration aims to deliver fun, innovative, and accessible vehicles, with a new generation of multi-energy vehicles expected to hit the market from 2028 onwards. These vehicles will synthesize Ford's dynamic qualities with a superior connected driving experience.

According to Jim Farley, President and CEO of Ford Motor Company, “As an American company, we see Europe as the forefront of the global transformation in the automotive industry. Our approach to competition, innovation, collaboration, and investment is paving the way for the next generation. We are committed to an exciting future in Europe, but this future demands accelerating our efforts at an unprecedented pace.”

Ford's strategy encompasses three core elements: optimizing its successful Ford Pro commercial vehicle lineup, enlarging its passenger vehicle offerings with new European models, and refining its industrial system to cut costs effectively. To sustain a profitable business operation in Europe, the upcoming phase will focus on a fresh range of affordable commercial and passenger vehicles designed specifically for European consumers, aimed at facilitating a smoother transition to electric mobility within an intensely competitive environment. New models are anticipated to supplement the existing product range by 2028.

Further, the partnership with Renault represents a vital step in expediting Ford's strategic plan, including agreements to develop two joint Ford-branded electric vehicles on the Renault Ampère platform, which are projected to enter the market in 2028. Ford will oversee design, engineering, and dynamic tuning to ensure these vehicles maintain Ford’s distinctive brand identity.

Additionally, the agreement includes exploring the development and production of light commercial vehicles utilizing shared platforms, enhancing scale economies to boost competitiveness.

This partnership merges the strengths, scales, and supplier networks of both companies, ensuring the necessary efficiency required to thrive in a competitive marketplace. Jim Baumbick, President of Ford Europe, stated, “Our plan is centered around unlocking the Blue Oval. We are looking towards strategic partnerships for growth, while maintaining a complete commitment to delivering exciting and enjoyable vehicles that stand apart from the competition.”

Ford Pro continues to be the driving force behind Ford’s European operations, providing a comprehensive software and service platform. Data-driven insights from billions of data points led to Ford’s predictive maintenance system, Ford Live Uptime, eliminating over 820,000 days of downtime for European businesses just in 2024. Ford's commitment to strategic partnerships has proven effective in the European market with collaborations like Ford Otosan and Volkswagen. Currently, Ford Otosan is acknowledged for its successful contributions to the commercial vehicle market, supported by investments in electric powertrains and advanced engine technologies.

Moreover, Ford’s alliance with Volkswagen highlights how synergies are amplifying results in both commercial and passenger vehicle domains. Electric vehicles arising from this collaboration are already rolling off the lines at the innovative Electric Vehicle Center in Cologne, Germany.

As Ford transitions towards multi-energy vehicles, it is reshaping its industrial activities in Europe to provide greater choice for customers. The Valencia plant will play a crucial role in expanding Ford’s passenger vehicle offerings.

In this context, Ford is also calling for constructive public policy alignment, advocating for realistic CO2 emissions targets to facilitate a sustainable industrial transition. Currently, the share of electric vehicles in Europe stands at 16.1%, falling short of the 25% necessary to meet the stringent CO2 reduction targets set for 2025.

Jim Baumbick added, “We must make electrification accessible for everyone and give customers the choice between fully electric or hybrid vehicles. This is about easing the transition for all consumers and businesses, stimulating demand instead of stifling it.”

Ford has proposed three steps towards a successful transition:
1. Align Goals with Reality: Tailoring CO2 reduction targets to match market adoption while providing a realistic 10-year planning horizon for automotive manufacturers. This includes allowing consumers to operate hybrid vehicles for longer periods to enact a smoother transition.
2. Encourage Transition: European manufacturers have invested heavily in electric vehicles. Government action should mirror this commitment with encouraging purchase incentives and a charging infrastructure extending beyond urban centers to rural areas.
3. Support the Professional Economy: Current utility vehicle policies place excessive economic burdens on the foundational sectors of the European economy, as only 8% of new vans are electric. High emission reduction targets unjustly penalize small and medium enterprises that contribute over 50% of the European GDP.

In conclusion, Ford aims to embrace the future while presenting innovative and accessible solutions amid a rapidly evolving automotive landscape.