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Ford targets 9.4 million global sales by 2020

Green Fields: New Ford CEO Mark Fields will accelerate the ‘One Ford’ program that will see models such as the new Edge SUV pictured here replace the Australian-built Territory, which will be axed in 2016.

Mark Fields outlines ‘2020 vision’ for Ford including new Lincoln cars, Asia focus

3 Oct 2014

FORD Motor Company’s new president and CEO Mark Fields has delivered his ‘2020 vision’ for the American auto giant, which includes increasing annual global sales by up to 55 per cent to 9.4 million units before the decade is out.

As arch-rival General Motors also outlined its growth strategy this week – including a huge push behind Cadillac and a $US14 billion investment in China, taking its sales to five million a year in that market alone – Ford has similarly vowed to energise its flagship Lincoln brand, push further into Asian markets, accelerate its ‘One Ford’ platform-sharing strategy and increase sales of high-volume small cars and SUVs worldwide.

With Lincoln, the goal is to triple annual sales to around 300,000 units by 2020, particularly as the luxury brand debuts in China this year with the MKZ sedan and MKC SUV – and will follow that up with the MKX mid-size crossover next year and an “all-new full-size sedan”, probably the ‘MKS’ currently being secretly developed in Australia, by the end of 2016.

Ford has also confirmed another two still-to-be-revealed Lincoln models to be added by the end of the decade.

“Our long-term plan underscores the commitment we have to our One Ford plan, while accelerating our pace of progress, delivering product excellence and driving innovation in all areas of our business,” Mr Fields said.

“We remain completely focused on offering customers the freshest line-up of world-class vehicles to meet their needs.”

In conjunction with its rising sales, Ford projects its operating margin will improve to about eight per cent to 2020, with a long-term target of between eight and nine per cent.

It currently relies heavily on the North American market and its Ford Credit business, however the company will now strive for “more balanced geographic profitability” with a strong emphasis on Asia while it “continues transforming” its operations in Europe, South America and the Middle East and Africa region.

In an eerily similar strategy to the one just outlined by GM, Ford will focus on increasing the use of high-strength aluminium in mass-market vehicles – starting with the 2015 F-150 pick-up truck and moving next to the new-generation Super Duty – and will continue its focus on in-car connectivity and automated driving technologies.

Ford also says that “a shift in customer and regional trends” means that small vehicles will play a larger role in its product portfolio, with global models like Fiesta, Focus and EcoSport, and regional nameplates such as Figo, Ka and Escort, will comprise a greater percentage of sales.

That bodes well for Ford’s Australian-based Asia-Pacific product development centre, which will continue beyond the company’s exit from Australian manufacturing in 2016 and has played a key role in designing and engineering models for fast-growing markets, such as the Indian Figo and Chinese Escort.

As GoAuto has reported exclusively, the Victorian-based team is also currently working on the highly anticipated new-generation Taurus large car (pictured below) and derivatives that will be tailored for key regional markets such as China.

While GM plans to be down to 14 core vehicle architectures making up 75 per cent of its global sales volume by 2015, Ford is on track to have 99 per cent of its global sales built on nine platforms by 2016.

This year alone, Ford will launch a record 23 all-new or refreshed vehicles while next year it will conduct another 16 global vehicle launches, part of a plan to “refresh its global product portfolio one-and-a-half times through the end of the decade – an expected industry-leading refresh rate”.

Over the next six years, Ford also plans to generate positive automotive operating-related cash flow, with capital spending expected to increase to about $US9 billion ($A10.2b) – up from $US6.6 billion ($A7.5b) last year.

It now expects its 2014 pre-tax profit to be approximately $US6 billion ($A6.8b), while 2015 should be “significantly higher” – in the $US8.5b to $9.5b range – although it no longer expects to return to profitability in Europe next year, losing about $US250 million due to “continued volatility in Russia and higher pension expenses as a result of lower interest rates”.

“In 2015, we’ll take the next step in our long-term plan that calls for all parts of the Ford business to contribute to overall profitability,” said Ford’s chief financial officer Bob Shanks.

“Although we face a variety of challenges as we approach 2015, we are well positioned for long-term growth in all areas of the business.”

Ford projects total US market sales of between 16.8 million and 17.5 million next year, well behind China with a forecast 24-26 million but ahead of Europe, which the company expects will land somewhere between 14.8 and 15.3 million units.

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