BackIndia will play a central role in achieving our sales goal: Mark Fields
Ford CEO Fields says the firm considers itself a mobility company, not just a car and truck company
Premium
Ahmedabad: Mark Fields may have played second fiddle to legendary chief executive officer (CEO) Alan Mulally in Ford Motor Co.’s turnaround, but as the storied company’s new CEO, he faces the formidable challenge of steering the Blue Oval through an era when it has to cope with an entirely new set of challengers such as Google Inc. and Apple Inc., with a very real possibility of Silicon Valley emerging as the new hub of the global automotive industry.
At the same time, he will also chase Ford’s dream of being one of the top five global companies by sales. In an interview, Fields listed the opportunities and challenges facing the industry—a growing middle class, an increase in the number of mega cities and the drying up of non-renewable energy resources. Ford, Fields added, has 25 experiments in what it calls smart mobility—from sharing rides to swapping vehicles. Edited excerpts:
The global automotive industry is changing very fast. What are the major trends that will define it?
First, the technology and the technological enablers that are available to the industry today are unlike they have ever been. I can foresee more technology in hardware and software.
The second trend that I see around the world is the continual requirement from customers for better fuel economy and (lower) emissions. The price of oil is down now, (but) it is a non-renewable resource. (Then there is) the air pollution in many parts of the world.
The third is the phenomenon that is making us think more like a mobility company than just an automobile company and that’s the number of trends around the mega cities around the world. Back in the 1950s, there were four cities with around 10 million people and today there are 28, and by our view, they will be upwards of about 40 in the next 15 years.
Another trend is the growth in middle class around the world. Today, it is more or less about two billion. In another 15-20 years, it could be double that. When people enter the middle class, one of the first things they do is they buy a car.
At the Consumer Electronics Show In Las Vegas in January, you spoke about 25 experiments that Ford is conducting. If you are successful in at least five or 10 of them, how will they change the way people move around?
First of all, the reason for doing these experiments is to learn and what we are going to do is to use the learning to help take the next step in defining the type of services around mobility that we would like to offer. Our founder, Henry Ford, was all about making mobility accessible to millions of folks. We are thinking around the same lines with these experiments. The purpose of doing these experiments is threefold. First is advancing the discussion around mobility. Second, it is exposing us to some terrific partners that we may want to work with. And the third is teaching us what the mobility challenges are in different parts of the world.
Give us a couple of examples of these experiments.
These are really bucketed into three areas—customer experience, flexible userships and social collaboration. In London, we are doing an experiment on micro-buses on demand.
Another experiment that we are carrying out in Bangalore is about flexible usership of vehicles. For example, our employees are sharing vehicles while going to work, but on weekends they want to go out camping and they need a bigger vehicle like a pickup truck, they have an app where they can call another employee, who has a bigger truck. On weekends, they can say, let us swap our vehicles.
Amid reports of Google and Apple’s desire to make cars, what is the way forward for traditional automobile companies?
We are thinking of ourselves as a mobility company and not just a car and truck company, and that does not mean we are going to start building buses and trains. All our vehicles going forward will have modems in them and they will be connected to Internet of Things.
What does that mean to us as a business? We are also thinking about doing a lot of research right now on fully autonomous vehicles. Right now, on board, we have semi-autonomous vehicles that use cameras and sensors, and things like that. We are not looking at them (the new challenges) as threats. We are looking at them as opportunities and say how do we get ahead of that and how do we provide solutions to that.
What we are really encouraging in our organization is to challenge customs and question tradition. Don’t take anything for granted. Use technology where we can. Focus on the customer experience and move fast and test and learn, and start all over again. It is not about us teaching the organization how to innovate, but allowing it to happen. That’s why it is such an exciting time in the industry and such an exciting time at Ford right now.
I don’t know what Apple is going to do, but it is very clear that there are new entrants in the automotive space. You can argue that on one hand, the differentiator could be being a first mover. Look at our SYNC system (Ford’s infotainment system); we are the pioneers when it comes to connectivity. We now have 10 million SYNC systems installed around the world. So, we have domain knowledge around connected vehicles. I think we have first-mover’s advantage with SYNC. (But) in some cases, just being fastest to market does not necessarily prescribe success.
We already have semi-autonomous vehicles on the road today that help customers in many ways. But for fully autonomous vehicles, we have a number of competitors who have made statements (about) being first in the autonomous space. But when we come out with our fully autonomous vehicle, we want to be true to our brand.
You worked with Alan Mulally, but you carved a niche for yourself as a tough taskmaster who shut down plants and cut jobs that helped turn the company around. Now, as CEO, the situation is different from 10 years ago. How do you take your job forward?
Going forward, it will be about accelerating towards those long-term objectives that we laid down—being in the top 5 in sales, having a better balance of share in profits geographically. We want to earn operating margins in the 8% and above range. We want our shareholders in the top quartile of what we call total shareholder returns. So, 10 years from now, I want Ford to be known as a healthy, vibrant and growing company, and when people think of smart mobility, they think of Ford and smiles come on their face.
How much do you think emerging markets such as India and China will contribute to the 2020 plan where you aim to increase your sales by 45% to over nine million units?
They will be big drivers. When you look at our projections of the growth of the industry through 2020, almost half of that growth will happen in China and India. We see the Indian market growing to seven million units by 2020. That’s why we are making investments in the plants and products. India is going to play a central role in achieving our goal of increasing our sales by the end of this decade by 45-50%.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
