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CNN Business
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When Ford chief executive Jim Farley split the company’s passenger car business into two parts — one for electric vehicles, the other for gasoline-powered vehicles — Farley put himself in charge of electric car business, a division called Model e. The assumption among many industry observers is that the man who runs the gasoline vehicle businesses, then, is there to nurse the dying technology into its final years.
Except it doesn’t die, said Kumar Galhotra, president of Ford Blue, Ford’s internal combustion vehicle division. On the contrary, he said, it is booming.
“For someone who might be a nurse, I spend a lot of my time and investment in expansion [production] capacity for all of our Ford Blue vehicles,” told CNN Business. “So, for me, Ford Blue is a growth story.”
Basically, by keeping the internal combustion world stable, Ford benefits from customers losing access to gas-powered vehicles from other automakers even as Ford, itself, releases new models. of EVs.
]Ford just showed off a new Mustang coupe that, remarkably, isn’t electric or even hybrid. The new two-door Ford Mustang did remain all-gas-powered, Ford executives said, as the company meets its emissions goals with the help of electric vehicles, such as the Mustang Mach-E SUV, and plug-in hybrids such as Ford Escape PHEV. (Galhotra’s Ford Blue division also includes hybrids.)
But there remains a market for internal combustion-powered performance, and Ford has decided to serve customers who still want that, Galhotra said. Meanwhile, Stellantis announced that it will stop making the Dodge Challenger coupe and the closely related Dodge Charger in 2023.
“In this particular segment, in the Mustang, even though the segment may shrink, there is a lot of speculation that our competitors may leave this segment,” he said. “So even if the segment in the industry is shrinking, we can grow.”
Unlike GM, which has publicly stated that it plans to sell only zero-emission vehicles by 2035, Ford has not set an end date for the production and sale of gas-powered vehicles. While Ford has had some success with electric vehicles like the Mustang Mach-E and F-150 Lightning, they sell alongside gas-powered models in both market segments. And Ford also sells hybrid and plug-in hybrid models, while GM says it’s going straight to EVs.
Ford focuses its gas-based vehicles on three broad areas that cover all the models Ford sells, Galhotra said. These are enthusiast vehicles like the Mustang and Bronco off-road SUVs, general-purpose SUVs like the Ford Escape and Explorer and, of course, trucks like the F-series and Maverick. Within these areas, he said, Ford is still finding new niches to explore, such as with the Bronco and Maverick, a small truck with car-like engineering. Both have recently introduced models in segments that Ford did not compete in before and are doing well.
“We can’t make enough Mavericks,” Galhotra said. “We are completely sold out.”
The majority of customers for the Bronco and the smaller Bronco Sport are new to Ford, he said. About 60% of Ford Bronco buyers have not recently owned a Ford. That’s close to the so-called “conquest rate” for Ford electric vehicles like the Mustang Mach-E and Ford F-150 Lightning electric truck. But Ford has sold more than 75,000 Broncos and more than 71,000 Bronco Sports in the first eight months of 2022 compared to about 26,000 Mustang Mach-Es. Similarly, Ford sold nearly 50,000 Mavericks and most buyers for that small truck were also new to Ford.
To maintain sales growth, Galhotra said Ford can continue to spend and expand its various model lines. The Bronco is now a family of models, including the full-sized Bronco SUV and the smaller Bronco Sport. Each also has various special editions such as the Heritage models. Ford successfully used a similar approach with the Mustang, creating seemingly endless variants, from the $27,000 4-cylinder Ecoboost Mustang to the $80,000 760-horsepower Shelby GT 500.
“I see the potential for Maverick to, one day, become a family,” he told wha.
Clearly, at some point, gasoline-powered vehicles will be phased out, Galhotra allows. But not everyone is clear on when that will be and, as other automakers move toward offering only electric vehicles, Ford has an opportunity to take sales away from drivers. not ready to make the switch, Galhotra said. At the same time, of course, Ford will also offer electric vehicle options for those who is ready, he said.
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