How Ford Motor Company's Flexibility Is Becoming a Cornerstone for Success During Its Resurgence
For those of you Ford Motor Company investors attempting to keep abreast of the company's dealings, the last two weeks have been busy. Hopefully you didn't blink, because if you did you likely missed an entirely new development. America's second-largest automaker apologized and wrote checks to some of its consumers, exploded its dealership count in the world's largest auto market, took a stunning victory in a luxury competition, and also topped Toyota to become No. 1 on an annual list of Interbrand's "50 Best Global Green Brands".
That's not even half of it, seriously. Here are two more very important developments that emphasize how Ford's flexibility, in multiple ways, is becoming the key to the company's continuing resurgence.
Starting from the top
At a time when sales of crossover utility vehicles are exploding globally, perhaps Ford's most important event this week was the unveiling of its all-new second generation Edge.
Ford's 2015 Edge has a new global strategy. Source: Ford Motor Company.
Looking past all of the Edge's new technology features, premium options, and design upgrades, the Edge hasn't even turned 10 years old yet and it's about to make a huge leap onto the global stage with the 2015 model. Vehicles being designed for both the American and global audience is the new theme of Ford's impressive turnaround. Rather than remaining primarily a North American vehicle, the Edge will now be sold in 100 markets, and that could be a big deal.
As its sales footprint expands globally, that puts into perspective how important the vehicle's platform is. The 2015 Edge will again be produced on Ford's midsize global vehicle platform, the same platform the Fusion uses. That means the Edge could potentially be produced on the same factory line as the Fusion, including those abroad, with a few adjustments.
While Ford officials currently have no plans to produce the Edge abroad, keep in mind that the automaker does export some Edge crossovers to China, which are quickly sold off. Crossovers remain one of the hottest segments in the world's largest automotive market, China, and if the Edge catches on it could send sales through the roof -- which would make its flexibility to be produced in plants already producing the Fusion very fortunate.
In regard to vehicle flexibility, Ford is also introducing its premium "Titanium" trim package to the 2015 Edge. Adding the Titanium trim is a good move and allows Ford to pack more technology, sporty performance options, and safety features, which help juice transaction prices, revenues, and margins -- all while giving the consumer flexibility to purchase exactly what they want.
Here's another story that highlights a major change in Ford's strategy over the past few years.
A decade ago if you were asked which automaker would be producing an incredibly small yet powerful, fuel efficient, and internationally sold engine, would you have said Ford? Probably not, but that's exactly what Ford has accomplished. Its 1.0-liter EcoBoost engine was named the "International Engine of the Year", for an unprecedented third consecutive year, this week at an Engine Expo in Stuttgart, Germany.
If you're keeping a running tally of major awards taken by the 1.0-liter EcoBoost engine, then you've tallied 13 victories in its short lifetime. The engine helps power certain models of Ford's Focus and Fiesta, ranked as the world's best-selling vehicle and best-selling subcompact nameplates in 2013, respectively.
Just as important as Ford's 1.0-liter engine, is the success of the automaker's other EcoBoost options right here in the company's profit driver, the United States. The automaker's three best-selling vehicles in the U.S., the F-150, Fusion, and Escape have a 42%, 52%, and a staggering 89%, take rate for the turbocharged engine -- it's a hot option.
Ford's all-new 2015 Mustang is a prime example of how the company's "One Ford" plan and flexibility is gearing the company up for more global success. Not only is Ford's pony car galloping onto the global selling stage for the first time, it's also the first chance for consumers to get the iconic ride with a turbocharged EcoBoost engine. While loyal muscle car fans may scoff at the idea, Ford's flexible engine lineup means that muscle car loyalists can have their V8s, while the new EcoBoost engine provides a powerful and fuel-efficient option that will open the doors to an entirely new consumer, both in the U.S. and worldwide.
The automaker's impressive resurgence since the depths of the recent recession goes much further and deeper than its vehicles going global, or a new lineup of engines -- but it's clear that Ford's flexibility, be it in production location or with additional consumer options, will be a driving force for the automaker's success going forward. That's good news for consumers and investors alike.
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The article How Ford Motor Company's Flexibility Is Becoming a Cornerstone for Success During Its Resurgence originally appeared on Fool.com.Daniel Miller owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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