Ford working to drastically cut vehicle configurations and options
On one side, the pandemic and its aftereffects have changed supply dynamics in several ways that automakers want to use to increase profit; encouraging more retail orders and cutting down on inventory, for example. On the other, automakers have huge bills coming up for the transition to electrified product lineups — bills so large that the OEMs are taking every step possible to bolster the balance sheet. Ford’s been talking about trimming vehicle complexity for a while, the rhetoric getting more frequent since the beginning of the year. During Ford’s Q2 earnings call, company CEO Jim Farley told analysts, “We do have a fresh lineup. We have lots of cool ideas, but we’re not satisfied with that because we cannot just continue to build this complexity in our business. So, as we add those derivatives, we’re going to have to, you know, we are planning much less complexity in our Blue business, and that is a theme that will run through Blue for years to come.”
Ford Blue is the ICE-powered product side, as opposed to Ford Model E, the EV side, and Ford Pro, the commercial side.
The product rationalization will not only be the long-lived event Farley describes, it will be drastic, according to comments from Ford CFO John Lawler. He told analysts at the 2022 Deutsche Bank Auto Industry Conference, “We could reduce the number of consumer options by 80 percent to 90 percent in many of our vehicles without sacrificing sales. That’s the key part. It’s just too complex and it’s just been the mindset that has been around the industry for way too long that you need the complexity to actually satisfy the consumer. Now, there’s a smarter way to do it.”
There are three angles to this, we don’t know how any will play out. Ford is eliminating options overall, meaning less choice for everyone. Customers who order vehicles and wait for them to be built will get the widest options among the narrower menu. Showing up at a lot to buy a car — the way most Americans have bought their cars for ages — will get the least choice. Cars Direct saw a Ford memo from earlier this year that spoke of “inventory reframing,” cutting configurations by up to 80%, and sending dealers only the best-selling vehicles and options for their regions.
After noting options recently eliminated on the 2023 Ford F-150 lineup, the 2023 Lincoln Corsair is the next example of what’s in store. Ford Authority reports the Escape’s luxury twin will lose its optional turbocharged 2.3-liter EcoBoost four-cylinder that can currently be had with on the Reserve trim. So far as we know, next year’s crossover will run with either the 2.0-liter EcoBoost four-cylinder or, on the Grand Touring PHEV trim only, the 2.5-liter four-cylinder and its two electric motors. It’s possible there’s a hybrid option on the way, picked up from the refreshed Escape range, but that’s not certain.
