Bill Ford on the Future of Transportation: We Can’t Simply Sell More Cars

The Wall Street Journal

Dur­ing the past decade, the auto­mo­tive indus­try emerged from one of the most chal­leng­ing peri­ods we have ever encoun­tered, and has now entered one of the most excit­ing and promis­ing times in our his­to­ry. Yet, even more impor­tant is our focus on the future, which will be defined by an impor­tant trend: the auto­mo­bile as part of a larg­er ecosys­tem.

This requires a change in our view of the car as an indi­vid­ual object to see­ing it as part of our broad­er trans­porta­tion net­work. It also requires a fun­da­men­tal change in how we think about trans­porta­tion. Cus­tomers today have extreme­ly diverse pri­or­i­ties, and we must embrace these dif­fer­ences as we design and sell auto­mo­biles.

The facts that under­pin this trend are com­pelling. With a grow­ing glob­al pop­u­la­tion and greater pros­per­i­ty, the num­ber of vehi­cles on the road could exceed two bil­lion by mid­cen­tu­ry. Com­bine this with a con­tin­u­ing pop­u­la­tion shift toward cities, with a pro­ject­ed 54% of the glob­al pop­u­la­tion in cities by 2050, and it becomes clear that our cur­rent trans­porta­tion mod­el is not sus­tain­able. Our infra­struc­ture can­not sup­port such a large vol­ume of vehi­cles with­out cre­at­ing mas­sive con­ges­tion that would have seri­ous con­se­quences for our envi­ron­ment, health, eco­nom­ic progress and qual­i­ty of life.

Challenge—and Oppor­tu­ni­ty

The good news is that this sce­nario is not inevitable, and some experts say this chal­lenge rep­re­sents a $130 bil­lion busi­ness oppor­tu­ni­ty for the auto­mo­tive mar­ket. Some solu­tions already are under way to devel­op more space-effi­cient vehi­cles with clean engines that run on gas or alter­na­tive ener­gy sources. Yet oth­er answers will require a fun­da­men­tal rethink­ing of what the busi­ness of being an auto man­u­fac­tur­er looks like. No mat­ter how clean and effi­cient vehi­cles are, we sim­ply can­not depend on sell­ing more of them as they func­tion today. Cars will need to be smarter and more inte­grat­ed into the over­all trans­porta­tion sys­tem.

For­ward-look­ing com­pa­nies will rede­fine them­selves and move from being just car and truck man­u­fac­tur­ers to become per­son­al-mobil­i­ty com­pa­nies. We will be think­ing more intel­li­gent­ly about how the vehi­cles we build inter­act with one anoth­er and with a city’s infra­struc­ture, which includes trains, pedes­tri­an walk­ways, bus­es, bikes and every­thing else that helps us move through urban cen­ters.

Rapid­ly chang­ing pref­er­ences among car own­ers, includ­ing an ever-increas­ing empha­sis on con­nec­tiv­i­ty, will rede­fine the types of vehi­cles we bring to mar­ket, the fea­tures we focus on and how vehi­cles are mar­ket­ed and used.

New Own­er­ship Mod­els

The rise of com­pa­nies such as Lyft, Uber and Zip­car under­lines indi­vid­ual own­er­ship as not always being the most cost-effec­tive way to obtain access to a vehi­cle, espe­cial­ly for urban cus­tomers. Indi­vid­ual own­er­ship also may not be the pri­ma­ry mod­el of vehi­cle own­er­ship in the future. Just how this affects the cur­rent sales mod­el is yet to be seen.

Cars of the future will be mobile com­mu­ni­ca­tions plat­forms that talk to each oth­er and the world around them to make dri­ving safer and more effi­cient. They will be inte­grat­ed into the trans­porta­tion ecosys­tem in ways that opti­mize the entire sys­tem, with soft­ware that allows own­ers to increas­ing­ly cus­tomize fea­tures and func­tions. We already are in the ear­ly stages of this trans­for­ma­tion, with wire­less com­mu­ni­ca­tion, info­tain­ment sys­tems and lim­it­ed func­tions for auto­mat­ed dri­ving and park­ing.

Con­tin­u­ing to meet con­sumer demand for greater effi­cien­cy also will require more than just changes to engines and ener­gy sources. New mate­ri­als and man­u­fac­tur­ing process­es will reshape auto man­u­fac­tur­ers and the sup­pli­ers we have worked with for decades.

Alu­minum and high-strength steel will evolve as the mate­ri­als that serve as the back­bone of the indus­try. Car­bon fiber will move from the realm of race cars and mil­lion-dol­lar exotics into small cars and crossovers. This will require rethink­ing the life-cycle sup­ply chain.

Redefin­ing Dri­ving

We also will need to rethink what defines the act of dri­ving. Autonomous dri­ving, or cars that nav­i­gate them­selves, will be pos­si­ble, and in cer­tain sit­u­a­tions, com­mon prac­tice. We already are see­ing some of this make its way into vehi­cles to pro­vide safer and eas­i­er dri­ving. As these tech­nolo­gies devel­op, we expect they sig­nif­i­cant­ly will extend the use­ful dri­ving life of indi­vid­u­als and offer new oppor­tu­ni­ties for the phys­i­cal­ly chal­lenged. Some entre­pre­neurs are even push­ing cur­rent bound­aries fur­ther by explor­ing the fea­si­bil­i­ty of fly­ing cars. While these would require sig­nif­i­cant reg­u­la­to­ry devel­op­ment to become a viable option, they do pro­vide a glimpse of what our future of mobil­i­ty may look like.

All of this serves as the back­drop to how we think about Ford Motor Co. today. Hen­ry Ford rede­fined mobil­i­ty for aver­age peo­ple, and we have the oppor­tu­ni­ty to do the same now. The next 20 years will see a rad­i­cal trans­for­ma­tion of our indus­try, and will present many new ways of ensur­ing that my great-grandfather’s dream of open­ing the high­ways for all mankind will remain alive and well in the 21st cen­tu­ry and beyond.

 

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