Ford's New Autonomous Vehicle Business Only Works If It Builds Good Cars
Ford Motor Co. (NYSE: F) has spun out its autonomous car division into something called “Ford Autonomous Vehicles LLC.” The announcement did not give any concrete answers about how Ford intends to best dozens of autonomous vehicle divisions at major manufacturers, well-funded startups and some of the largest software companies in the world.
In the announcement Ford management said:
Ford creates Ford Autonomous Vehicles LLC, which will encompass all aspects of its self-driving vehicle business operations, to accelerate its AV business and capitalize on market opportunities
As it accelerates the integration and application of technology across its industrial system, Ford is realigning its Information Technology and global order to delivery teams under its Global Operations organization
Ford is embedding a deeper product-line focus across the company. The effort is anchored in human-centered design with product teams putting even greater emphasis on customer insights and market opportunities to deliver the products people love across global markets
The comments are so complex that they need someone to interpret them.
Ford already has said:
By 2020, Ford will offer North America’s freshest lineup among all full-line automakers, with its average showroom age dropping from 5.7 to 3.3 years as it replaces three-quarters of its lineup and adds four new trucks and SUVs. Ford has similarly aggressive product refresh plans in other regions, including Europe and Asia.
While the goals may be met, Ford management cannot be certain that it will have the “freshest lineup” unless it knows the detailed plans of its rivals. The launch of Ford Autonomous Vehicles does not appear to improve its chance to reach that goal.
Ford has to contend with autonomous car work that ranges from Tesla to Alphabet’s highly successful Waymo operation to the rest of the 55 organizations approved to test autonomous cars in California, which is considered the state where the most advanced work is done. Ford has an army of competitors in the segment. The number two American car company cannot make the case it is better off than any of them. A new company won’t change that.