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RW Insight: New Ford CEO Signals Changes

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May 24, 2017—Signaling a desire for massive, company-wide change, Ford replaced its former CEO and president Mark Fields with Jim Hackett, who has overseen Ford’s efforts on autonomous vehicles.

It’s a move that, according to Susan Beardslee, shows Ford is taking a pronounced step toward making up some ground with competitors—several years worth of ground, actually.

“If you think about a vehicle's from design to start of production, you're talking in the neighborhood of three to four years," said Beardslee, senior analyst for ABI research. "So, [Ford is] about three to four years behind in some of these enabling factors, like long range electric vehicles, over the air updates, and autonomous vehicles. Through the lens of autonomous research, it signals [Ford is] a generation behind companies like GM and Tesla.”

Hackett’s biggest project before becoming CEO of Ford Smart Mobility was formed in 2016 as an effort to accelerate the company’s metamorphosis into an auto and mobility company. Its aim was to aggressively pursue emerging opportunities and “be a leader in connectivity, mobility, autonomous vehicles, the customer experience and data and analytics,” according to Ford.

Beardslee, who provides global intelligent transportation research for ABI, said Hackett’s appointment signals major changes for Ford in terms of telematics, connectivity and automation—all of which should be noted by the automotive repair industry.

Here are the three areas of which Beardslee said the auto repair industry should take note:

Telematics

The biggest piece of the puzzle is a huge one for all OEMs: prognostics.

Or, as it’s better known as in the automotive repair industry: telematics. Which Ratchet+Wrench has written heavily about in the past (including a May 2017 story), as it presents a significant opportunity for shops.

“It's the ability to know you need to fix something before it fails,” Beardslee said of telematics technology. “If you as a consumer or a small fleet owner know ahead of time that a battery or pump is going to fail, you can bring it in.”

The technology has the potential to completely reshape the industry, and the biggest players—dealerships, automakers, MSOs, connected car companies—are investing heavily. However, Ford is very far behind its competition, Beardslee said, which means telematics will likely become a huge focus over the next few years.

“Ford is behind GM and Tesla on that,” Beardslee said about telematics. “[Ford] just announced this week you can now update your apps—which is nice, but has nothing specifically to do with autonomous or repairs.”

Connectivity

Just over the past few days, Ford signaled it would make updates to its SYNC 3 software, which is voice-activated technology that allows drivers to make calls, listen to music and select apps while driving. It’s a huge step for Ford catching up with other automakers in terms of vehicle connectivity and building autonomous vehicles, which (as noted in “Telematics” section) presents immense change and potential for auto repair shops.

With this technology growing in importance, Beardslee said Ford will focus heavily on “over-the-air” updates, meaning the automaker can make updates to the head unit and infotainment systems electronically. As that software improves and customers become more accustomed to it, the importance of auto repair shops understanding the technology will grow.

“That's something Tesla has done, and GM started on with some of their 2015 model cars,” she said.

Electrification

Ford is not expected to have long-range EVs (electric vehicles) ready for another three years, Beardslee said. Because rival OEMs are making EVs such a primary focus in order to compete with Tesla, she said you can expect Ford to follow suit and ramp up production.

“From a technical perspective, Chevy has about a dozen models in the next five years for the first long-range to compete with a Tesla Model 3 in 2020,” Beardslee said.

 

THE GROWING IMPORTANCE OF TELEMATICS 

Using telematics to connect with consumers’ vehicles is a promising business model and will undoubtedly become the norm in the near future. Here are a few Ratchet+Wrench articles that examine how telematics can become an important component of day-to-day operations at your shop:

 

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