Ford to drop down to as few as 20 models

Posted Sep. 27, 2010 at 1:03 p.m.

From Bloomberg News | Ford Motor Co. Chief Executive Officer Alan Mulally said the second-biggest U.S. carmaker may reduce its product lineup to as few as 20 models.

“There will be less than 30, on our way to 20 to 25,” Mulally said in response to questions on the future lineup of “nameplates” or models after addressing the Confederation of British Industry in London today. “Fewer brands means you can put more focus into improving the quality of engineering.”

Ford had 97 models on offer when Mulally became CEO of the Dearborn, Michigan-based company in 2006. The lineup has since been reduced by terminating some products and selling luxury brands Volvo, Jaguar, Land Rover and Aston Martin.

“It was absolutely clear that we had to simplify Ford dramatically,” said the CEO, who is in Europe prior to visiting the Paris Motor Show later this week.

Ford has also simplified component specifications for each product, so that the Fiesta model, which has about 10 variants worldwide, now has about 65 percent of its parts as standard.

“It helps all of our distribution, Ford store owners, suppliers, employees and consumers to know exactly what they’re getting,” Mulally said.

As part of his push to cut the number of brands and models, Mulally has dismantled the luxury Premier Automotive Group formed by CEO Jacques Nasser in 1999 and embraced by Bill Ford after he took over the top post.

Volvo Completion

Mulally, who joined Ford from planemaker Boeing Co., completed the sale of Sweden’s Volvo Cars to Zhejiang Geely Holding Group Co. of China for $1.3 billion last month, having sold the Jaguar Land Rover unit to Mumbai-based Tata Motors Ltd. in 2008 and disposed of Aston Martin a year earlier.

Ford is also discontinuing the mid-level Mercury line in North America and intends to put more resources into its upscale Lincoln brand.

The CEO said Ford’s sales prospects depend largely on economic recovery following the termination of government cash- for-clunkers programs that spurred demand last year.

“The key thing now is to keep the economy going,” said Mulally, who turned 65 last month. “All the fundamentals say that we are moving in the right direction.”

Prospects for expansion are bolstered by the Asian market, which is “just a phenomenal growth engine right now,” he said.

Ford traded down 2 cents, or 0.2 percent, at $12.54 as of 12:18 p.m. in New York, paring this year’s gain to 25 percent.

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