Car buyers face a lot of choices. Trim levels. Packages. Options. Colors. It can make the shopping process more confusing and stressful. It’s not great for automakers, either. A production line is more efficient when it makes the same thing over and over again. And dealers don’t love the complexity of trying to stock, or track down, every combination their customers might want.
Ford plans to simplify the whole process by offering fewer choices.
During a recent earnings call, Ford CEO Jim Farley told investors, “We cannot just continue to build this complexity.” So, he said, “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 side of the company that builds gasoline-powered cars after a recent split that separated the company into a gas division and an electric car division. The electric division is known as Ford Model e.
The new plan for simpler configurations could involve some drastic cuts. Ford CFO John Lawler told attendees at a recent conference, “We could reduce the number of consumer options by 80% to 90% in many of our vehicles without sacrificing sales.”
Ford is Simplifying Some Models
For now, the change looks like fewer confusing choices on some models. This week reports emerged that Ford will drop the optional 2.3-liter EcoBoost 4-cylinder engine from the 2023 Lincoln Corsair.
For the 2022 model year, Ford made its Super Duty King Ranch and Platinum trim pickups available only with 4-wheel drive. Its Edge crossover is newly all-wheel drive only for 2022.
But bigger changes could be on the horizon.
Lisa Drake, Vice President of Ford Model e, recently told reporters that the company was learning from F-150 Lightning production. Ford made its electric truck available only with a single cab style and bed length and saw sales success. “When we learn those things, we will then apply them back to Ford Blue” for its gas-powered trucks, she said, “That is going to unlock amazing efficiency through the process.”
Setting Up a Larger Shift
On the one hand, the move seems strange. CEO Farley has long discussed Ford’s plans to move to an order-first model, where customers would order the exact vehicle they want built for them. That would seem to allow endless variation.
In Farley’s vision, dealers would focus on delivery and service, and wouldn’t bother to keep a large stock of unsold cars. The move could even let Ford charge fixed prices for cars, ending the negotiation process that makes so many Americans dread car shopping.
On the other hand, it seems inevitable as the automotive industry shifts to a different model of car buying.
Now that our cars are rolling internet connections, many automakers plan to sell car features as monthly subscriptions. Several automakers have already experimented with charging monthly fees for access to things like heated seats and adaptive headlights. BMW kicked off controversy experimenting with this sales model overseas just last month.
One way that model could save automakers money? It allows them to build just one trim level – one with every available option – and switch the features on or off after sale.
To be clear, we’re not aware that Ford has said it will move to the subscription-fee model, but many automakers have publicly toyed with the idea. VW even has a concept car in the works that could charge by the mile for additional horsepower.
Our research shows that America’s drivers don’t want this future. In our most recent survey, just a quarter of car shoppers were open to the idea.
