Ford plans plenty of choices to woo car buyers

Chris Stanton

• Last Updated: November 29. 2009 5:15PM UAE / November 29. 2009 1:15PM GMT

Ford maintains a key to its strategy is to reinvent itself as a supplier of less polluting, fuel-efficient cars. Philip Cheung / The National

How do you convince a car buyer in the Emirates to choose a smaller engine for his next muscle car but pay more?

The answer to that puzzle, Ford maintains, is key to the US car maker’s strategy to reinvent itself as a supplier of less polluting, fuel-efficient cars.

Rising oil prices and government mandates in Europe and the US have pushed the firm to reorientate its production lines worldwide towards smaller cars, but in the Middle East and the US, Ford faces reluctance among buyers to choose smaller engines, said Susan Cischke, the firm’s group vice president for sustainability, environment and safety engineering.

“The market here is different, more American-like,” she said on a visit to Abu Dhabi last week. “It is an outlier, yet it’s an important growth area for us because there will be a lot of people here, a lot of income, and they like American cars, they like bigger vehicles.”

Ford’s answer to these differentiated markets, she said, was to offer consumers a choice of engines built on identical vehicle frames, or “platforms”, to achieve economies of scale in manufacturing.

For consumers who cannot part with their petrol engine, Ford’s engineers have worked to deliver more power with less fuel by shrinking the size of the engine but improving its performance. The changes boost fuel efficiency by 20 per cent and reduce carbon emissions by 15 per cent, Ms Cischke said.

But the company also offers petrol-electric hybrid models, and in 2012 will begin selling the firm’s first fully electric passenger car, a version of the Focus, Ms Cischke said. By 2012, the company will offer plug-in hybrids with batteries that can be charged at an outlet, but that can be switched to a conventional engine for long trips, or in hot weather when the air conditioning is running at full power.

“In the near term, what we want to do is improve the internal combustion engine, make it as efficient as possible,” Ms Cischke said. “At the same time we know that’s not going to be enough.”

Part of improving the appeal of smaller cars in markets like the US, she said, was boosting the availability of extra features that have long been limited to models in a higher price bracket.

“The question is how do we make money off these small vehicles in the US, and you do that by offering more features that people are willing to pay for.

“In the past, there was not a market for that, because the people who bought the small cars couldn’t afford all the features.”

The widespread introduction of electric cars and improvements to engine efficiency are expected to play a central role in reducing carbon emissions to slow global warming. The International Energy Agency, a group of energy consuming countries, estimated this month that the share of conventional cars in the vehicle mix would need to fall by more than half over the next 20 years if the world is to have a chance at limiting average warming to 2° Celsius.

In that scenario, conventional hybrid vehicles like the Toyota Prius and plug-in hybrids together make up half of the global vehicle fleet, while electric cars comprise only 7 per cent.

Ford, the only US car maker to survive the economic downturn without a government bailout, believes plug-in hybrids will take centre stage until the costs and performance of vehicle batteries improve, Ms Cischke said.

Even if battery costs fall between 30 and 50 per cent to US$500 (Dh1,836) per kilowatt-hour of capacity – considered a benchmark for the industry – the batteries on an electric car with a range of 160km will still cost well over $12,000 by Ms Cischke’s estimates.

With the additional components and costs of production, the car’s final price could be well out of reach of many buyers.

“The challenge is going to be, everywhere, about affordability. Can we really make these electric vehicles affordable?” she said. “With the plug-in hybrid battery, you’ve got kind of a belt and suspenders until you’ve developed the infrastructure and you don’t need the internal combustion engine anymore.”

cstanton@thenational.ae