Ford CEO says he’s tired of making ‘boring’ cars.

Before Ford (F) CEO Jim Farley was in the position he is in now, his predecessor made an ill-advised move that still dictates the automaker’s direction today.

In 2018, the Blue Oval discontinued passenger cars for the United States market, with the exception of the iconic Mustang pony. Citing declining profits and falling demand, the move transformed Ford’s lineup from a diverse selection of small hatchbacks, compacts, sedans, crossovers, SUVs and pickup trucks to a selection consisting only of pickup trucks, SUVs, crossovers, and the Mustang .

“We will fuel the healthy parts of our business and aggressively address the value-destroying areas,” former Ford CEO James P. Hackett said during the company’s first-quarter 2018 earnings call. “We’re starting to understand what we need to do and make clear decisions there.”

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Farley, who was also on the call as Ford’s then-executive vice president and president of global markets, gave UBS analyst Colin Langan a preview of what to expect.

“We’ll have more true off-roaders building on our Built Ford Tough background like the Bronco and other new nameplates we don’t sell today. We’re going to refresh our entire lineup of traditional crossovers and SUVs that everyone knows, like the Explorer and the Escape,” Farley said. “We’re going to bring in and take capital and redeploy it to new silhouettes, products that give customers the utility benefits without the fuel economy penalty. And they’re going to be high-performance, so they’re going to be very excited.”

Six years later and with Farley at the helm, Ford’s Blue Division – the division that encompasses Ford’s gasoline vehicles – is as profitable as ever. Ford’s Q2 2024 data shows that despite mounting warranty claims, it still managed to pull in an EBIT of close to $1.2 billion.

Although Ford is making major changes to improve the profitability of its electric vehicle program, Ford continues to make gasoline-powered passenger cars in markets outside the United States — but that may not be for much longer.

Red Bull Racing team principal Christian Horner talks to Ford CEO Jim Farley on the grid during the F1 Miami Grand Prix

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The “boring-car” business.

In a recent interview with CAR magazine, the British motoring authority, Farley expressed Ford’s new strategy of making cars that remind them of their “greatness” to reignite the curiosity and passion of potential and legacy customers.

“We’re getting out of the boring car business and into the flagship vehicle business,” Farley told the magazine.

The “boring cars” in question are the Mondeo, an Accord- and Camry-sized family sedan that was previously sold in the States as the Fusion until 2018; Focus, a hatchback and compact sedan that ceased production in the US in 2018; and the Fiesta subcompact, which ended U.S. sales in 2019.

Farley says the cars were “loved by many customers but could never justify more capital allocation – unlike commercial vehicles”.

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The CEO also believes that development costs are much better spent on fast cars and off-road vehicles like the Mustang and Bronco, respectively, which are popular with gearheads and enthusiasts.

“We’re naturally good at fast Fords and Broncos and real off-roaders,” he told the magazine.

“Take the (F-150) Raptor: it came from Mexican desert racing and we made it global and mainstream. The Raptor story is a great example of where I think our passenger cars should be going.”

Special for Mustang; Farley has big ambitions for Dearborn’s car.

“We can fight Porsche with the Mustang – it’s the best-selling sports coupe in the world. We will invest in that brand and grow from strength to strength.”

Farley explained that for Ford, sports cars and other enthusiast cars were a “side business” and that with increased attention to the Mustang, Raptor and Bronco cars, they are able to make them mainstream.

Ford Explorer electric cars sit in the hall at the start of production.

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Dilemma

Ford’s successor to the Mondeo, Focus and Fiesta are two electric vehicles using Volkswagen’s MEB platform: the Explorer and Capri crossovers, which are European-exclusive models.

Ford’s pivot to SUVs may work in the United States, but it’s a different story in Europe. According to the latest data from JATO Dynamics, only three crossover SUVs and zero traditional SUVs are among the top ten best sellers on the continent.

Their tastes lean towards smaller compact cars like the Volkswagen Golf – cars that Ford’s European division has conveniently preserved. The similarly sized Focus will cease production in 2025. In 2023, the Ford Fiesta ceased production and the Mondeo sedan left the Ford lineup a year earlier.

These actions have consequences. The latest data from the Association of European Automobile Manufacturers (ACEA) shows that Ford sales are struggling in Europe, as it reported that the Blue Oval had a market share of 4 percent in June 2023, down to just 2.9 % in June 2024.

Ford Motor Company, which trades under the symbol F on the New York Stock Exchange, is up 0.94% today, trading at $10.78 at the time of writing.

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