REPORT: Ford's Mark Fields implies company makes no money on hybrids
2009 Ford Escape Hybrid - Click above for high-res image gallery
Last week, our friends from Consumer Reports got the chance to sit down with Mark Fields, Ford's vice president of North American operations, and some interesting information was gleaned. For instance, CR says Fields "implied the company isn't making money on the hybrids it sells today, and it is looking at ways to "enhance revenue" from them." Not surprising, really, but an interesting admission nonetheless.
There are a few ways Ford could try and recoup some of its hybrid powertrain R&D costs, most logically being to extend the technology across its line and into more expensive products – possibly from Lincoln, mimicking the strategy Toyota uses with its Lexus division. In addition to hybrid and electric cars, Fields says Ford is also interested in diesels but isn't currently planning to sell any oil burners in passenger cars. Instead, Ford's diesel efforts are likely to continue focused on pickups.
Speaking of which, Ford's light duty diesel engine for the F-150 is apparently still somewhat on the agenda. Earlier reports, says Fields, that said the program had been canceled aren't entirely accurate. Instead, the smaller diesel was merely "delayed," though we have no idea for how long.
[Source: Consumer Reports]
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Reader Comments (Page 1 of 2)
Luis 3:03PM (9/04/2009)
Not surprising - it took Toyota years to make a profit on their hybrid tech, and they outsell Ford by an order of magnitude.
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216 3:15PM (9/04/2009)
I thought Toyota was still taking in a loss for the Prius?
Paul 3:16PM (9/04/2009)
From a business perspective, I don't think this is a bad thing, yet. Ford's Fusion Hybrid can be a loss-leader and still be successful because it's bringing in new and wealthier buyers into the brand and changing their opinions. The key is to convert brand loyalties while breaking even or losing as little as possible.
As someone who has shied away from American cars, I'm one of those prospects who can be "flipped" via their Fusion hybrid. That may not be profit today but it easily could be as they introduce the truly spectacular Euro models here in the next few years.
the4thheat 5:57PM (9/04/2009)
@216 no, Toyota started making a profit on them quite a while back when the volume finally ramped up.
With stuff like hybrids the reason why it's a "loss" is because the initial R&D costs to get into the hybrid game are massive, as well as tooling and all that stuff for a manufacturing line that only makes a few thousand cars.
But when that same line is able to be used to make hundreds of thousands of cars the cost per car drops enough that you're profitable.
So if you want to get into hybrids you can't really half-ass it since you pretty much have to commit a massive budget then keep going until you get enough sales to make your investment back. Anything in between is going to result in a lot of money being lost.
Thus I'm sure we'll see a lot more Ford hybrids in the future since they've already sunk so much money into them it'd be idiotic not to build as many as they can.
Big_Thumb 2:11PM (9/07/2009)
@the4thheat
Toyota's marketing talking head stated that they make money on hybrids. All evidence indicates that they break even at best. Most insiders seems to believe that they loose money on hybrids.
Farmboy 3:05PM (9/04/2009)
Great to hear that the 4.4L is still on the agenda.
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Invisible 3:05PM (9/04/2009)
I'd like to know what vehicles Ford does make a profit on.
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BigMcLargeHuge 3:19PM (9/04/2009)
Dozens of different Mustang packages? j/k
I believe the money maker for the Big 3 was always trucks and SUVs. They are simple to build, and can be optioned up to 40-50K.
Ford has managed to recapture a fair amount of F-series, Explorer, Escape sales despite the economic downturn.
Leclerc 3:53PM (9/04/2009)
Yea right? LOL
fixitfixitstop 7:47PM (9/04/2009)
Explorers? I haven't seen a new one on the road in at least a year.
Alex 3:14PM (9/04/2009)
I'm still waiting for my diesle powered small pick-up. Mihandra, Ford, doesn't really matter who.
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Hamud 3:16PM (9/04/2009)
Isn't Fields the Executive Vice President and President of North America Operation?
Great about the Diesel on the F-150, since they are at it, a light TD for the Ranger would be great too. They use the 3.0 PowerStroke here in Brazil.
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TonyInMI 3:17PM (9/04/2009)
Abandon hybrid technology. That would help. Go hydrogen.
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Farmboy 3:26PM (9/04/2009)
Yes, because hydrogen stations just dot this country like chicken pox. It is not that simple or inexpensive. The first hydrogen cars are going to be horrifically expensive. So, for now, hybrids are one of a few limited choices.
Jim 3:31PM (9/04/2009)
Are you signing up to pay more in taxes to fund the hydrogen infrastructure?
miles 3:33PM (9/04/2009)
H2 is a silly way to store electircity.
TonyInMI 6:47PM (9/04/2009)
Hybrids are stupid - only driven by this "green" farce. Like the Audi guy said - go diesel until hydrogen is ready.
tankd0g 12:04AM (9/05/2009)
I don't think you know what the term Hybrid means, because all current hydrogen powered prototypes are in fact, hybrids.
TonyInMI 12:10AM (9/05/2009)
Huh? "all current hydrogen powered prototypes" have ICEs too?
Zerk 3:38PM (9/04/2009)
Toyota is taking a loss on hybrids. Toyota expects to lose money overall in 2009.
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