Ford won’t be first with driverless car: Mark Fields

While there’s a bevy of technology in all shapes and forms always on display at the CES or Consumer Electronics Show in Las Vegas, Ford CEO Mark Fields spoke with Bloomberg TV’s Brad Stone where he said the first driverless car on the road will not be a Ford.

He said, “Our view is within five years somewhere within the industry somebody is going to be introducing a vehicle. In our case at Ford we have semi-autonomous vehicles on the road today that people can buy, features that will help people keep in their lanes, allow to adjust their speed based on traffic flow, those types of things. And we at Ford eventually will have a fully autonomous vehicle, but our approach when we introduce it goes back to our history. We want to make sure it’s accessible and affordable for the masses because we’re Ford.

Field’s interview with Stone can be viewed by clicking on this link

A full transcript of the Bloomberg TV interview can be found below.

 

BRAD STONE, BLOOMBERG BUSINESSWEEK: Hi, Mark.

MARK FIELDS, CEO, FORD MOTOR COMPANY: How you doing?

STONE: Pretty good. So you said yesterday, you told my colleague, Keith Naughton, that you think we will have a fully-automated driverless car in five years. That kind of took my breath away. Is the state of technology that advanced?

FIELDS: I think when you look at the level of advancement in sensors, and cameras, and software and the algorithms behind it, it’s moving very, very fast. So our view is within five years somewhere within the industry somebody is going to be introducing a vehicle. In our case at Ford we have semi-autonomous vehicles on the road today that people can buy, features that will help people keep in their lanes, allow to adjust their speed based on traffic flow, those type of things. And we at Ford eventually will have a fully autonomous vehicle, but our approach when we introduce it goes back to our history. We want to make sure it’s accessible and affordable for the masses because we’re Ford.

STONE: So when does Ford get there? And let me ask you, because I’ve sat in a Google driverless car, is Google a partner?

FIELDS: Well I think from that we see a lot of different players now making some inroads into that. And I think that’s overall the level of innovation I think is very exciting for the industry. So as we look at it, and we’re always looking for great partners, we’re going to decide the things that we want to do ourselves, develop ourselves, things that we want to buy, things that we want to partner with others, but I think it will be very collaborative. And our approach is to make sure we have fully autonomous test vehicles on the road today. And some of them have been on the road since 2013. We haven’t announced a time frame when it’s going to be introduced, but it’s all going to come back to make sure it’s accessible and affordable for the masses, versus some of our luxury competitors.

STONE: Well one of your competitors, Mercedes, is here at the show showing a concept car with four seats that swivel inward. So none of them are facing the road. There’s no driver. There’s no driver’s wheel, no steering wheel. Do you get in that car?

FIELDS: Well I haven’t seen the Mercedes concept. I’ll get into any Ford vehicle of course, but as I said, we have research vehicles on the road today gathering data, understanding the situation and making sure all with that aim to making sure they’ll eventually be affordable for the masses.

STONE: So let’s talk about the in-vehicle computer systems. They are not perfect today. Any new car owner can tell you that there are flaws, there are bugs. They’re too difficult to use. How are we to trust the carmakers to deliver a reliable, 100 hundred reliable automated experience when playing Pandora and getting your phone to work on your in-vehicle system is not as simple as it should be?

FIELDS: Well our approach at Ford is pretty simple. We want to make sure we’re listening to our customers. And when we come out with our systems like our SYNC system we want to make it very intuitive and we want to improve it over time. For our SYNC system right now we have — it’s our vehicle connectivity system. We have ten million folks around the world that have purchased that system. And the system keeps getting better and better. We’re actually here at CES introducing SYNC 3.

STONE: And tell us a little bit about the SYNC 3. What does it bring?

FIELDS: Well it takes all the learnings that we’ve — and input that we’ve gotten from customers over the last eight years. So it’s more intuitive, easier to use. It’s also faster. It has more conversational voice commands, so enhanced voice commands. It allows you to update. If we need to update the software we’ll be able to do it over Wi-Fi. And overall just at the same time we’re also going to be offering Siri’s eyes-free in the vehicle as well. So it’s really taking the foundation and the leadership that we had with SYNC and now taking it to the next level with SYNC 3.

STONE: Do you see the smartphone as the center of the in-vehicle computer experience, or an in-vehicle computer that has its own connection to the internet?

FIELDS: Well I think it will be a piece of it. With the SYNC system we took the approach of a brought-in device that the customer can stay connected. As you think about going forward we’re in the process of introducing embedded modems into our vehicle because that allows the vehicle to be part of the Internet of Things. And as we go forward and as customers decide to opt in to share their data with us we want to make sure that for that we’re providing them first safety and security of their data, and secondly giving them something back that they find a lot of value for. So it’s going to be a combination of both.

STONE: So, Mark, let’s talk about 2014. All the automakers had a great December. The price of gas is very low right now. People are excited about new cars, but overall you were a little soft and you missed expectations for 2014. What happened?

FIELDS: Well as we started 2014 we said very clearly that 2014 was an important transition year for us. We said our revenue was going to be about equal to the previous year. And that’s because we’re launching 23 global launches. And we launched all of them, and many of them in the third and fourth quarter. So that sets us up very well for 2015. And when you look at some of those new products we’ve introduced, our Mustang, our Transit, our new Lincolns, they’re doing extremely well in the marketplace. And I think that bodes well for all the new products that we’ve launched in the last couple of quarters.

STONE: And one of those new products is the new Ford F-150, an all-aluminum vehicle. What does that mean exactly to move from steel to aluminum? And is that — do you see that as an industry trend?

FIELDS: Well we’re always looking at things from a customer standpoint. And obviously we spend a lot of time with our truck customers. We’re the leader in that area for 38 years. And what they told us is they continually want better capability of the truck, better payload, better towing, et cetera. And they want really good fuel economy. So we were able to take 700 pounds out of the vehicle. We put it on a diet by putting it on aluminum. And we’ve been able now to deliver industry-leading levels of capability and great fuel economy.

STONE: Last question, Mark. You recently said that you’re going to increase your dividend to shareholders by 20 percent. And yet profitability is challenged. It’s a time of enormous change. Why not reinvest that money, that capital in the business and in these technologies?

FIELDS: Well our capital strategy, as we’ve said before, is pretty simple. We want to keep reinvesting in the business. We want to keep and strengthening our balance sheet. And we want to reward shareholders. At the same time we want to make sure over time that that dividend is sustainable versus the economic and the business cycles. We haven’t announced anything about increasing dividends. We did it last year in January at this time. And that’s really our capital strategy.

STONE: Thank you, Mark.

FIELDS: All right. Thanks, Brad.

 

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What is VW thinking? Phaeton may come back to US market, no more US plants.

BY GERRY MILES

An interesting piece of PR mail landed in the in-box just now. VW, wait for it, MAY bring back the Phaeton to the US market later on this decade. Yup, this decade, like 2018. After being roundly excoriated for such an opulent non-plussed expensive sedan produced from the firm that originally built “the people’s car” and sagging sales, it went quickly into the dark night.

Part of it has resurfaced, its huge engine sits under the bonnet of most Bentleys in what a friend calls Bentwagens, and another unprintable term for the unwieldy combination of a British-German car given past World War history and all, but as he is won’t to say, no one listens to him.

Volkswagen Group of America President/CEO Michael Horn told Bloomberg’s Matt Miller at the NY Auto Show that they won’t build any more plants in the USA, the Phaeton is slated for a comeback and small market pickup trucks aren’t likely. The excerpts are below but you can watch the interview if you click on the link here.

Highlights:

On whether bringing a German back to run VW Americas is a sign that VW America need to get more efficient and more organized:

“No, not at all.  I think it is more a sign that we need to connect closer from the American market to the German market.  And since I know the German company for more than 20 years, I think I’m very — I have a lot of value added to explain the American demand to the American customers to our German entity.  And I this is the most important reason for them to bring me over here.”

On his plans for VW America:

“Well, first of all, we will be very close to the dealer network.  That is very important.  If you look at the NADA results last year, and most probably also winter, which will be published pretty soon, the dealers are not happy because they do not earn enough money.  And then they send a great distance to the company, both in Hern (ph) and in Wolfsburg.  And so we have been working very hard with dealer council and the dealers to get this reconnection and lots of different things on the bonus programs on tier 2 marketing, on service loaner cars.  And our overall approach to talk together again as partners.  This is very important to get the dealers engaged.”

“And the second big thing is product.  And we start with the Golf and with the Jetta.  Next year is the Passat.  It will be a new Passat, maybe even all new.  So we have to see on whether this is possible. And then we’re going to see the next step when the two SUVs are coming, the Passat SUV and the compact SUV.  So we’re working very hard not only on bringing cars to the market, but with all the accessible features, what we talked about, all the exterior designs, and to go from there.”

On whether he is aiming to make VW more of a luxury brand in North America:

“No, not at all.  My experience is more than 20 years with the brand Volkswagen, and I had a short time, two or three years, introducing the Phaeton and the Touareg, which was an interesting experience.  Very good experience, but I am a people’s car guy. As I come from Golf, I come from Jetta to the top and so we definitely don’t want to position the brand upwards, but we want to make it even more mainstream and to conquer volume.”

On whether he is looking to bring the Golf and Jetta into the North America mix more:

Jetta is our best selling car.  So we sell roughly 150,000 Jettas in the U.S., 120,000 Passats.  And the Jetta is very important because it’s a long-term big seller here for us.  And so for us, it is very important now to continue our value story because we refreshed the Jetta from the outside.  It’s going to be very good-looking, very nice, more sporty and more dynamic because we lowered, we widened it.  The interior is eased up quite a bit.  We seat tubes inside and we will have the value story on the Jetta.  So we moved the acceptable, high-premium features like rearview cameras, like all the collision warning systems, we moved them down to make it more accessible.  We don’t talk about pricing yet, but it will not just look nice, and will be totally renovated also in terms of technology.  We have new engines, a new diesel engine, V8, 288 and the 1.8 turbo, which you know.  But they will be more fuel efficient, 10 percent, roughly, highway miles per gallon, average miles per gallon.”

On what Americans want:

“The Americans pretty much want to have everything starting from the base.  You want it all and you want to have great and nice-looking cars also from the base, so not differentiate too much the lines from the outside small chrome, small price, pick from the price.  And that is what we are working at.  And you would see this also with a Jetta.”

On whether the Chattanooga factory is making cares for the rest of North America: “Yes.  And we even export cars to Korea. So it is a North American car and the car gets being exported to some of the Asian markets, not to China.”

On whether there are any plans to build more factories in the U.S.:

No, I think that from this location, it is pretty much set up what we have in Mexico, what we have in Chattanooga and then we have more opportunity to grow the business there.”

On whether the Phaeton is coming back to the U.S.:

“Yes we plan to bring it back somewhere in 2018, 2019”

On whether VW will sell pickup trucks in the U.S.:

“No, it’s the emerald.  We built this in Argentina.  I checked one of our plants over there.  And even in Hanover, but it’s very small.  It is much smaller than the F-150.  And the technology and the engineering is a little bit too expensive from our point of view for the U.S. markets.  So if we would want to – if the SUV market, SUV segment here – we would really need to do something different.”