Ford CEO Mark Fields made the case that the automaker is better suited to play in the transportation services and software market than ever before and lead what the company expects will be a "breakthrough year" that will "change the way people move."
How well Ford delivers on those grand plans will largely depend on how well it can develop software and collaborate with major technology players.
The big picture from the Ford keynote at CES 2016 revolved around its "smart mobility" plan, which aims to reposition the company for the digital era. The technology buckets for Ford now include mobility, connectivity, autonomous vehicles as well as a data driven customer experience. Ford outlined results from various experiments in transportation started last year. The company will focus on flexible use and ownership and multi-modal transportation.
Speaking at CES 2016, Fields outlined the challenges for the auto industry: Consumer attitudes, urbanization, air quality and other cultural changes. Fields said the disruption facing the auto industry is ultimately an opportunity. "We're completely rethinking how we approach the business with one foot in today and one foot into tomorrow," said Fields, who said Ford has to think about what the world looks like in the years ahead.
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Ford will continue to focus on design, servicing and manufacturing, but the future largely rides on software and services. "We're proud to be an automaker, but beginning this year you're going to see us change more rapidly," said Fields, who said Ford will work on transportation services in the year ahead. Ford and rivals garner little to no revenue from transportation services--taxis, auto sharing etc.
McKinsey in a report this week said that the bulk of auto industry growth will come from transportation services and recurring revenue. Here's what Ford will have to navigate via McKinsey.
So far, Ford may be the best positioned to be a proactive player in the changing landscape. Compared to its rivals, Ford has made a bevy of key software moves as part of its broader mobility strategy.
In 2015, Ford set a course to become a more agile software developer, become interoperable with more tech providers and utilize big data and cloud computing as it develops autonomous vehicles. Ford's general theme is that tech can improve its customer experiences.
At CES 2016, Ford outlined the following:
Couple those moves with December's announcement that Ford will partner with Pivotal Software to adopt Cloud Foundry and the company's big data suite and it's obvious that the automaker has to speed up its software efforts. At the time, CIO Marcy Klevorn said "as we grow to become both an automaker and a mobility company, having leading software development expertise is critical to delivering at the speed consumers expect."