Ford executive says OEMs must work with cities to reduce number of cars in urban centres

10 May 2017

Ford executive says OEMs must work with cities to reduce number of cars in urban centres

10 May 2017

Ford’s Europe president has called on carmakers not to be ‘selfish’ and complete their visions to become mobility companies by helping city governments reduce congestion and emissions through a steep reduction in the number of cars on their roads. 

Jim Farley, Ford’s executive vice president and president in Europe, Middle East and Africa, said: ‘We must work on how to take cars out of the system when there is an alternative, more sustainable solution… Cities are facing huge challenges — congestion, emissions and air quality to name a few. The answer to these challenges lies in collaboration with cities and city leaders.’ 

The suggestion is that rather than resisting change, such as city emissions regulations, OEMs should work with cities as part of the solution – through helping them develop wider solutions such as car sharing and car hailing schemes, which the OEMs can then monetise. 

Ford is still struggling to build a vision that will convince its board of directors and investors as it sinks billions into new technologies such as car sharing. Farley was speaking at the FT’s Future of the Car conference in London on Wednesday. 

These new business models are especially important in urban areas, where increasing density of living is making owning a car more and more inconvenient for many, due to space restrictions and congestion. 

However, unlike with the car market with dozens of OEMs competing in each market, it is likely that in each urban centre, only a few mobility players will dominate – putting enormous pressure on the OEMs to ensure they are not left out. 

Volkswagen has established its 13th brand MOIA to take on the challenge, which plans to launch on-demand minibus services across cities. General Motors (GM) on its part has launched its car sharing scheme Maven in the US – however, with GM pulling out of Europe with the sale of Opel to PSA, a launch of Maven in Europe is unlikely. GM has also invested $500 million (€460) in ride-hailing service Lyft, which is the main rival to Uber in the US; Lyft may be planning to ‘go global’ and expand outside the US

Others have punted for car sharing schemes, with Mercedes-owner Daimler’s Car2Go being particularly popular BMW and Audi have similar inner city schemes. Nissan’s is still in the trial stages with its car ownership project in Paris, which uses social media to match people that then co-own a Nissan Micra car. 

Ford on its part, having experimented with car-sharing projects in the UK and Germany, last year bought on-demand van shuttle service Chariot, and plans to expand the service outside the US later this year. 

Each Chariot vehicle takes 11 cars off the road in the US, and up to 25 in China, Farley told the conference – a massive potential contributor to lowering congestion that plagues many European cities

Two-thirds of the world’s population are expected to live in cities by 2050, both due to space constraints and the economic power of cities in globalisation. Therefore, carmakers need to adapt their business models to a world where transport mobility solutions command an increasing share of the market versus car ownership, with levels of car ownership continuing to fall.