Ford to launch new customer relations and service model

By REUTERS | 11 January 2016

DETROIT: Ford Motor Co  is launching a new, global model for harvesting data and earning revenue from customers by offering services beyond the sale of new vehicles, the company said today.

FordPass will be unveiled later today at the Detroit auto show as if it were a new car - such as the revamped Ford Fusion sedan which will also get its debut at the show.

FordPass aggregates under a Ford-branded umbrella the services customers now access through separate channels – parking lots managed by ParkWhiz, car-sharing services and digital payment apps. FordPass will be available to consumers whether they own a Ford vehicle or not, the company said.

Ford will also open “FordHub” storefronts in New York, London, Shanghai and San Francisco to draw would-be customers. Consumers will still have to visit Ford dealers to buy cars.

Ford chief executive Mark Fields said FordPass is a key part of his strategy to expand Ford beyond its core manufacturing business. The market for transportation services, such as car sharing, could be as big as US$5.4 trillion a year, he said, and Ford’s share of that pie is zero.

For now, Fields said, Ford plans to expand FordPass services using targeted partnerships with companies such as McDonald's and 7-Eleven, not big equity investments to match General Motors' US$500 million investment in ride hailing start-up Lyft.

Silicon Valley companies including Alphabet Inc's Google and Apple Inc, Uber and Lyft and others also want to profit from information about what people do in their cars, or offer alternatives to the business models automakers have relied on since Henry Ford launched the Model T.

Ford Fusion.
Ford Fusion.

Ford’s carmaking rivals are also racing to head off Silicon Valley challengers and use connected vehicles to build service businesses.

GM has sold 2.2 million vehicles with embedded high speed Internet connections and uses those connections to alert customers when cars need repairs or help them reserve hotel rooms, Phil Abram, GM’s chief infotainment officer, said in an interview.

GM told investors last year it expects to bring in US$350 million in revenue from connected services over the next three years. Nevertheless that still pales in comparison with the profits GM reaps from selling large trucks and SUVs - which still rely on technology rooted in the auto industry’s earliest days.