In May, Ford announced that it was eliminating most of the sedans from its product lineup next year, leaving it to focus more on its commercial truck business, where it is the U.S. market leader. The announcement put Fleet Management Weekly’s interview at the Work Truck Show in Indianapolis, Indiana in March with John Ruppert, Ford’s general manager for commercial sales and marketing, in a different perspective. Below is an edited transcript of Ruppert’s interview with Mark Boada, FMW executive editor.
What’s the big news from Ford at the Work Truck Show this year?
Our primary message here in 2018 at the Work Truck Show is really all about leadership again. We’re an industry leader for a reason, so from an overall message it’s commercial leadership. From a product perspective, we’re introducing our 2019 Transit Connect Cargo Van here at the show and we’re really excited about it. It represents a tremendous amount of new content, driver assist technologies vehicle which are new to the segment. The most important message is that automatic emergency braking is standard on this vehicle. It’s the first time it’s available in this segment, and it’s really something that our commercial customers told us they wanted for a long time.
Where does this vehicle fit in Ford’s commercial truck lineup. What is the target market?
Transit Connect is an interesting product for us. In 2009 we introduced the first compact van into the United States, the first by any manufacturer. We were the only player for three years. We dominated this segment, and it was a time when gas prices were on the rise and fleet customers were looking for an alternative to a full-size van. We had tremendous success.
Fast forward to today, [and] we’re on our third-generation product. Every other player in this segment is on their first. It’s an important vehicle because it’s the entry level of our commercial lineup, it’s our Class 1 offering.
The Transit Connect serves the needs of young businesses just getting started, looking for a reliable transportation for cargo or goods. As their businesses grow, and they need more trucks and bigger vans, they will have had a “Built Ford Tough” experience with a Transit Connect which certainly then benefits us as we move up the lineup.
What’s really neat about Transit Connect is our customer base is the mom and pop individual business, entrepreneur type that’s moving again goods, cargo. But we also have some significantly large fleets that buy this in the hundreds and thousands, telecommunications, package delivery. So, the neat thing about this vehicle is that the customer can be an individual entrepreneur all the way up to a large corporation.
The 2019 model also features a new range of engines and fuel types. Talk about that.
This product will have three power trains, two of which are new. The first is a two-liter direct injection gas engine. It will have an improved fuel economy over the engine that it replaces.
We’re also introducing a 1.5-litrer diesel into this product. it’s EcoBlue diesel that’s been designed and manufactured in cooperation with our global van group out of Europe and it’s the first time that there’s been a diesel offered in the compact van segment. We’re really excited about it. It will deliver at least 30 miles to the gallon when it comes to market later this year.
We also continue with our 2.5-liter engine to allow for customers who are into the CNG [Compressed Natural Gas] or propane applications, because it’s a prepped engine which is important. So, three power train offerings.
Ford is also known to be working on mobility. Everybody’s talking about shared vehicles and ride hailing, and there’s a point of view that sedans are going to be a less popular vehicle. In the meantime, we’re all buying on the Internet and having stuff delivered. Is the commercial market expanding faster than the sedan market is? Is it an important future sector for Ford?
The commercial market is a tremendously important business for us. It has been. You can go back a hundred years. In fact last year we celebrated a hundred years of being in the truck business. It was a Model TT, purpose built truck, that we originally built in 1917, so for a hundred years we’ve been selling trucks. Obviously, as time has gone along, it’s not just trucks. It’s trucks and vans. If you pay particular attention to the commercial segment, you’ll notice that the largest segment of the industry is actually vans. The second largest is trucks. The van products will serve a very, very important part of our portfolio as we go forward.
Do you see your delivery vehicles business in the future expanding at a faster rate than any other sector?
Absolutely, and the whole concept that we’ve all read about and heard about, last mile delivered, there’s a tremendous amount of emphasis around that and what does that really mean. I think that is still forming up. I think you’ll see the expansion of different, unique types of delivery vehicles doing different work as we go forward.
Could you talk a bit about the industry trends you’ve seen over the last six months and what you see happening over the next six months?
It’s really a great time to be in this commercial space. If you include Class 8 trucks, the industry is coming off of over a million units sold for the last two years, so there’s a solid foundation for which to build on. We estimate that 2018 is going to be another great year in terms of industry volume.
Our market share is strong. We’re over 40% market share in this space, in the Class 1 through 7 segment. We don’t have a Class 8 offering. If you look at gross domestic product, most forecasts are two to three percent. The housing market is strong, 1.5 to 1.6 million starts in permits each and every month, and then you have the underpinnings of a really strong consumer confidence, I think the highest level since 2009. Those economic factors would suggest that this robust business that’s supporting the commercial market should continue into the foreseeable future.
Is there anything else you would want to talk about?
The Transit Connect, like it did in 2014, is beginning another cadence of refresh on our commercial products. In the whole lineup over the next couple of years, we’ll get enhancements, significant in some cases, to hopefully keep us in the position of leadership that we’ve enjoyed for a long period of time.
