The Motley Fool recently sat down with Alan Mulally, CEO of Ford Motor Company for a quick chat that touched on several important topics. In the video below, we discuss Ford's strategy in China, how it views Japanese competitors and the weak yen, how Ford looks at Tesla and the future of the electric vehicle, and a few other topics.
A full transcript follows the video.
Brendan Byrnes: Hey, Fools. I'm Brendan Byrnes, and I'm joined today by Alan Mulally, who is, of course, the CEO of Ford. Thank you so much for your time.
Alan Mulally: Glad to see you.
Brendan: So, I wanted to ask you first about Tesla, which has obviously had a nice run over the past four months or so, and some people are wondering, "Is the electric vehicle the vehicle of the future?" What are Ford's thoughts on that, and how do you see this space evolving over the next decade or so?
Alan: Well, clearly, Tesla has done a very good job with a luxury version of the all-electric vehicle, and, of course, in Ford's case, we really do believe that we'll see more electrification going forward.
In our case, especially on the vehicles that go to large numbers of people, we see, first of all, the penetration for hybrid electric vehicles, then plug in hybrids, and then all electric vehicles, but the most economical fuel-efficiency benefit is with the hybrids today.
Brendan: I wanted to ask you about Toyota cutting prices on the Camry. Have you seen any impact on that on the Fusion? Going forward I know you're kind of constrained by production, and, kind of a related question, on the weak yen, can you see any progress on that and do you anticipate anything happening with that?
Alan: Well, clearly, everybody is concerned about currency manipulation, especially the yen, because we believe, and most everybody, that the market should set the currency rates.
We haven't seen manifestations of that yet in the United States in a big way, but clearly we're concerned, because a number of our Japanese competitors, their leadership has mentioned that they want to take advantage of this currency manipulation, so I'm just very pleased that the government leaders around the world are addressing this as part of the Free Trade Agreement, as you know, because it is just so important that we let the markets set the currencies.
Brendan: I wanted to ask you about China also, and the mix that we have there: small cars, it's mostly small cars being sold there right now, especially in the less affluent areas. How does Ford view that with your plant in Chongqing, and how do you see that playing out with the areas that have more affluence on the coast versus in the inland, which is a little bit less affluent. How do you see that mix and how does it affect your margins?
Alan: Oh, well, absolutely. Well, clearly, our plan around the world, Ford's plan is to offer our customers in every market segment around the world a complete family of vehicles, so small, and medium, and large; and cars, utilities, and trucks; all the way from the Fiesta all the way up, of course, to the popular F series.
And so it is no different in China. They love the smaller vehicles, but they also like the medium and the larger ones, also. We have great operations in Chongqing, as you mentioned, also in Nanjing, and also Nanchang. And we'll continue to expand our operations there and also expand our product line to be able to support that full line up of vehicles.
Brendan: So, finally, I think we talked about this last time, but Millenials is obviously a big thing for all automakers right now. We're seeing less millennials buying cars, also less millennials getting their licences. How does Ford attack that? Do you do anything actively to go seek them out or do you say, "When they come to the market, that's when we're really going to focus on that?" And how do you see that playing out long term? Is this a big deal?
Alan: Well, I think it is a big deal, because clearly it's going to be a very important part of our market going forward, and we really have spent a lot of time understanding what they want and what they value.
And it's interesting because at the most fundamental level, they want the finest quality, they want the best fuel efficiency, they want the latest safety features, but they also want a really smart design that allows them to be seamlessly connected to the Internet, which why you've seen us with our Sync, for example, with voice activation, hands on the wheel, eyes on the road, but also being seamlessly connected to the Internet using your own smart device, to be a really important part of our technology plan for the young generation, younger generation, and the response we've got is phenomenal, because you can get all that capability into the smaller sized vehicles: so the Fiesta, and the Focus, and the Fusion, and the response we've been getting from those customers is just fantastic.
Brendan: Great. My last question is just the future of manufacturing. I know you guys are doing a lot of innovative things, especially with the F series, with aluminum. How do you guys see that playing out longer term, and is 3-D printing something that Ford can use heavily in this space?
Alan: Well, just about 3-D printing, I think absolutely. Everything associated with being able to make products and use less time and less resources is going to be always very, very important for manufacturing and the car industry in particular.
I think that manufacturing is so important, and as we've talked about, it's important to every country around the world, it's the foundation for economic development, for energy independence and security, but also for environmental sustainability.
I'm just so pleased that in the United States, but also in our operations around the world, the public-private partnership, to be able to continue improve each country's competitiveness, and also manufacturing be a foundation of economic development, it's really gratifying to see the leaders' appreciation of that today.
Brendan: Great. Alan Mulally, CEO of Ford, thank you so much for your time.
Alan: You're welcome. Thank you.
Brendan Byrnes owns shares of Ford. The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.