Across the automotive industry the goal is the same: Improve miles per gallon fleet-wide. As the bar for CAFE standards rises, the standards for fuel efficiency across automakers' fleets must follow. This poses a unique problem for Ford (NYSE:F) and General Motors (NYSE:GM) because they manufacture the two vehicles with the highest sales volumes in the U.S., the F-Series and the Silverado, which get fewer miles per gallon by far than passenger cars. GM and Ford have taken different routes to solving this issue, but which company is taking the correct path?
How they differ
While both are improving fuel efficiency, Ford has taken an approach to get more out of a smaller engine. Ford's turbocharged six-cylinder EcoBoost can deliver power like a V8 when needed. General Motors, on the other hand, is keeping its V8 engine and using active fuel management and cylinder deactivation to make it perform like a smaller engine when the power isn't needed -- in essence, making a big engine run smaller. Which is the right engine? As Richard Truett of Automotive News pointed out concisely, the answer depends on how you define "better."
"If cost and manufacturing complexity and real-world fuel economy gains are the metrics, GM has the advantage," Truett wrote earlier this month. "But if sales, image and government-measured fuel economy improvements are the yardsticks, Ford gets the nod."
Ford has most definitely capitalized on the marketability of its EcoBoost engines, which are proven to be popular options: The take rates of EcoBoost engines on the Escape, Fusion, and F-150 are a whopping 89%, 52%, and 42%, sequentially.
According to the EPA, both Ford and General Motors have improved their car and light-truck fuel efficiency by 7% and 6%, respectively, over the past three years. While Ford already has the slight edge, that lead might be extended with its all-new F-150 that debuted today in Detroit.
Enter all-new EcoBoost
One reason Ford can expect better fuel efficiency across its lineup is because of its advanced, and all-new, 2.7-liter EcoBoost with auto start-stop for the 2015 F-150. It's but one of many engine options; however, it could be a huge win for those of us in the market who love to drive trucks but don't haul large loads or use the vehicle as a work tool.
Ford's previous 3.5-liter EcoBoost has been a hit in the market and set the industry benchmark for efficient truck engines. Ford engineers have taken lessons learned and used that knowledge to create the new 2.7-liter EcoBoost that can perform like a midrange V8.
"No one's ever built a six-cylinder engine like this," said Raj Nair, Ford group vice president, global product development, in a press release.
In addition to the new EcoBoost option, Ford has removed nearly 700 pounds from its F-150 yet strengthened its truck frame by using more high-strength steel (from 23% to 77% of the frame's composition). Ford then used high-strength, military-grade aluminum alloy for parts of the body that, in addition to being much lighter, results in an increased towing and hauling capability, according to the company.
Why the right choice matters
Sales of these full-size pickups are important for multiple reasons. They are the highest-volume sellers for Ford and General Motors, meaning they are the fastest way to gain or lose market share in the U.S., and therefore the fastest way to gain or lose fleetwide miles per gallon. Both trucks also represent the most profitable products made by Detroit's two largest automakers -- and their importance to their respective brands can't be understated.
So was expanding the EcoBoost lineup with the 2015 F-150 the right move for the Blue Oval? In my opinion, yes it was. While both strategies -- making a big engine act small or a small engine act big -- work toward the ultimate goal of improving fuel efficiency, Ford has proven over the last few years that it's one step ahead of GM in marketing and public relations. That means the EcoBoost was a great decision, and Ford is selling it well to consumers who are buying the option in droves.
In addition to the EcoBoost's marketability, it adds flexibility to Ford's engine options. No matter how you use the truck, Ford has the options for you to choose the right one -- which should help optimize sales of the automaker's most profitable vehicle. In addition to the new 2.7-liter EcoBoost, Ford will also offer the F-150 with the 3.5-liter EcoBoost, the naturally aspirated 3.5-liter V6, and an improved 5.0-liter V8. This was the right decision, and look for it to serve consumers well and pay off for Ford and its investors.
Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool 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.