Ford may be the first to open up both its hardware and software platforms to outsiders.
Ford Motor Co., stung in recent months over complaints that some of its hybrids are achieving fuel economy well below the advertised miles-per-gallon, said today it is opening up its vehicle architecture to both hardware and software developers to help the company create vehicles with better mileage and to help consumers better manage their driving habits.
“We have found that there are so many factors impacting the fuel economy people get, especially with hybrids across the industry, that we want to be the company that gives drivers the best tools to manage their own personal fuel economy,” said Ford head of global marketing James Farley. To that end, Ford is inviting app developers to access Ford’s vehicle technology platforms to find ways to help drivers improve their fuel economy, and is offering cash awards of up to $50,000 to those that work.
It is unusual for a car company to open up its engineering architectures and platforms to outsiders for fear of compromising intellectual property. Ford may be the first to open up both its hardware and software platforms to outsiders who want to pitch the company on new solutions to improve fuel economy.
Ford’s own C-Max hybrid is advertised to get 47 mpg. But many members of the press and public have been complaining that the car does not get anything near that in real-world driving. The 47 mpg is a number that was set by Ford testing the vehicles according to standards set by the Environmental Protection Agency.
According to one study, Ford is the “most influential” brand on the topic of fuel economy.
Farley says that Ford is in talks with the EPA to modify the testing procedures, especially around hybrids. “Hybrids is where you see the most variability in how personal driving habits and weather conditions and other factors most greatly impact real-world fuel economy,” says Farley. The Ford executive mentioned weather and how aggressively a driver works the gas pedal as two big factors.
Hyundai and Kia last year settled a dispute with customers and lawyers who filed a class action suit against the companies, which have related ownership in South Korea, over the fuel economy of its vehicles. The company issued cash cards to customers to make up for the real-world shortfall in the fuel economy they wee getting. Lawyers are organizing class actions against Ford, as well, over C-Max performance.
Ford, according to New York research firm Appinions, is the “most influential” brand in the auto industry on the topic of fuel economy. Additionally, Farley said the company’s research shows that fuel economy credibility and performance is the number-one buying consideration among customers, especially women, who control or influence some 75 percent of all new-vehicle purchases.
Farley also hinted that the auto industry, with or without help from government regulators, needed to clean up the often confusing fuel economy claims that companies advertise. Companies often advertise only the higher highway fuel economy, rather than the combined city and highway fuel economy of vehicles. Many advertise “Best In Class” fuel economy, “Most fuel efficient,” and the like. “If my kid is in a class of 100 and 93 are called ‘best in class,’ I start to wonder what the point of the designation is,” said Farley.
• The Great Recession and How it Changed our Business
- Business is stabilizing; optimism is on the upswing
- Automotives are confident
- Bigger changes in sight
- Several emerging trends will transform business
- All driven by customers
1. Luxury is No Longer Defined by Price, Size and Exclusivity
- Luxury used to be about size, price, lack of attainability
- 60% of people expect luxury sedan to cost less than $60K
- Consumers are looking for luxury in smaller sizes
- Small utility outpacing other luxury segments
• Nearly 60% growth in 2012
• 200% growth in last 4 years
2. Millennials, Hispanics and Women are Transforming the Marketplace
- Millennials
• What does their future look like?
• 77% say raising family “essential” or “very important”
• Over 5-10 years, expect them to start marrying
• What do they want?
• Sense of entitlement / discerning / high expectations
• 4X as likely to buy luxury than Gen X’ers
• Over-index on preferences for prestige; taste for luxury
• Prices dropping – first or second car could be luxury
- Hispanic customers
• U.S. Hispanic population grew 43%, 2000-2010
• More than half of overall population increase of 27 million
• Becoming more affluent
• 126% increase in US Hispanic households making more than $100,000/year
• Total net worth of $500 billion
• Buying luxury cars faster than overall market – luxury registrations up 53%, 2002-2006 vs. non-Hispanic at 13%
• Mercedes C-Class and BMW 3-Series among top choices in luxury
- Women
• Rapid urbanization drawing women to cities
• Trading agricultural work for business
• For the first time, female buyers outpacing males – 56 percent millennial vehicle buyers
• One billion women entering middle class globally by 2020
• Many buying vehicles for the first time
• Significant growth – about 6 ½ million additional units
• Huge potential to drive luxury growth in developing world
• Brazil, India, China, Russia, Turkey – better education / white collar employment
• China – women contribute half of household income (20% in 1950s)
• Top purchase reasons different in emerging markets vs. U.S.
• China – Exterior Styling, Reputation
• U.S. – Gas Mileage, Reliability
3. The Mobile Experience
- Shift in how people consume/use information
- Driven by mobile experience
- Mobile growth continues to explode
- Important to millennials and women
• Women 18-29 are social media “power users” – 89% using sites, 67% everyday
- Profound impact on marketing, sales and service
• Fuel Economy is Confusing for Consumers
- Top priority for customers and for Ford
• 2003 – 28% light duty or passenger vehicles in NA equipped with 4-cylinders; V8s – 25%
• Industry on pace to sell 51% 4-cylinders; 15 percent V8s
• EcoBoost – important element of our plan; sales accelerating
• 60,000 EcoBoost-equipped vehicles each month – nearly 4x rate vs. 1 year ago
• More than half of EcoBoost sales are 4-cylinder engines
• Adding two EcoBoost engines to Fiesta, including 1.0-liter, 3-cylinder
• Sold almost 13,400 electrified vehicles in first 2 months
• 373% EV sales increase in Feb 2013
• 17% share of hybrid/electrified market
• Ford hybrid milestone last month – 250,000 sold
• Arms race for leadership causing increasing confusion and dissatisfaction
- The challenge: Helping customers better understand what to expect from their driving behavior
• Rated differently in other parts of world
• Millions of factors – weather, geography, temperature
• Biggest factor by far is the driver
- Need to help customers understand “personal fuel economy”… based on their own personal experiences and give them the tools to see, know what to expect and how to improve
• Vehicles produce a wealth of real-time data
• Cars are rolling computers …
• Hundreds of sensors – speed, steering, temperature, tire pressure, fuel consumption and more
• Pair that with capabilities of a smartphone …
• Amazing opportunity to gather accurate information about personal fuel economy
• Drivers could opt to share data through cloud with other drivers
• With enough consumers sharing … get crowdsourced data of people who live near you, drive like you
• Yet another element of more engaging, open, connected driving experience we want to provide
Fuel Efficiency App Challenge
- So today, we are taking initiative to help define “personal fuel economy…”
- Exploring ways to help our customers more easily access their on-road fuel economy performance
- Proud to build on this progress and announce the Personalized Fuel Efficiency App Challenge
- Looking for the best way to aggregate, visualize and define “personal fuel economy…”
- Creation of an application to share, compare, learn how to improve your own fuel-efficient driving (via behavior, routing, traffic, ride sharing, etc.) …
- Developers will utilize OpenXC research platform for access to vehicle data
- Prizes totaling $50,000
- Learn more at “ford.challengepost.com”
- Result will be significant innovations that empower customers via access to own personal fuel efficiency data
