BEATEN PATH

How Ford is trying to become more like Apple

Obsession
Getting There
Obsession
Getting There

In 1913, Henry Ford’s moving assembly line slashed the production time of a Model T—and with it, the price.

Ford Motor Company eventually sold around 15 million units of the world’s first mass-market car before it discontinued production in 1927. After World War II, Ford rolled out new models, including trucks, for their increasingly demanding—and wealthier—consumers. This consumer group coveted the vehicles as a luxury, but also needed them to travel from their brand-new suburban neighborhoods to the workplace.

The Model T has come and gone, but Ford has held onto its crown as the purveyor of the best-selling vehicle in America for decades. Thanks to Americans’ love of giant cars, Ford’s F-series pickup truck has been the best-selling vehicle in the US for 35 years.

But while Ford spent more than a century successfully getting as many cars as possible onto the world’s roads, it’s now realizing that it may have to help take a few cars back off. The auto industry is now challenged worldwide—traffic-and pollution choked cities have led city governments to limit the number of vehicles on their streets. Meanwhile, more and more potential consumers are deciding they just don’t need to own a car.

Apple, a company 73 years Ford’s junior, has been down this road before. While Apple originally sold user-friendly computers, it rose to prominence (and value) by diversifying. This means Apple realized it had to do more than just sell products like the (now ubiquitous) iPhone—it needed to branch out into services that could withstand the seasonal market trends of personal electronics sales.

And so, over the past 14 years Apple has developed reliable revenue streams from its online marketplaces for apps, music, and other forms of entertainment, as well as its payment platform.

Now Ford is refocusing its business in a similar way. “For many years, it was always about how many vehicles you can we get through a certain area, whereas now we flip that on its head, and say how many people can you get through a certain area?” Ford’s CEO Mark Fields tells Quartz. “Our view is that there will be less vehicle density.”

To start, Ford is exploring commercial driverless vehicles, ride sharing, and investing in automobile software. It has also invested in the bike-sharing company Motivate.

Last year, Ford acquired San Francisco upstart Chariot, an on-demand van for ride-sharing commuters. The company says it expects to expand the service to include eight cities this year. Fields estimates that every Chariot van on the road takes 25 cars off of it.

For those with access to a Ford vehicle, Fields envisions more revenue coming from “digital services” like its FordPass app, which allows users to view parking options ahead of time and also schedules oil-change and other maintenance appointments automatically by syncing up with the driver’s calendar. On some models it can even start the vehicle.

Now Ford thinks it needs a broader business if it wants to remain relevant in the future.

We’re looking at the increase in pollution and looking at changing consumer habits of people going from the mindset of owning vehicles to owning and sharing, and in many urban areas, having access versus ownership,” Fields says, adding that congestion is an economic threat to cities.

Ford isn’t alone in this race to diversify its business. Competitors like General Motors and Audi are similarly launching car-sharing programs and investing in platforms that cater to a generation of consumers that may not have the funds or desire to own a vehicle.

“Any business has to look 10, 15 years out,” Fields said.

While Ford is changing its business model to look a bit more like Apple’s, it may one day encounter the tech giant on its home turf: Apple recently began testing autonomous-car technology.

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