Will Ford’s new engines be a day late, dollar short?
Speaking at the Los Angeles Auto Show, Ford CEO Alan Mulally said the automaker is committed to improving miles per gallon efficiency and reducing emissions via implementing technological advances.
And the technological advances Ford’s looking to incorporate to help stabilize its market share? Direct fuel injection, smaller-cylinder engines with turbo charges, lighter weight materials, hybrids, and diesels, among others. Moreover, Mulally said Ford’s goal will be to increase fuel economy without sacrificing engine performance or auto safety. Ford’s shares drifted three cents lower to $7.95 in Thursday afternoon trading.
In general, analysts were encouraged by Ford’s presentation, despite the company’s lack of a time-table for efficiency improvements or announcement of changes to specific vehicle models, other than a promise to apply diesel fuel and technology to improve the mpg of its popular but fuel-guzzling F-150 pickups.
MPG and emissions
Further, the initial read of analysts suggests that auto reviews will cut Ford some slack regarding mileage and emissions improvements — in part because it is Ford’s first systematic effort to regain competitiveness versus Asian and European imports, and in part because the technologies hold considerable promise.
For example, turbochargers have the advantage of being used only when needed, as when a driver accelerates rapidly. The turbo, when combined with smaller cylinders, can reduce fuel consumption in typical driving conditions. However, turbos often require premium fuel, so any fuel savings will have to compensate for the higher fuel price.
In addition, lighter-weight materials and assembly plans that substantially reduce weight have the capacity to increase fuel economy by eye-opening amounts.
Meanwhile, diesel technology, which can increase fuel efficiency by 20%-35% compared to comparably-sized gasoline engines, is being viewed by analysts as a bridge, for some models, until Ford figures out its long-term, new engine technology strategy: hybrid, electric, or fuel cell. None of the latter technologies has advanced to the point where the tech could be deployed profitably on a mass scale, involving tens of millions of vehicles.
The prognosis?
Finally, part of analysts’ mild treatment of Ford can perhaps be attributed to concerns about the global economy’s continued expansion, the panorama of auto competitors, and the sheer magnitude of Ford’s task. To say these are not heady times for Ford would be putting it diplomatically. Very diplomatically.
All of which begs the legitimate (and possibly foreboding) question that, given the undeniable realities of the global auto market, will Ford’s new engines and technologies be a day late, and a dollar short?
