Ford Launches Team To Explore Internet and More

By Amy Gilroy -- TWICE, 8/14/2008

Traverse City, Mich. — Ford is looking to offer Internet capability and expand on the Sync, HD Radio and Sirius real-time traffic, now that its popular Sync car stereo system is driving profits for the automaker.

Ford announced yesterday it will form a 40-person customer connectivity group to build partnerships with “world-class service providers” to deliver Internet and other services in a way that limits distractions. Ford said it plans to leverage its current Sync, Sirius Satellite Radio, Sirius Travel Link, Ford Works Solutions and HD Radio options through the new team.

Ford will offer the Internet for infotainment to customers “soon,” Doug VanDagens director of the new team (as yet unnamed) told TWICE. Ford already plans to offer the Internet for business use in certain trucks this fall.

The new connectivity team is charged with adding connectivity of all types to the vehicle, whether it is new ways to connect portable devices to the Sync car stereo, or new data services through HD Radio or emergency services from the cellphone, said VanDagens.

Mark Fields, Ford's president of The Americas, said yesterday, “These 40 people will work at a clock speed that, frankly, neither the industry nor Ford has ever seen before,” adding that the company will “continue delivering game-changing customer features — profitably — by strengthening the alliances we've forged with some of the best technology companies in the world.”

The effort is part of Ford’s new strategy to use technology to siphon more profits from smaller cars, which will now play a greater role in its production.

Fields said, “In-vehicle connectivity is particularly important to small car customers, who want to downsize their vehicle but not their smart technologies or creature comforts.”

The news follows a recent announcement that Chrysler will begin offering a $499 cellular/Wi-Fi “hotspot” through Chrysler dealers to allow passengers to connect to the Internet on their laptops, gaming machines and other devices.

Ford aims to shift its sales mix from the current 52 percent share of trucks and large SUVs and 30 percent share of passenger cars to an even mix of 38 percent each and is relying on technology to make smaller vehicles a more profitable undertaking, particularly with younger drivers.

Millennials, or 14- to 29-year-olds, are reaching driving age at the rate of about 11,000 per day. By 2010, this group will represent 28 percent of the driving population.

Ford noted that its typical take rate for optional navigation systems is about 20 percent, but by offering more technology and other creature comforts, it has seen its take rate improve dramatically on the Ford Flex. This vehicle has a navigation take rate of 38 percent for a voice-activated version that also has an integrated Reverse Camera System, Sirius Travel Link (for traffic, weather, gas price and movie listing updates) and a 10GB hard drive for storing music.

On the Focus, the take rate on the Sync has driven the transaction price for the car up by $750 in year to date sales, and Ford sells “just about as many vehicles with Sync as without it,” said Fields in a speech here.

Fields also said Ford has “just tipped the 2 million vehicle mark” on Sirius satellite radio.