As Ford Gazes Into the Future, It Should Keep an Eye on the Present

Cars and Drivers

Published: June 16, 2016 9:35 am

Last Updated: January 13, 2020 6:44 am

With an era of self-driving cars on the horizon, and faced with the rising millennial generation that shows little interest in auto ownership, Ford Motor Co. (NYSE: F) must be wondering about its future. Perhaps that’s why it set up the Ford Research and Innovation Center in Palo Alto, the heart of Silicon Valley, last year.

Projects at the center include research on human-machine interfaces to find out how drivers like to interact with their vehicles. The company is investigating systems that will change the thermostat setting in the home as the car nears or that will alert the driver of an emergency situation at the home. And like other Ford labs around the world, the Palo Alto center is also researching autonomous cars.

Keeping an eye on the future may be a good idea, as Ford’s current circumstances are less than glowing. Sales in China, the world’s largest car market, and one that Ford, like many manufacturers, has been looking to for future growth, were not inspiring in May. And even struggling Fiat Chrysler Automobiles N.V. (NYSE: FCAU) outsold Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) in the European Union in May.

Sales of Ford’s F-150 continue to be a bright spot for the company, as the pickup has been a bestseller for years. However, Bloomberg points out that even after the popular truck was overhauled with an aluminum body and smaller but supercharged engine, it still does not meet federal emission and fuel-economy mandates, which will only continue to grow more stringent in the years ahead.

Ford investors don’t seem too thrilled these days either. Though the stock is up more than 12% from the 52-week low back in February, it is still down more than 13% in the past year and more than 22% in the past two years. The stock has also been one of the most shorted on the New York Stock Exchange of late. The number of shares sold short increased about 2% in the most recent settlement period to more than 147.02 million, or nearly 4% of the total float.

Ford’s U.S. sales decreased 6% in May, despite the ongoing popularity of its pickups and sport utility vehicles, boosted by still low fuel prices. While gazing into the future may be a good thing for the company in the long term, keeping an eye on how to lift sales in the short-term is what it will take to excite both drivers and investors now.

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