Ford Pro’s attached service penetration continues to grow as the company aims to develop a more stable portfolio.
Ford Pro, Ford Motor Co.’s suite of solutions for commercial and government vehicles and fleets, aims to remove the challenges of the cyclical nature of the transportation industry by growing its attached services business, John Lawler, chief financial officer at Ford Motor, said during a presentation at Deutsche Bank Global Auto Industry Conference on June 11.
“The way you become more resilient and less cyclical as a business is you grow those services; you grow that penetration there,” Lawler said. “If you look at the Ford Pro business, when you look at the attached services, the physical services, we’re going to grow from roughly 30% or 35% to 50%.”
Meanwhile, Ford Pro has more than 560,000 customers buying its software-attached services, Lawler said.
“Our software services are growing over 40%,” he said. “We’re going to increase our penetration of connected vehicles from roughly 30% to 60%, so it’s a cycle there that’s happening.”
Part of Ford Pro’s growth also comes from its ability to sell products beyond vehicles, Lawler said.
“The great thing about the Ford Pro business is not only are we selling them the vehicles, but we’re also selling many of them the charging networks for their depots, the software to charge, the fleet management software, etc.,” he said. “Then we’re servicing those vehicles for them, so we have that ecosystem that’s built out and we think it’s accretive.”
Ford Pro outlook
While Ford Pro continues to grow, the company expects some pressure in the remainder of the year, Lawler said.
“Through the second half, we’re projecting for some pressure on the top line and we’ll see where that comes out,” Lawler said. “We’re starting to move into the ’25 model years because in our commercial business, we’ll go out and we’ll do two major contracts with our larger fleet customers … so we’re about to go off and do that right now on the first tranche of the ’25 model years.”
As a result, Ford believes that Ford Pro’s strength and margins will remain sustainable, Lawler said.
“When we look at the business as we grow into those physical services and those software services, there’s going to be strength continuing there,” he said. “It’s going to make the business less cyclical, and we believe those mid-teen [margin] targets are sustainable and achievable over the life and moving forward for the Ford Pro business.”
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