Ford points out why Fiesta doesn’t make sense in 2025 and they’re betting on an electric car

Gunnar Herrmann has been with Ford for over 20 years. During this time, he performed various jobs, including running a company in Germany. Now, as a member of the car industry watchdog group, he has made public his views on the current state of the European market and its future.

WHO? Media Interview Kölner Stadt-AnzeigerGunnar Herramann stood out at Ford throughout his career. During his more than 20 years with the company, he played various roles, including running Ford in Germany, the most important country for the company’s presence in Europe, since its headquarters are there on our continent.

Although he left the company’s leadership in 2021, he continued to serve in the company’s senior management. In an interview with a publication in Cologne, where one of the Ford plants most affected by the decline in the company’s car production is located, the manager points out the reasons that, in his opinion, are the cause of the situation that we are experiencing at these moments.

Eternal Promise. Herrmann points out a serious mistake in his interview: “The philosophy that sold millions of Volkswagen Golfs or Ford Focuses is dead. Car sales won’t be enough.” The manager believes that hardware It is no longer enough to put a car on the market. “In the future, money will be earned to a greater extent through digital architecture, that is, paid use of applications and functions,” he emphasized.

He softwarehas become the new automotive Mecca. More and more manufacturers expect it to be differentiated. In China, of course, it seems that this course of action has served to attract new customers and convince old followers of firms such as Volkswagen or Porsche. Ford itself has confirmed that it is surprised by what is being offered there.

The big question is whether the European market is ready to accept this new dynamic. Manufacturers are having trouble monetizing their subscription-based offerings. software and some, like BWM, have withdrawn some subscription packages such as heated seats.

“We will be left behind”. With this powerful phrase, Herrmann defended Ford’s transition to electric vehicles. “Small producers could face fines of tens of millions of euros. Volkswagen could face a fine of 250 million euros. (…) We can ignore climate targets and continue to build the old internal combustion engine. But the world we see continues to evolve. and then we will only be left behind,” says Herrmann.

In his statements, he refers to new CO2 emissions limits that will come into force in 2025. From next year, the average fleet of cars sold in Europe will have to not exceed 93.6 g/km. Until now, weight has played an important role because it increases the maximum permissible emissions limit. That won’t happen next year, and the only way to avoid fines is to increase sales of plug-in hybrids and electric vehicles.

“Drunk on their own”. “As a German car industry, we stopped and were perhaps too drunk on ourselves and our past,” notes Herrmann. In China, “with a strategy of selling predominantly premium products, German automakers are no longer moving forward because domestic competition is now technologically superior to them.”

“They offer reasonable products at comparatively low prices and increase sales in the country through assistance and discounts. And they’re attracting a younger crowd by offering more digital cars,” says a former Ford executive. This was precisely one of the unsolved problems of Western companies that had problems reaching generation Z.

Implications for employment. The transition to an electric vehicle, according to Herrmann, is impossible for Ford unless they abandon the internal combustion engine. “If we want profitable structures and products, then we must focus on one technology. Parallel production of electric vehicles and internal combustion engines is ineffective,” he noted.

German industry is going through difficult times. We’ve spent a year in which electric vehicle sales have plummeted as a result of the sudden end of purchase subsidies. Due to lower sales, car production in Germany has fallen by more than 8%, with brands such as Volkswagen looking to cut their workforce. From Skoda they are sending a message that battery costs must be reduced, but also that they must “reduce the number of people overall and introduce more artificial intelligence into our processes.”

Future? “Ford said from the beginning that it wouldn’t be profitable (in electric mobility) until 2027 or 2028. Unfortunately, the situation has worsened due to a weak market. We could make the Ford Fiesta a little longer, but that doesn’t make much sense. new EU emissions limits,” says Herrmann.

“What we are experiencing is the consequences of transformation,” the manager concludes. The big question is where this transformation will take us at the operational level. Europe is trying to protect itself from Chinese electric vehicles, but there are already several companies that claim that they will enter the European market by producing them in the East or in countries that have special agreements with the EU (Turkey or Morocco). At the same time, giants such as Volkswagen or Stellantis continue to threaten layoffs.

Photo | Ford

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