Ford latest to make “mobility provider” transition: Video

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Automakers in general see their future as being mobility providers rather than solely manufacturers of cars and trucks.

This change in thinking is in direct response to changing trends like the rising popularity of the sharing economy, where, particularly in congested cities, the traditional car-ownership model is becoming obsolete. With the eventual arrival of fully autonomous cars, this trend is expected to accelerate rapidly as people lose the emotional connection one gets from actually driving a car.

The major automakers have seen the writing on the wall and are positioning themselves by expanding into mobility services. BMW was one of the earliest to make the move and more recently General Motors Company [NYSE:GM] has been spending up big by buying mobility firms. Now Ford Motor Company [NYSE:F] has launched a standalone division to focus on mobility services.

Called Ford Smart Mobility, the new division, headed by former Steelcase executive Jim Hackett, will focus on designing, building, growing and investing in emerging mobility services. And in addition to developing its own services, the division will collaborate with start-ups and tech firms.

Initial areas of focus will be on in-car connectivity (think infotainment systems and apps), autonomous car development, and car and ride-sharing services. There will also be a focus on the customer experience. For example, Ford Smart Mobility will be responsible for customer data collection and analysis, such as vehicle usage patterns. The division will also investigate different sales models such as memberships and Apple-style stores instead of traditional dealerships. The first of these new stores, known as a FordHub, will open later this year in New York City.

One of the major threats for the traditional automakers is the new competition faced by outside players, primarily technology firms. Uber is making moves to be a leader in autonomous car ride-sharing and tech giants Apple and Google are close behind.

“Ford Smart Mobility and expanding into mobility services are significant growth opportunities,” said Mark Fields, Ford CEO. “Our plan is to quickly become part of the growing transportation services market, which already accounts for $5.4 trillion in annual revenue.”

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