How is Ford organized in Latin America?
The company has divided South America into three areas. One bloc is Brazil, another Argentina, and the third is the West Coast and Direct Markets. This latter group, which consists of Chile, Colombia, and Peru, is similar in that each has a more open economy. Ecuador, Bolivia, Uruguay, and Paraguay are also part of this group, and we call them direct markets, where dealers and distributors place direct orders for our products from different sources. Finally, there is Venezuela, where we have an assembly facility in idle awaiting economic conditions to improve. Chile, Colombia, and Peru have their own commercial force and stocks to serve the markets; the vehicle sales and service divisions operate under the same structure.
What are the benefits for Ford of operating under a West Coast market?
The strategy behind the creation of this market was to unite countries with similar characteristics. This means we would have a similar product that can be equally distributed in each of these markets. If I have an Explorer in Colombia, we would sell the same product in Chile, for instance. There is a great opportunity to make synergies since this group of countries closed with 1.1 million vehicles in 2019. Chile sold 386,000, Colombia 264,000, Peru 170,000, and Ecuador 133,000. Bolivia, Uruguay, Paraguay, and Venezuela collectively sold 130,000 vehicles. In all, Ford sells 4% of that big market, with an emphasis on SUVs and pickups. We are in a volatile market and working in this region makes us more agile. For instance, in 2019 we had a large amount of stock in Chile and were able to send committed production volume to other markets during the social unrest in 4Q2019 to reduce the carrying costs of inventory. There are many things that we put together to make the operation more effective.
What benefits can the client see from this consolidation?
Clients can benefit from the volume scale and similar product specifications within the markets of the group that allows access to products that did not exist before because the market was not big enough to import some of our vehicles. One of the characteristics of Ford is that all our vehicles are equipped with the latest safety equipment, a great deal of innovation and technology. When we look at the marketing indicators, Ford is seen as one of the most innovative companies in the sector as well as one of the most environmentally friendly.
Do you plan to launch a hybrid vehicle?
In 2019, we launched our first hybrid, the Fusion, and in May 2020 we will launch the Escape, our second hybrid vehicle. The car industry is going through a radical change that people did not foresee five years ago. Now, there are several countries in Europe, including the UK, that have said that by 2035, cars that use only fossil fuel will not be allowed in circulation. This is a reality that will also influence these markets in South America. Ford has shown its commitment to maintain its leadership in new technologies; the latest announcements on electric versions of the Mustang Mach E and F-150, the two most iconic vehicles from the brand, is full proof of that. In the meantime, Ford is offering vehicles equipped with lower displacement EcoBoost fuel engines capable of performing better with less fuel consumption and emissions.
How are you adapting your portfolio to clients' preferences?
We are focused on delivering well-equipped products with great quality and the latest technologies to delight the customer. Our product portfolio will strengthen with well recognized entries in the most aspirational segments of the market, including SUVs and pickups. We will continue to strengthen our brand with value-added features and synergies from products coming from different sources benefiting from free trade agreements to boast our leadership in innovation.