Annual Report 2011 - Ford Motor Company

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Drive Quality. We have made significant strides in recent years to achieve world class levels of quality and
desirability. This has been accomplished by following an established, global set of disciplined, standardized processes
that are aimed at making us the world's leader in automotive quality. Via our common global management team, we are
leveraging our assets by eliminating duplication, implementing best practices, and utilizing a systematic approach to
quality. This integrated approach is apparent in the recently-launched Ford Fiesta and Focus, which truly are global
products earning high customer satisfaction levels. External inputs are confirming our internal assessment, with the
Fiesta labeled the most appealing sub-compact car in the JD Power and Associates APEAL study in 2011. The Ford
F-150 won in its segment as well. The F-150 shines again with the best initial quality in its segment, while the Taurus also
received an award in the JD Power and Associates Initial Quality Study. For overall dependability, JD Power and
Associates ranked the Fusion and Mustang, and the Lincoln MKZ and Navigator, as the most dependable vehicles in their
respective segments. The Lincoln brand led all brands as the most dependable sold in the United States. The cumulative
effect of our disciplined global quality standards has been improved quality and owner satisfaction. For example, our
global repair rates at three months in service have decreased by over 56% since 2005. Going forward, we expect our
global processes to lead to ongoing continuous improvement.
We are committed to providing leading edge technologies customers want and value, including MyFord Touch, which
increasingly is playing a pivotal role in defining the future of automotive interiors and enhancing convenience, safety, and
overall driving experience across a wide range of vehicles. Since MyFord Touch launched last fall, we have held four
customer clinics in which hundreds of owners have spoken directly with Ford engineers about their experiences with the
new technology. Owner feedback was clear and consistent, revealing that MyFord Touch was a key purchase factor. Our
customers also highlighted that MyFord Touch could be faster and feature simpler graphics that are easier to use. While
owners reported that they loved the system, there were distinct areas in which they wanted improvements. Earlier this
year, we began delivering on their requests, starting with more detailed instructions and information on how best to utilize
the capabilities of the system. Moreover, we have worked on a broad set of performance upgrades to the system for
rollout in 2012 which will enhance the ownership experience based on customer feedback.
Drive Green. Our commitment to sustainability relies on a balanced approach, both in application of fuel economy
technology as well as breadth of offerings. We are focusing on advancing conventional vehicle technology that touches
millions of new vehicles each year and provides affordable fuel economy to the masses. At the same time, we are
developing next-generation propulsion systems that represent an important part of the long-term future for the industry.
We remain committed to our goal to deliver leadership or among the best fuel efficiency in every major new vehicle
launch. Nearly one-third of Ford's vehicle lines will feature a model with 40 mpg or more in 2012 - a claim no other fullline
automaker can match. Additionally, the 2013 model year Fusion is projected to deliver the best-in-class fuel economy
in any of three powertrains -- gas, hybrid, and plug-in hybrid.
The implementation of our EcoBoost ® family of gasoline engines is well established and a major part of our
sustainability strategy, delivering both exceptional fuel economy and performance. By combining direct fuel-injection and
turbo charging, the EcoBoost engine can deliver up to 20% better fuel economy and up to 15% fewer CO2 emissions
versus larger-displacement engines, without sacrificing driving performance. The 3.5-liter EcoBoost V6 engine was
introduced in 2009 and now is available in the Lincoln MKS and MKT and the Ford Taurus SHO, Flex, F-150, and will be
in the two new Police Interceptors. The F-150 V6 line-up has exceeded expectations with EcoBoost - a major reason
V6 sales have grown to over 50% of F-150 retail sales.
The 2.0-liter I4 EcoBoost was launched in 2010 in Europe with the Ford Mondeo, S-MAX, and Galaxy. In 2011, the
2.0-liter EcoBoost made its North American debut in the Explorer and Edge as well as Falcon in Australia, and is planned
for the 2013 model year Focus ST, Escape, Fusion, and Taurus. The 2.0-liter Mondeo also was the first EcoBoost
introduced in China, with follow-on introductions on the way. The 1.6-liter I4 EcoBoost launched in Europe in 2010 with
the Focus, C-MAX, Grand C-MAX, Mondeo, S-MAX, and Galaxy and is planned for Focus in Australia, as well as Escape
and Fusion in North America. Additionally, an all-new, fuel-efficient 1.0-liter I3 EcoBoost engine is planned to debut in the
all-new EcoSport for India, and will be available in the B-MAX, C-MAX, and European Focus. In North America, over time
we plan to triple the production of EcoBoost-equipped vehicles. By 2013, annual global production of EcoBoost vehicles
is expected to reach 1.5 million units.
In Asia Pacific Africa, EcoBoost - along with other innovative global technologies such as the advanced 6-speed
PowerShift and automatic transmissions - is a major part of our plan to deliver fuel efficiency improvement of up to
20% across our product lineup by the end of 2012 compared with 2008. For example, in Australia we introduced in 2011
an advanced liquid-injection petroleum gas ("LPG") system for the Ford Falcon, providing customers with the most
advanced LPG technology on the market.
Ford Motor Company | 2011 Annual Report 31