Ford Pro’s Software Services Driving Profits for Commercial Vehicles

Introduction

Automakers are increasingly focusing on turning their vehicles into “mobility devices” to offer software services to customers. However, Ford Pro, the commercial vehicle division of Ford, has found success by selling software, like driver-monitoring services, to fleet customers.

Profit Forecast

Small and medium-sized fleets are projected to contribute 20 percent of Ford’s overall profit by 2026, according to CEO Jim Farley. Last year, Ford Pro generated $7.2 billion in pre-tax profits with a 12.4 percent margin, surpassing the company’s overall margin of 5.9 percent.

Growth Potential

Farley anticipates that Ford Pro will achieve between $8 and $9 billion in pre-tax profits this year. The division aims to triple the number of customers using connected-vehicle services in their commercial models.

Software Services Revenue

Subscriptions for fleet customers can add $2,000 in annual revenue per vehicle, with the potential to increase to $4,000-$5,000 if they opt for insurance through Ford. This additional revenue stream is enticing for fleet customers like the AA in the UK, which is experimenting with Ford Pro’s Upfit Integration System in its Transit vans.

Benefits of Upfit Integration System

The Upfit Integration System allows the AA to streamline service options through the vehicle’s infotainment screen, reducing the need for multiple specialized mounts and screens. This system enhances efficiency, minimizes distractions for drivers, and simplifies the user experience.

Electric Vehicle Focus

For companies adopting electric vehicles like the e-Transit, Ford Pro offers vehicle chargers and software for managing vehicle charging. This strategy is attracting more buyers to explore electric delivery vehicles and could potentially lead to a 50 percent profit increase for Ford.

Industry Response

Ford’s success has prompted other automakers to follow suit. Competitors like Stellantis Pro One have emerged, and GM reorganized its commercial vehicle division in response to Ford Pro’s achievements.

Conclusion

With a strong focus on software services for commercial vehicles, Ford Pro is driving profits and setting a new standard in the industry. By providing innovative solutions and enhancing the user experience, Ford Pro is reshaping the commercial vehicle landscape.