Ford (F) partners with Google for connected vehicles and cloud services

Ford Motor Co. (NYSE: F) announced a new partnership with Alphabet’s (NASDAQ: GOOG) Google unit to accelerate its digital transformation and expand its capabilities in connected vehicles. Shares were up 3.1% on Monday. Ford’s stock has gained 27% over the past one month.

Deal details

Ford and Google will come together to create connected vehicles and Google will provide cloud services to Ford. Under the new, six-year partnership, starting from 2023, a large part of Ford and Lincoln vehicles will be powered by Android with built-in apps and services from Google.

Ford will use Google Cloud’s artificial intelligence, machine learning and data analytics technologies to power its connected vehicles, expand its digital capabilities and improve its operations. A few examples include being able to concentrate on driving while using Google Assistant to get other things done, using Google Maps for better navigation and using Google Play for entertainment options.

Sales

Last month, Ford reported its fourth quarter sales numbers for the US, Europe and China. Total sales in the US declined 9.8% year-over-year to 542,749 vehicles in the fourth quarter of 2020. The largest decline of 41% was in cars. Trucks dropped over 12% while sales of SUVs were up 4%.  

In Europe, during Q4, sales dropped 15% year-over-year to 264,793 vehicles. Market share stood at 6.8% which was slightly down compared to a year ago. Retail market share in key European markets stood at 6%, which was also slightly lower than the year-ago period.

In China, Ford saw a 30% growth in sales to 190,916 vehicles in the fourth quarter of 2020 versus last year. The company saw double-digit sales growth for its Ford, Lincoln and JMC brand vehicles helped by a favorable product mix that matches customers’ preferences for SUVs and luxury vehicles. The Lincoln brand saw sales growth of nearly 75% followed by JMC at 28% and the Ford brand at nearly 25%.

South America restructuring

Ford also announced last month that it was stopping its production in Brazil in 2021 due to losses that were accelerated by the pandemic. While production at the Camacari and Taubate plants were to end immediately, the Troller plant will operate till the fourth quarter of 2021. The company will end the sales of EcoSport, Ka and T4 once inventories are sold.

The company will serve its customers in the South America region with electrified SUVs, pickups and commercial vehicles sourced from Argentina, Uruguay and other markets. Ford will incur special charges of approx. $4.1 billion related to this action, with about $2.5 billion in 2020 and about $1.6 billion in 2021.

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