Ford Pro Paying Off: Fleets Become Important Again

Ford may have taken some heat for lapsing quality control (something it’s very clearly attempting to address) in recent years. However, there is one aspect of the business that’s trouncing the competition. Despite automakers sometimes viewing a reliance on fleet sales as a problem, plenty of companies have had them work in their favor. This includes Ford, which has leveraged Ford Pro as a way to profit off vehicle data services and help integrate the in-house upfitting of commercial vehicles.

MSNBC is claiming that the fleet business is becoming extremely important for automakers. In truth, this is often the case whenever a market looks like it’s about to run lean. Despite fleet sales often being looked down upon, they’ve saved more than a few automakers when the retail side of things starts cooling down. However, data management has opened up new revenue streams and business opportunities for automakers trying to make the most out of fleet volumes.

From MSNBC:

The Dearborn, Michigan-based automaker has turned its fleet business, which includes sales to commercial, government and rental customers, into an earnings powerhouse. And Ford’s crosstown rivals General Motors and Chrysler parent Stellantis have taken notice, restructuring their operations as well.

“There’s much more of an emphasis now on profitability and how fleet can help that,” said Mark Hazel, S&P Global Mobility associate director of commercial vehicle reporting. ”[Automakers] are looking at how they strategically go about this. It’s been a very targeted approach with how they deal with fleets.”

Many fleet sales, especially daily rentals, have historically been viewed as a negative for auto companies. They are traditionally less profitable than sales to retail customers and are used by automakers at times as a dumping ground to unload excess vehicle inventories and boost sales.

But Ford has proven that’s not always the case by breaking out financial results for its “Ford Pro” fleet business. The operations have raked in about $18.7 billion in adjusted earnings and $184.5 billion in revenue since 2021.

Your author first saw the revised version of Ford Pro during a press event focusing on the company’s Super Duty pickups. While it was not the focus of the event, we were given a rather thorough rundown and allowed to see how it interfaced with software used for fleet management.

Like most American automakers, Ford knows how to build full-size trucks. But commercial trucks often need to be outfitted with all sorts of hardware to do their job. This includes things like plows, upgraded exterior lighting, aerial work platforms, and whatever else is required so the vehicle can accomplish a given task.

In the past, these systems also needed to have a physical panel installed to control them — meaning companies needed to to look to the aftermarket. However, Ford has started to integrate more switchgear into its trucks, with Ford Pro likewise integrating programmable controls into the default infotainment display. In many cases, what once required a physical switch to be fitted to the dashboard can now be handled by diving into the preexisting touchscreen menu or redundant programmable buttons with a little help from the OEM.

Now that all vehicles are connected to the internet, Ford Pro likewise allows companies to monitor and even adjust the above remotely. Did one of your employees mistakenly leave the lights on one of the vehicles or need to hop into a locked truck to grab something? That can be addressed without sending anyone back to the lot or management office, assuming you have the correct credentials and an internet connection. Data and connectivity are essential aspects of Ford Pro and are a big part of what makes it profitable.

“No other company has Ford Pro. We intend to fully press that advantage,” Ford CEO Jim Farley stated during the company’s second-quarter earnings call, and with good reason.

On private vehicles, data harvesting seems largely unacceptable and crosses a line in terms of business ethics. It’s scummy. But commercial vehicles are owned by the company, which has a vested interest in having as much information as humanly possible. While drivers should still be afforded some amount of privacy, being able to access telematic data in real time is invaluable to fleet operators. Ford Pro allows businesses to track maintenance schedules more easily and gives management unprecedented levels of information about individual vehicles in real time. Ford likewise benefits from being able to access that data.

When asked, Ford representatives seemed hesitant to verify Ford Pro’s data harvesting before discussing the issue with higher ranked employees over the phone. But they did indeed tell me that would be the case after a few minutes. My takeaway was that Ford Pro would be extremely lucrative for Blue Oval based upon a single short presentation — and that seems to have been the case — even if I still have some misgivings about how the privacy angle is being handled.

“Breaking apart the fleet channel, we see that Commercial sales have been the weakest. And zooming in further, there are just two [original equipment manufacturers] that appear especially challenged: STLA and, to a lesser extent, GM,” Wolfe Research said in an investor note from earlier this week, noting that both companies recently placed a stronger emphasis on the fleet side of the business.

But Ford’s commercial volumes increased by 7 percent this year compared with 2023, Wolfe explained. He also noted that, while the figures haven’t been made publicly available, Ford likely does more fleet business than General Motors and Stellantis combined.

GM has conversely claimed it sold the most fleet vehicles in 2023. But Ford claims that’s not true if you break down sales volumes into all customers who register their full-size, Class 1-7 truck or van under their business, rather than businesses that own five (or more) vehicles of a given brand.

Regardless, the above doesn’t incorporate the relevance of Ford Pro. Blue Oval has done everything possible to get the system into every kind of commercial it sells around the globe and has optimized it for just about every kind of business application one would expect. It’s not just for delivery vans and utility trucks. Ford Pro has been integrated into rental fleets and even government motorpools. Ford Pro has simultaneously been used to help businesses transition to EVs by managing travel routes in relationship to energy needs and even scheduling when vehicles need to be rotated onto chargers (which are likewise integrated into the Ford Pro ecosystem).

With above in mind, it should be glaringly apparent that it's not just the sales themselves that are important here. It’s the software and services, which Ford believes will garner $1 billion for the brand (all by themselves) in 2025.

The other manufacturers are following suit. Stellantis is relaunching Ram Professional and General Motors has rebranded GM Fleet as GM Envolve. Both are trying to incorporate software and connected services as a fundamental aspect of the business in a manner similar to Ford Pro.

This is all extremely bad news for aftermarket companies that upfit vehicles for commercial use. But it will undoubtedly lead to more business for legacy automakers by ensuring they’re following in Ford’s footsteps. It likewise means that the competitive edge provided by Ford Pro probably won’t last forever, even though the Blue Oval currently has a few years lead on the competition.

[Images: Ford Motor Co.]

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