DETROIT — Ford Motor Co.'s segment-leading commercial vans and trucks provide steady profits year in and year out, but they get little of the attention or publicity that its higher-profile retail business generates.
That's about to change.
The automaker's commercial offerings will take a starring role under CEO Jim Farley and the "Ford+" growth plan he laid out last week. Ford is separating the part of its business aimed at commercial customers into a standalone unit called Ford Pro, and it expects to nearly double the revenue it generates to $45 billion by 2025.
The company hopes Ford Pro will help it boost recurring revenue from data-focused subscription services, reduce ownership costs for fleet operators and grow its commanding 43 percent share of the commercial van and truck market.
Farley called the new entity "one of the most important strategic initiatives at Ford in many, many years." Wall Street appears to agree.
Ford shares surged last week to a five-year high after Farley's investor presentation, when executives also laid out plans to increase the company's investment in electric vehicles and boost sales of EVs to 40 percent of global volume by 2030.
"Highly encouraging to see a coherent strategy under world-class management," Morgan Stanley analyst Adam Jonas said in an investor note. "What stood out to us the most is that the company is doubling down on where it is strong or can be strong: (a) relationships with commercial customers, (b) authentic/experiential consumer and commercial brands, (c) exiting/partnering on areas where the company has a low likelihood of winning."
Ford is banking on fleet operators making EVs such as the E-Transit and newly unveiled F-150 Lightning successful.
"More than any other customer segment, our commercial customers will lead the connected and electric vehicle tech transformation," Ford Pro CEO Ted Cannis said. "The benefits directly hit their bottom line."