Why Ford Is Making a Big Move Into High Performance

By Markets Fool.com

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Ford's upcoming Shelby GT350 Mustang, due next year, is the latest high-performance incarnation of its enduring pony car. But there are more hot Fords on the way: Ford said last week that it's making a much bigger push into high performance over the next few years. Source: Ford Motor Company.

Ford Motor Company said last week that it is making a major push into high performance, with "more than 12 vehicles" under development by a new global team dedicated to racing and high-performance cars.

The new team, called Ford Performance, unifies several regional units devoted to building and racing fast Ford products. It'll be led by Dave Pericak, a Ford executive who knows all about performance: He most recently led development of the all-new 2015 Mustang.

That's good news for fast-car (and fast-truck) fans. But high-performance vehicles aren't typically the ones posting great fuel-economy numbers. Given Ford's recent emphasis on making more fuel-efficient products like the new-for-2015 F-150 pickup, why is Ford now betting big on speed?

Fast cars are fun, but they also make good business sense
Ford executives say that there are several good reasons to boost the company's go-fast efforts -- and some are even supportive of Ford's long-term movement toward greener vehicles.

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Reason 1: Sales of performance vehicles are on the rise. Ford says sales of performance vehicles in the U.S. have risen 70% since 2009, and they're up 14% in Europe. In addition, in China, where Ford offers Focus STs imported from the U.S., the high-performance compact has been an important brand-builder for the Blue Oval.

Reason 2: Performance vehicles attract new buyers -- and younger buyers -- to the brand. In the U.S., 65% of those who buy the high-performance ST versions of the Fiesta and Focus are newcomers to the Ford brand, the company says. Many of those buyers become Ford loyalists -- Ford says that more than half of the people who buy one of its performance vehicles go on to buy another Ford. The ST models in particular also draw younger buyers -- Ford says that "millennials" (people born between 1980 and 2000, roughly) buy ST models at twice the rate they buy other Ford products.

Ford says that its "hot hatch" models like the Focus ST attract millennial buyers at twice the rate of its mainstream models. Ford is now offering U.S.-made Focus STs in China. Source: Ford Motor Company.

Reason 3: Performance cars and racing provide great training and motivation for Ford's engineers. "Ford considers racing an important proving ground for cultivating passionate engineers -- allowing them to innovate in top-level competition as they face challenges that require successful solutions in very compressed time frames," the company said in a statement. Performance models like the Mustang can also be a powerful tool for hiring and retaining top talent -- many talented auto engineers are also passionate auto enthusiasts, and they will jump at the chance to work on an enthusiast model.

Reason 4: The technology developed for racing or performance vehicles often helps improve mass-market models. Fiat Chryslerengineers have said that lessons learned during the development of the extreme Hellcat V8 engine could help make the company's mass-market engines cleaner and more fuel-efficient. Ford makes a similar argument, noting that many of its high-performance and racing programs use engines from the EcoBoost line -- and lessons learned while optimizing those engines for extreme performance will carry back to the company's mainstream offerings as well.

So, what can we expect to see from this new Ford Performance organization?

Will a new Ford GT top the Ford Performance lineup?
Here's one bit of product news from last week: Ford said that its upcoming Focus RS -- an extreme high-performance version of the Focus compact that has traditionally only been offered in Europe -- will be a "global" model, available for the first time in the U.S. and elsewhere.

Beyond that, the company was vague, saying only that "more than 12 new performance vehicles" would be launched between now and 2020. Current Ford Performance models include the Fiesta ST, the Focus ST, the upcoming Shelby GT350 version of the Mustang, and the Raptor version of the F-150 pickup.

But there may be a big surprise in the works. Multiple sources have suggested that Ford is planning a factory entry in the 2016 24 Hours of Le Mans, arguably the world's most prestigious auto race -- and that entry may be a new version of the Ford GT, the $140,000 extreme sports car offered by Ford in tiny quantities between 2004 and 2006.

Ford sold just over 4,000 examples of its GT sports car during the model's brief production run from 2004 to 2006. But those cars have already become much-sought-after collectors' items, and reports suggest that a revival may be in store. Source: Ford Motor Company.

Those Ford GTs are already collectors' items, commanding prices far above what they cost new.It's very possible that CEO Mark Fields has decided that a revival of the GT -- perhaps with an EcoBoost V6 for racing, and a supercharged or turbocharged V8 for retail versions -- would be a powerful brand-builder for the Blue Oval.

We may not have to wait long to find out
If Ford is in fact reviving the GT, or gearing up to launch a similar car with a different name, it's likely we'll find out next month. Ford has reserved a prominent time slot for a presentation to media during next month's North American International Auto Show in Detroit.

Most auto-show presentations happen right on the show floor, but last year, Ford took over nearby Joe Louis Arena (home of the NHL's Detroit Red Wings) for a dramatic state-of-the-company presentation involving all of its most senior executives. That presentation culminated in the reveal of the all-new 2015 F-150 pickup.

Ford has reserved the hockey arena again, but it hasn't given any official hints as to what's coming. All signs point to a big event focused on Ford Performance.

We'll find out more on the morning of Monday, Jan. 12. I'll be there once again with my Foolish colleague Rex Moore, and we'll have all the details for you. Stay tuned.

The article Why Ford Is Making a Big Move Into High Performance originally appeared on Fool.com.

John Rosevear owns shares of Ford. The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.