Ford Motor Co (NYSE: F) Chief Financial Officer John Lawler said on Wednesday that online orders will play a bigger role in its future sales strategy as the legacy automaker undertakes a massive electrification drive to catch up with leader Tesla Inc (NASDAQ: TSLA).
What Happened: Lawler said Ford does not plan to go back to its old model of stocking high inventory at dealerships and will instead focus on pushing its online presence.
“We are setting up our whole processes around leaner inventory structure," Lawler said at a BoFA Securities event on Wednesday.
"About 30% of our sales in the fourth quarter came through online orders. So that’s going to be a bigger part of what we are doing and that's going to continue to grow and be an important part of how we manage things going forward.”
Ford CEO Jim Farley had last year said the automaker under a new strategy decided to keep its inventories historically lower.
Tesla sells a bulk of its EVs online, a strategy being adopted by rivals such as Volkswagen Group (OTC: VWAGY) in Germany.
See Also: Ford CEO Jim Farley Teases F-150 Lightning EV As Launch Set For April 26
Strengthening Margins: Dearborn, Michigan-based Ford last month said it is splitting its electric vehicle and the internal combustion businesses as it looks to boost profit margins.
The automaker said it is aiming for a 10% adjusted EBIT margin by 2026. Ford last year reported an operating profit of $10 billion, and an operating margin of 7.3%.
“We believe that the $3 billion of savings we are going to deliver over the next 24 months is going to strengthen the margins on the ICE [internal combustion engine] side of the business,” Lawler said.
“And then on electrification, of course, the margins are not where they need to be ... it is a loss [making] business."
The automaker expects EVs to account for 30% of its global sales within five years and a half by 2030.
Price Action: Ford stock closed 0.98% higher at $15.5 a share on Wednesday.
