Here's why Ford is shifting away from traditional cars

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Hackett said the plans should make Ford fit for the future (Source: Getty)

Ford has set out its plans to move away from traditional cars as it looks to position itself for the future under its new chief executive.

Jim Hackett, who was appointed head of Ford in May after previously leading the car firm's autonomous driving division, outlined his plans to improve Ford's "operational fitness, refocus capital allocation and accelerate the introduction of smart vehicles and services" in an update to investors. 

Read more: Ford teams up with Lyft to accelerate driverless car ambitions

Amid the changes the car giant is making are reallocating $7bn of capital from cars to SUVs and trucks, and reducing spending on combustion engines and redeploying that into electrification. Ford plans to boost its strength in electric vehicles, after recently announcing a dedicated electrification team within the company. 

“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally,” Hackett said.

Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.

Ford had faced concern from shareholders that it wasn't doing enough to build on its core auto business and had dropped back behind competitors when it came to driverless and electric vehicles. 

When Hackett was appointed, he carried out a 100-day review to assess the firm's strategy.

Ford also plans to automate its manufacturing processes more in an effort to cut costs by $14bn, and will be open to more partnerships, having just announced its tie-up with Lyft to further its driverless ambitions. It is working with Chinese firm Zotye, announcing last month that it was launching an electric car joint venture in China.

Ford has reaffirmed its full-year guidance for 2017, adding that its 2018 outlook will be provided in January. The company reiterated its long-term goal of an eight per cent automotive operating margin, saying it will embrace the "profound technological changes" and new competition "buffeting the industry".

Read more: Future of jobs at Ford UK plant thrown into doubt as JLR ends contract