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NEW YORK (TheStreet) -- Ford (F) announced Friday that it will acquire San Francisco commuter ridesharing service Chariot as the venerable automaker looks to expand its business. Financial terms of the deal have not been disclosed.
Company CEO Mark Fields put the acquisition into context in an appearance on CNBC's "Power Lunch."
"We're taking a point of view of the world that the world is moving from just an ownership mindset around transportation to a shared mindset," he said. "We have a wonderful business around how people come and buy and own our vehicles. This is an opportunity for us to expand our business to mobility services and also to touch folks who may not ever own a car or ever have any exposure to Ford."
Fields added that the company still views its core business of vehicle sales as a growth business upon factoring in global trends in auto ownership.
"When you look in places around the world, whether it's Asia-Pacific or otherwise, [vehicles sales] is still a business that's going to grow at a fairly good compounded growth rate for the next number of years," he said. "But at the same time, as these [ridesharing] services come on, you could argue that it would decrease, for example, car usage or density in major urban areas."
Ford believes that growth in its ridesharing investments would compensate any decline in vehicle usage in those urban areas, Fields added.
Shares of Ford were trading slightly lower in early afternoon trading.
(Ford is held in the Dividend Stock Advisor portfolio. See all of the portfolio's holdings with a free trial.)
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate FORD MOTOR CO as a Buy with a ratings score of B-. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: FF data by YCharts