Ford Motor Co. prides itself on thinking big. The 117-year-old icon’s long-running strategy centers on preserving its status as a universal nameplate serving all the world’s major geographies and offering a wide array of vehicles from subcompacts to luxury SUVs, in a variety of flavors soon to widely encompass electric.

But it’s a company that’s sliding: After posting $7.4 billion in profit in 2015, Ford’s earnings barely broke even last year, and that was before COVID-19 and its subsequent lockdowns took a sledgehammer to its North American profitability. In the second quarter of this year the company lost nearly $1 billion in the region. Jim Hackett was ousted as CEO shortly after, and a new round of buyouts was announced.

New CEO James Farley, who was promoted from chief of operations, has a monumental challenge on his hands but also has everything he needs to make Ford a success, if he’s willing to make some hard choices around product and strategy.

So what should Ford look like in 2021 and beyond? Fortune spoke to analysts and industry experts and studied Ford’s public filings to assemble a plausible blueprint for its revival.

Farley has a rare opening to seize the moment. The pandemic’s onslaught makes investors a lot more tolerant of tough decisions that cause short-term pain but build on what makes money, shelves losers, and jettisons lofty ambitions. This is a crisis Ford can’t afford to waste.

Junk more unprofitable models in North America

For years, North America has been Ford’s only consistently profitable market. “But margins there have been falling, and are well below where they need to be,” says Stephen Brown, an analyst with Fitch Ratings. The big problem is a cost base that jumped $8.3 billion from 2016 to the end of last year, outpacing sales increases of just $5.5 billion; that combination shrank margins from over 10% to just 6.7%. In mid-2018, Ford announced an $11 billion worldwide restructuring plan aimed at securing bigger, better deals with suppliers, automating production by adding fleets of robots, rightsizing its workforce, and phasing out nearly all traditional passenger cars in North America.

But the company will see greater wins by winnowing the portfolio to three high-margin franchises, two of which are growing fast.

The first, and by far the biggest, is the F-series pickup. Last year, Ford sold an astounding 897,000 F-series trucks, led by the F-150, America’s bestselling vehicle. The much-hyped electric F-series, which could be unveiled as soon as next year, is going to be a make-or-break addition to a line that constitutes 40% of Ford’s total domestic sales.

The second category encompasses “commercial vehicles” or CVs, its Transit-brand vans used by businesses from couriers to carpenters, as well as boxy passenger versions that are the successors to the old Econoline models. Like the F-series, they boast double-digit margins according to Wall Street analysts.

The third category, SUVs, are a tougher call. Last year, Ford sold 831,000 in the category including the Escape and Explorer in the U.S., but its sales and market share are dropping, the latter falling from 12% in 2015 to just under 10% in 2019.

Still, SUVs are a promising business stateside. They’re generally high-priced, lucrative products, and even if they don’t grow much, can remain so. That’s because key models share the “body on frame” architecture and are produced on the same platforms as the trucks that Ford manufactures in gigantic volumes, lowering unit costs. The new Bronco SUV shares the same chassis, and many other parts, with Ford’s second pickup brand, the Ranger, and is being made alongside its cousin in Wayne, Mich. The Expedition, its largest SUV, and the high-end Lincoln Navigator use the same underpinnings as the F-150. By contrast, two of the smaller models, the EcoSport and Escape, employ a different system called “unibody,” and hence don’t offer the same economies. “Ford should phase out the EcoSport and Escape, which are low-margin anyway,” says Jon Gabrielsen, an industry consultant. Put simply, Ford can prosper if it speeds faster on the same route by shedding the marginal SUVs and hitting the brakes on costs.

In Europe, get out of sedans and go all-in with vans

Ford’s biggest problems lie overseas. If the automaker could simply sell its foreign operations to a rival at no gain, its road to success would be far shorter and straighter. Ford should leave South America as quickly as possible. Its operation there, serving mainly Brazil and Argentina, hasn’t earned its cost of capital in decades.

In Europe, where GM wisely withdrew via a sale to Peugeot in 2017, Ford is pledging to downsize its line of low-margin, high-volume passenger vehicles and invest heavily in growing its star performers, commercial and passenger vans. This doesn’t go far enough.

Ford should focus on dominating the van market. The company is the market-share leader in commercial vehicles in Europe at 15.1%. Sales are growing, hitting over 264,000 vehicles last year, and according to industry experts, its Transits are generating double-digit margins.

Achieving large-scale production is crucial to keeping its lead in vans. A new joint venture with Volkswagen should help a lot. VW has pledged to source commercial vans in Europe and a pickup based on the Ranger for all markets engineered and manufactured by Ford.

But in shrinking its passenger vehicle lineup, Ford will no longer benefit from scale in engineering and purchasing, and thus won’t be able to keep costs competitive. It needs to get out of this segment entirely.

The picture for SUVs is cloudier. Last year, Ford sold just under 300,000 SUVs in the U.K. and on the Continent, largely manufactured in the region. Unlike the situation in sedans, Ford is designing and making large volumes of the same SUVs in the U.S., some sharing platforms with its F-150s. So Ford would achieve economies by continuing to manufacture and sell the most popular models in Europe.

Scale back China ambitions and play to your strengths

Just five years ago, Ford was on a roll in China, holding an almost 5% market share and generating $765 million in pretax profits on $10.7 billion in sales. (Earlier figures are for the Asia-Pacific region, heavily dominated by China.) A stunning free fall ensued, erasing all earnings by 2019 and sending revenues plunging 35%, to $7.0 billion. Fortunes improved in the first half of 2020 with the introduction of new versions of the Ford Escape and Lincoln Corsair SUVs. But its market share is still just 2.5%, and it faces obstacles similar to those in Europe: A heavy dependence on low-margin passenger cars, and the challenge of achieving volumes big enough to compete on sedans and SUVs.

Though Ford doesn’t disclose the exact breakdown, Fortune estimates that of the 159,000 vehicles that Ford sold in China in Q2, roughly half were sedans, led by the midsize Focus and compact Escort, and SUVs. As in Europe, China is moving rapidly to EVs. Undaunted, Ford is pledging to introduce 30 new models over the next three years, 10 in all-electric versions. But China has over 400 domestic producers vying for that market. And EVs for now are far less profitable than conventional vehicles, because battery costs remain elevated, while volumes remain too low.

That doesn’t mean that Ford should abandon China. Rather, it should once again play to its strengths. Its light commercial vehicles are big hits in China, just as in Europe. Ford should transform itself into a specialty manufacturer concentrating on vans and small pickups. Its growing output in the U.S. and Europe, including in new EVs, will help provide the scale essential to winning in the world’s largest auto market. It’s also starting with fat margins in those vans and pickups, which should ease the transition to EVs.

As sales shrink, costs need to keep pace

A New Ford that’s resized and profitable might be two-thirds as big as the current model, meaning that sales would shrink from $156 billion last year to around $100 billion. But that template can work only if Ford crunches overhead. Since it would be shifting to a mix of much higher-margin products, the automaker wouldn’t need to lower costs quite as fast as sales to become far more profitable. But the transition would still be brutal. Entire engineering and sales teams behind axed models would have to go en masse.

Ford has a core of great products that are being diluted by trying to do too much in too many places. A daring plan for downsizing would mean the end of the global empire of old, but it could ensure that the blue oval survives on what Ford does best. 

*****

The new Bronco is an example of everything Ford is doing right

Shared platform

The engineering platform, chassis, and several parts for the Bronco are shared with Ford’s new Ranger pickup truck, which has already proved to be a hit seller.

Bankable nostalgia

Ford isn’t afraid to look to the past and trade on nostalgia—take the Ford GT and its entire Mustang line for evidence.But with the Bronco that nostalgia is paired with a practicalvehicle, and one that will appeal to younger drivers.

Genuine performance

The Bronco is going right up against the proven off-roadcredentials of the Jeep Wrangler, and only by beating the Wrangler will it succeed in the market. The released specs show Ford is taking this fight very seriously.

A version of this article appears in the October 2020 issue of Fortune.