OT: Ford to stop producing (nearly all) sedans and hatchbacks
Figured this would be of interest, given that many of us have connections to the Detroit auto industry (and Hackett). Sad for me as I love the Focus RS and ST. LINK.
Dearborn — Ford Motor Co. plans to trim $25.5 billion in operating costs by 2022 and cut its North American passenger car lineup by more than 80 percent, eliminating the Taurus, Fiesta, Fusion, C-Max and Focus sedans within a few years.
CEO Jim Hackett said Wednesday that Ford will not make the next generation of those sedans, confirming months of reports that the automaker was considering cutting some of its unprofitable car models in favor of trucks and SUVs. The Mustang will be soon be Ford’s only car; the new Focus will launch next year in North America as the Chinese-built Focus Active crossover.
That’s a deeper cut to the car lineup than industry analysts expected. That move, coupled with the reduction in operating costs and a plan to reduce capital spending from 2019 to 2022 by $5 billion announced Wednesday, come from the “fitness” initiative Hackett outlined in October.
None of the Detroit automakers make money on sedans, and every year more people buy crossovers instead of sedans. The auto market is cyclical, and as this next downturn begins, Ford needs to make sure they're competitive for years to come. I like this and also what they're doing with Lincoln.
Hard for me to fathom getting rid of the Fusion. I have one, really like it, and I see them on the road all the time. They must not be making a ton of money on them.
This is worrisome as it could foretell quite a few plant closures unless those plants are retooled with demand for SUVs/Trucks/Crossovers...or a new generation of vehicles.
Personally, I think this is a mistake. If you look at the station wagon fad of the 50s-70s American culture is fickle. They would be better off at revisioning the sedan verses getting out of the business entirely.
A 4 door midsize or full size sedan could be made that is light on frills...bench seats, crank windows, etc that would be high quality, easy to maintain and I bet would sell like hotcakes if the pricepoint were below $20k.
4-wheel drive vehicles yield a typical profit margin at, or above, 50 percent for many models. Small & midsize cars range from single digits to high teens. I see where he's coming from but this could cause a lot of pain if consumers shift interest back to cars.
An interesting metric is the length of time that people are financing...84 month loans are, amazingly, becoming more common. American median income is not keeping up with car prices and, at some point, either the number of buyers will slow down or the number of repos will go up (car pricing bubble).
A 4 door midsize or full size sedan could be made that is light on frills...bench seats, crank windows, etc that would be high quality, easy to maintain and I bet would sell like hotcakes if the pricepoint were below $20k.
I'd love this. I'm a big car kind of guy (currently driving 2000 Ford Crown Vic) and cannot replace it with anything comparable unless I spend north of $30k. Even crossovers feel too small in comparison. My bench seats provide way more comfort than my girlfriend's 2018 Escape.
FCA has some serious quality issues
April 26th, 2018 at 10:20 PM ^
they are dropping cars. You don't drive very much, keep your car for long periods of time, and will likely switch to an autonomous vehicle/carpool in the future (as that will be the most economical and Eco-Friendly option).
As long as they keep paying their dividends at their current rate and earning profits (unlike Tesla), I'll be happy.
Based on dealer experience, reliability, warranty, price and not being part of a Ford family plan- the Hyundai Sonata car and lease blew Ford away.
If the economy gets worse in the next decade (gas prices go way up or people have less kids) then banking on SUVs and Trucks is a risky move.Short term I think it's a very good move.
the expectation is that instead of buying a vehicle, you will use an autonomous vehicle/carpool if you live in a city. If you need a vehicle, the larger vehicles will have decent mileage and there will be hybrid/electric options. If a small vehicle is needed, they are already made overseas and will just be shipped here. No big deal and not as much risk as you are suggesting.
is buying cars.
I like the Fusion, but I haven't cross shopped so I can't say.
I don't think this is as much of a risk as it once was though. The Crossovers are decent in mileage and getting better all the time.
They still have no trunk (get off my lawn kid!) but they aren't old body on frame SUV's.
The sedans will continue to be built until end of life their natural life in 2020+, and the next generation ones (2021+) will be designed and built in China, and imported to the EU and North America.
Ford IS NOT going to stop building sedans, globally. They just want Wall Street to think they are because Ford stock have been dogshit the last three years and Hackett is desperate to cut costs/raise the share price. Ford does not want people to know/talk about the fact they're going to be building sedans in China and importing them to North America.
GM already does this with the Cadillac CT6/Buick Envision.
FCA does not do this.
Disclosure - I am huge fan of FCA - everyone laughed at Sergio for going all in on crossovers/trucks in the summer of 2015. Who is laughing now? Who is kicking GM and Ford ass in share price increase the last two years? FCA is going to be the largest Detroit automaker (by market cap) by the end of 2019.
Oh, and all of FCA's new vehicles will include hybrids to hedge against increases in gas prices. Crossovers/SUVs are here to stay.
April 27th, 2018 at 12:45 PM ^
AAAAGGGGGGHHHHH!!!! So Hard... to not..... politics!!!!! I must.... Resist!!!!!
Man.. That was close...
Go Blue!
I've driven Jeep SUV's since '96. I've taken them all over.
But I'm tired of the 2 box design.
Taking family anywhere in these things is a PITA if you have luggage. My Five Hundred has a 20cu ft trunk. I can put a ton of stuff in there and take a nice long trip with the passenger compartment completely open for just passengers.
with the Japanese and Korean makers?