Ford dropping almost all cars from its NA lineup.

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Originally Posted By: Cujet
Handing over profits to others by limiting the scope of business is to cede or abdicate a competitive advantage.
What is Ford's competitive advantage when it comes to cars?
 
Maybe it's not a big thing but what about brand loyalty and transitioning into an SUV type vehicle? If a person has had a good experience with a Brand ABC car, wouldn't they gravitate towards a brand ABC SUV?
 
Originally Posted By: Aichiguy
Maybe it's not a big thing but what about brand loyalty and transitioning into an SUV type vehicle? If a person has had a good experience with a Brand ABC car, wouldn't they gravitate towards a brand ABC SUV?
Yeah, but that goes for all companies. I dont think this is unique to Ford.
 
I bet other makers will follow suit before long and dump some small cars and sedans. Car sales are tanking among pretty much all makes. This is hardly a Ford-only issue. Year-To-Date sales as of March 2018: Toyota Yaris, down 37% Hyundai Accent, down 50% Hyundai Sonata, down 38% Mazda 6, down 30% VW Golf family, down 33% VW Jetta, down 40% VW Passat, down 46% Chevrolet Impala, down 36% Mercedes C-Class, down 35% smart, down 69% Mini Clubman, down 50% Tons of others in the -20% range. Even cars like the Accord and Prius are down over 10% YTD
 
Originally Posted By: 4WD
My Explorer had some of the best painting I have seen …
Was that water based paint? I assume the explorer is gone.
 
Originally Posted By: Cujet
I'm old enough to have observed a number of large businesses do this very same thing. To concentrate on the very profitable, and discard the rest. It's universally a mistake, regardless of the business, or subject.
James Altucher was talking about on of his businesses and that he reviewed the income per customer, and found that 80% of his customers were 20% of his income. So he adopted the "80:20 rule", and dumped the 80%. (But I think he went on to sell the company's great profit margin.
 
If your comment is regarding my choice of words they were intentional ~ the tri color on the Ford and GM SUV’s look like the same paint … both have good applications (my reference point) … thanks for your concerns …
 
I was a big Ford fan boy, this is just another stupid move for them imo. I don't care for any of their offerings anymore.
 
With cheap gas prices over the past few years, Americans wanted more space and bought bigger vehicles. If gas prices shoot to over $4 will Americans still buy SUVs and decked out F-150 pickups ?
 
Originally Posted By: demarpaint
I was a big Ford fan boy, this is just another stupid move for them imo. I don't care for any of their offerings anymore.
You know, I find this interesting. That was the exact opposite Ford was taking 8-9 years ago. Back in the late, late 2000s, I was a subcontracting consultant for buyer behavior for a "Big Three" company. It was fairly easy to deduce it was Ford (walking out into the parking lot would confirm this easily). Anyway, the company was trying to figure out how to connect with the "newer generations" etc. Basically, they could not figure out why/how the "general" buyer (the 90% of the population) would not engage with the company directly and did no trust their information. They could get this weird 10% to interact, but they drove older vehicles, were more likely to do repairs themselves, tended to buy used cars, and their daily driver was either a Full-Sized Truck, Mustang, Miata or similar. A lot of Civic Si owners at the time too in our data. Anyway this 10% in our data was one of the most "trusted" sources with a high influence factor. It wasn't that they could make the 90% buy a car, but they were very good at getting the 90% to consider the car. So if the 90% was looking at a Corolla or Civic (and for was not on the list), they they were very good at getting the Focus, etc on that list to check out. So the concept was to get the "car guru" talking about your model as they has the most social influence in recommending that a 90% would interact with a brand/dealer. Long story short, our recommendation was that you mix in true enthusiast models across the line up (rather than a single "mustang option" as a means of connecting with those that followed a brand other than #lifestyle. The 90% did not care if it was an S, SE, Ti, or ST but the "guru" would be talking about the sub-model that interested them and they would have the Fiesta or other make name everywhere. Best of all, they were very brand loyal compared to the 90%. Raptor/ST models came out after this and while I don't think that our group really "created" this concept, as there were several analysis groups doing this... the data was fairly strong so I am guessing Ford/other saw this trend developing in the data. I am curious to see how the buyer data has evolved. 10 years is a long time in the data world and I am out of it. Anyway, Ford *tends* to be ahead of the market research side (they shine there) but still, this looks like a decision designed to "shake things up" for hedge funds rather than a long-term strategy.
 
Check out sedan sales data - plenty at goodcarbadcar.com You'll notice that for the last 3-5 years sales have been declining from all makes. Why would you invest possibly billions in new platforms for something that is dying? It makes much more business sense to invest where people want to go which is CUV/SUV/Trucks. With CUVs basically being cars and getting decent fuel economy there are few trade-offs. Nearly everyone is making or thinking about a CUV now a days. Even Lamborghini has one! Should tastes go back to cars, it would be pretty easy to design a car body to the CUV.
 
Originally Posted By: itguy08
Check out sedan sales data - plenty at goodcarbadcar.com You'll notice that for the last 3-5 years sales have been declining from all makes. Why would you invest possibly billions in new platforms for something that is dying? It makes much more business sense to invest where people want to go which is CUV/SUV/Trucks. With CUVs basically being cars and getting decent fuel economy there are few trade-offs. Nearly everyone is making or thinking about a CUV now a days. Even Lamborghini has one! Should tastes go back to cars, it would be pretty easy to design a car body to the CUV.
Simple answer: Hedging bets in a volatile fuel market when the industry is not quick to respond. So for the "base" models: Ecosport: 27/29 vs Fiesta: 27/35 or Focus 24/35 vs Escape 21/29... not including hybrids. That is basically a 20% difference for highway use. It is not as bad as the old 90s Explorers (were 15-18 was king), but then take the CMax and Fusion Hybrids at 38-43mpg. Passenger vehicles are declining but are still 1/3 of the market in an era of cheap gas. There are those like my brother who are commuting 90+ miles a day and you can never get him into a SUV because the difference between 29 and 35mpg is big for him. So take why Toyota was investing in hybrid technology when gas was $1/gallon while also expanding its truck offerings. Going after one market segment without much diversity is a high-risk as vehicle development is a many-year process and gas prices can change daily. Next week we could have $4 per gallon. We saw how well GM/DC did in the last instance of that. IN fact, this thinking has caused Detroit a lot of grief with every fuel-related issue. It isn't that Ford will emphasize car platform but they are basically cutting cold-turkey. Dropping from 6 options to 1.5 options which one is a (optioned) V8 coupe is what is bonkers. If they said were to expand the "Mustang" with a Sedan version, to cover sedan/law enforcement needs, I could at least see some planning to have something on standby. Now here is the other thing. CUVs are more expensive than their car counter parts. We are starting to see the end of "cheap credit" and defaults on autoloans are on the rise. Making your brand more expensive across the board will be problematic in an economic slump/end of cheap financing. Part of the reason the CUVs are attractive is that they are cash-cows for the makers but if Ford does not have a "cheap" Corolla fighter, then they will have to use their CUVs to beat other vehicle on pricepoint plus any fuel price penalty. See the perfect storm here? Take an issue where fuel prices spike (again). Folks can't afford their commutes in their new "Explorer" Edge, Escape and are at/beyond their debt limit. They default on their loans. Autoloan rates (continue to) increasing?becoming harder making those Explorers less affordable/attainable. There is a shift again to 35mpg+ vehicles... to get folks to even move their CUVs, Ford has to discount them... ruining their profitability when they can move them and also completely surrender the market to those that are still making small cars. Right now, even loosing money on a Focus, etc, that protects them for having to use their cash-cow CUVs to fight off cheaper sedans or other options. If they have to use the EcoSport or Escape to fight Corolla, Civic, etc then there might not be a good idea. So having that "focus active" might be the idea but I think it is too much and leaves Ford more vulnerable.
 
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Originally Posted By: FutureDoc
So for the "base" models: Ecosport: 27/29 vs Fiesta: 27/35 or Focus 24/35 vs Escape 21/29... not including hybrids. That is basically a 20% difference for highway use. It is not as bad as the old 90s Explorers (were 15-18 was king), but then take the CMax and Fusion Hybrids at 38-43mpg. Passenger vehicles are declining but are still 1/3 of the market in an era of cheap gas. There are those like my brother who are commuting 90+ miles a day and you can never get him into a SUV because the difference between 29 and 35mpg is big for him.
That's assuming people would cross shop the models. It's very likely that the Ecosport customer would cross shop a Focus or even a Fusion as they offer similar "room" to that Ecosport. The difference in MPG #'s isn't that bad at all. I'll use the 100 mile daily commute, 500 a week. 29 MPG - 17.24 Gal 35 MPG - 14.28 Gal At $4, that's: 29 MPG: $68.96 per week 35 MPG: $57.12 per week $11.84 a week more expensive, or $615 a year. IMHO that's not enough to even think of taking on another car payment or switching vehicles.
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Now here is the other thing. CUVs are more expensive than their car counter parts. We are starting to see the end of "cheap credit" and defaults on autoloans are on the rise. Making your brand more expensive across the board will be problematic in an economic slump/end of cheap financing. Part of the reason the CUVs are attractive is that they are cash-cows for the makers but if Ford does not have a "cheap" Corolla fighter, then they will have to use their CUVs to beat other vehicle on pricepoint plus any fuel price penalty. See the perfect storm here?
Could it be CUV's are more expensive because that's what the market will bear now and there is room to discount them should the financial markets change? Looking at them all, they don't seem much different than the cars they are based on. I also don't think the small cars bring anyone any great profits. When was the last time the Elantra, Corolla, Fit, etc were redesigned? About the only one that is redesigned is the Civic and that's because Honda keeps screwing it up. Default rates will affect everyone - once you default your credit is trashed and that makes it hard to get into a new car, regardless of maker. That's an industry-wide problem just not Ford. Ford also has a class leading (as good as Toyota) hybrid system that they can/will put in the vehicles to increase the MPG as well. That and increased efficiencies can only drive the MPG gap narrower and narrower. I don't think it's as dire as many are predicting.
 
I am using platforms for the PV vs LDT comparison. As for savings, fuel is a moderate concern.... but $50 a month does and can break a lot of budgets and for some reason, folks are hyper-sensitive at the pump. So that Ecosport vs Fiesta.. Ecosport has a 13.6g tank, assume a 90% fill at $4/g, that is $48.96 per tank with a rang of 355mi Fiesta with a 12.4g and a 90% fill at $4 is only $44.64. with the range of 390 miles. Not bad except the pump but folks do, at some level, fee that they get gas more and it cost more to fill out. So it is both a economics and feeling. Keep in mind that folks will drive dozens a minutes to save a nickel per gallon on fuel. Now here is the other thing... I think LDT are over-predicting their economy more than cars. Fuelly list the Escape as about 21-23MPG and the Focus is 27-30. They do both lower and higher but I took a median approach.
 
Originally Posted By: Olas
The only good fords were the RS200 and RS500. All the rest are soulless white goods to get you from A-B
Color of your choice…
 
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