Ford cutting production of cars to just Mustang, Focus by 2020

29 April, 2018, 01:47 | Author: Greg Lawrence
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The shocking part of Ford's announcement is "how quickly and how many vehicles" it chose to scrap in one move, said Jessica Caldwell, executive director of industry analysis for Edmunds.

Ford announced in their recent quarterly call that their future auto lineup will consist of only the best-selling Mustang, and a new Focus Active (which will be a small crossover).

The Ford assembly plant on Chicago's Southeast Side is not expecting any layoffs as the company phases out most cars - including the signature Taurus sedan built there - in favor of SUVs and trucks. In addition to putting hybrid-electric power trains into high-volume sellers in its SUV and truck line, the company will roll out a "performance utility" vehicle powered by an electric battery in 2020. Ford expects to move from second to first place on the market of hybrid cars, the USA sales, ahead of current leader Toyota by 2021, thanks to the upcoming hybrid Mustang and F-150. "It's been easy to identify what's wrong and what we need to do about it". "They're king of the truck market, and their SUVs do well, but they're losing money on their cars".

According to Eisenstein, the demand for crossover vehicles is growing rapidly. "The entire team is focused on improving the operational fitness of ourbusiness, as well as meeting and exceeding our accelerated 2020 target of 8 percent margin and ROIC in the high teens". Electrification would mean that those vehicles will be converted to mild hybrids, plug-in hybrids, or battery-electric powertrains. "It's a little bit of everything, and I don't think they're done yet".

The formal shift away from cars comes after Ford sold 128,794 cars so far in 2018 - a drop of almost 14 percent from the same period in 2017. "At the same time, the average age of our vehicles will drop to just more than three years".

Ford Fusion sales, for example, declined 21 percent while Nissan Altima sales declined 17 percent.

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Toyota and Honda, which still amass big sales numbers with the Camry, Accord, Civic, and Corolla, probably would be slower to remove sedans from their lineups, Abuelsamid said. While future fuel-economy regulation policies are very unclear, Ford's big bet on trucks and crossovers comes with a similarly big bet on electrification and widespread cost-cutting measures to make those cars affordable and popular. Ford is known for SUVs and trucks. "Ford also made station wagons and woodies, and those were sort of the forerunners of SUVs". He added that the company will restructure and start focusing on profitable businesses only.

For some analysts, Ford's latest move was hailed as decisive and necessary.

"The passenger vehicle rationalization plan is just the sort of bold and decisive action we believe investors have been waiting for", Ryan Brinkman, an auto analyst at JPMorgan Chase & Co. wrote in a report Thursday.

In an earnings call on Wednesday, the giant automaker said it plans to discontinue the Ford Fusion, Taurus, and Fiesta in North America.

Ford Chief Financial Officer Bob Shanks told reporters it is too early to say whether the additional cuts and "efficiency opportunities" would result in layoffs or staffing reductions.

"Keeping mustang of course because it's an iconic brand of Ford", said Rob Keller, President at Keller Ford.



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