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Hooniverse Asks: What do you think about Ford’s car-cutting plan?

Jeff Glucker April 26, 2018 Hooniverse Asks 42 Comments

By 2022, Ford will have a lineup mostly devoid of cars. Instead, the automaker is going to focus on its trucks and utility vehicles. The only cars to survive will be the Mustang and a lifestyle-d up version of the Focus. Everything else will be either a pickup truck or sport utility vehicle.

The reason behind this move is to cut costs. That’s what Blue Oval brand CEO Jim Hackett has said, and the amount of costs to be cut is in the neighborhood of $25 billion.

Ford is certainly following the consumer dollar here. There’s no denying that. People want crossover-type vehicles. There’s no one buying the Fusion, Taurus, or Fiesta so Ford is going to give them the axe.

Is this the right move or is Ford foolishly following trends too aggressively? The F-150 will always be the anchor for the brand, but is the demise of a number of car models a harbinger of more to come?

Ford once killed the Ranger for North America, and that’s coming back. There’s always a chance of vehicular revival for sedans too.

  • Jofes2

    Is this true for euro Ford as well? Would be strange because I thought the Fiesta and Mondeo were top sellers judging by what’s seen in the streets.

    • Grant Linderman

      I wondered the same thing, so I googled around a bit. Looks like the Fiesta was the #4 top selling car model in Europe in 2017. However… Fiesta sales in ’17 were a full 15% lower than ’16 (almost 46k less units sold). The Ford Focus slotted in at #11, and its sales were almost exactly the same in ’17 as they were in ’16. No other Ford models were in the top 25. The first crossover/SUV on the list was the VW Tiguan at #7. It saw sales rise 31% from ’16 to ’17. source: https://goo.gl/gih2Dv

      In the US… 14 of the top 25 best selling models were trucks/SUVs/crossovers/vans, which is pretty wild. The other somewhat-shocking thing I noticed is that there was not a single model in the top 25 for both the US and Europe in 2017. source: https://goo.gl/M53EaB

      Would be interesting to see what the figures were if it were possible to strip out fleet sales. A lot of particular model sales are HEAVILY driven by fleet sales. They’re what keep the Ford F-series at the top of the list year-after-year. More than double F-series sold in ’17 than the most-sold non-pickup (almost 900k F-series vs. 407k RAV4’s).

    • Greg Kachadurian

      This decision only applies to the American market.

      • outback_ute

        I would expect the Mondeo to be axed, as sales have declined and were a fraction of Fusion sales; it won’t stack up on its own. A new Focus was just released, new Fiesta last year I think.

        How much of this is because of people being turned off by the powershift transmission issues?

        Because of platform sharing this won’t help Ford as much as it might seem on the surface, development costs ($billions) will be spread across significantly fewer units.

        Another issue is that in total, 300k-odd sales from the conventional cars is a lot to strip out of the dealer network, and not because of sales revenue but more importantly servicing.

        It reminds me of how Ford gradually cut the Falcon model in Australia; 5% sales here, 15% there etc and all of a sudden the factory is not viable. (of course there were many other factors).

        • crank_case

          Funny thing is the Mondeo seems a little too geared to the US market being a bit on the big side, and now they’ve stopped selling it there. When you think about it though, every car in Fords Europes lineup now does the job of a car a class above from it’s 80s/90s lineup. A Focus accommodates the same needs as a Sierra did, A fiesta does the job of an escort/focus mk1, the KA slots in underneath to take over as entry level in the way early fiestas did, so it’s natural that the top of the tree now finds itself in the same place as the Scorpio did years ago – facing extinction. The range is still essentially the same, it’s just the nameplates have shifted up.

          • outback_ute

            Perhaps but it really hadn’t changed from the third generation when arguably it ‘went Scorpio’.

            • crank_case

              It’s a gradual thing, it’s been getting longer while appetite for such cars was declining. “Mondeo Man” was already a derisive term at the turn of the century and cheap credit means people buying saloons went for German “premium” ones even if it came with microdiesel misery generator.

        • Scoutdude

          Yeah the Mondeo doesn’t survive w/o the Fusion.

  • GTXcellent

    First glance it seems really short-sighted. If petrol jumps up above $4 again for a sustained period and suddenly the only vehicles selling are small hybrids, it puts them in a somewhat precarious position. But, when they are openly stating they lose money making cars, why keep at it?

    Maybe this opens the door for Lincoln to have some more vehicles that are their very own and not just tarted up Explorers?

    • Sjalabais

      But aren’t a lot of these CUVs etc only lifted cars anyway? I totally agree in that this seems shortsighted, as cutting huge pieces of your product range is limiting the company a lot. But they could always recertify vehicles designed in Germany later on.

      • Yes, but they still have to punch a much bigger hole in the air around them and that’s where a lot of gas goes.

        • Sjalabais

          True that. Yet I see the current [insert character]UV craze as people wanting cars to have the same ride height as in the 90s. Plus buckets of intangible and slightly phony Zeitgeist. With current engine technology, this is still a step forward, if ever so small.

    • Rover 1

      If they don’t have Ford sedans, what will they base their upmarket brand’s cars on? Since VW tried sharing platforms, they’ve managed the trick of becoming the world’s largest and most profitable car manufacturer.

      They seem to have forgotten that economy of scale can reduce costs and improve profits. That was first shown a hundred or so years ago by some fellow, Henry … something… who pretty much perfected mass production for automobiles

      I wonder if the Ford Motor Company has heard of him?

  • Greg Kachadurian

    I’m just glad I ordered my Mustang before it became a crossover.

    • Andrew Pierce

      Ford Crosstang King Ranch Edition

    • kogashiwa

      You could have parked it beside your Eclipse Cross!

  • Shingo

    If/when Toyota does this, Armageddon will truly be upon us. I predict that they won’t as they’re always in it for the long game.

  • Fred

    As Ford and maybe GM cut back on sedans others will step up to fill the slot. Add in Toyota’s new flexible assy line and we can continue to document the fall of the big 3.

    • Harry Callahan

      Big 2. FCA is a foreign manufacturer with operations in USA.

  • neight428

    “Fun to drive” is nice and all, but apart from the hotrod Foci, there are damned few people that enjoyed driving their Fusions and Tauruses in a way that could not be not 95% duplicated in an Edge or Explorer. A lower CG and maybe lower curb weight is about all they ever had going for them in comparison. They were artificially cheap, made to move units to keep CAFE numbers out of the toilet. The F150 diesel option likely solves that problem by itself.

  • Victor

    They are shaping the brand towards the future , looks good to me and I have a few shares left.

  • Harry Callahan

    Two points:

    1) Ford is now increasingly exposed to risk associated with oil price volatility. $5.00/gallon gasoline in USA will result in a great resurgence of interest in more fuel efficient cars, and Ford will be left with little to sell. Though SUVs and CUVs are more efficient than they once were, they will ALWAYS consume more fuel than a well designed car.

    2) Ford is essentially ceding this market to foreign producers. This is NOT good news for American industry.

  • Maymar

    I think moreso than the instability of gas prices, I think Ford is opening them up to the possibility that crossovers are (hopefully) on the precipice of being horribly unfashionable. I mean, I don’t know how much longer that trend can carry on, but there will be a point they’ll be lot poison.
    Needless to say, they’ve probably lost me as a potential customer.

  • StephaneDumas

    Nissan did a similar move Down Under in Oz. The only cars they sell in Australia are the 350Z and GT-R.

  • Zentropy

    I’m all for market forces dictating things, though I would get as excited about buying a new crossover as I would a new refrigerator. It is what it is. The people have spoken, and they want boring cars.

  • kogashiwa

    “Crossovers” are just what cars are now, anyway. Sedans are a poor use of space and wagons are terminally uncool so CUVs are what’s left.

    Anyway the only vehicle anyone drives here is the F-150 so I won’t notice a difference. (Exaggerating but not by much.)

  • Zentropy

    WAGONS. Every vehicle should be available in wagon form. It’s the ultimate evolution of the automobile. Common people just don’t realize it yet.

  • Alff

    Their products just got less relevant to my interests. Too bad, they’re my favorite domestic. I’m not in their target market anyway.
    I expect they’ll lean on hybrids and electric trucklets when gas prices spike again.

    • The trucklet shape is better suited to carrying battery packs than a sedan. I mean, a wagon would work too, but now we’re being silly.

  • It’s probably the right move for now. I’d wager that the EcoSport will capture all (using the term loosely) of the Fiesta sales. I think the Focus Active will do well too. Personally I’d like to see the Fusion continue, as a sedan, wagon, and slightly lifted wagon. Re-launching the Ranger and Bronco leaves room for the Edge to get a little lower and more wagon-like though, so there’s that. Plus, I see the existing Fusion soldiering on a little longer than we might be thinking.

    Plus, they’ve said that they’re going farther into electrification. A sedan shape is not well suited to this. Ever try to put something into the trunk of a Fusion Hybrid or Energi? Not fun. I think Prius has pushed the envelope for how much the public wants an ungainly, yet functional shape. CUV it up a little and it’ll sell better. At least to Ford buyers. Especially the multitudes who stayed away from the C-Max.

    Beyond that I think a lot will depend on our appetite for revisiting tariffs and NAFTA. That’s as far as I care to get into politics.

    We still get the Mustang though!

  • wunno sev

    this is probably the right move for Ford. they make stupid amounts of profit on trucks and probably none on anything else besides the Mustang.
    https://blogs.wsj.com/corporate-intelligence/2013/01/29/fords-margins-its-all-about-the-trucks/
    “Auto analysts have pegged the variable margin on each Ford F-series truck at between $8,000 and $10,000. Compare that to $2,500 in pretax profit in North America per vehicle sold and it is easy to see that the trucks contribute an outsized share of Ford’s overall profitability.”

    why even bother selling anything else? i’m sure the numbers aren’t as favorable for crossovers, but you can still charge more money for an EcoSport than for a Fiesta.

    on the other hand, as someone who likes driving, it does make me sad. i bought a brand-new Fiesta in part because i wanted to put my money where my mouth was and buy the small sporty cars that we all pretend we want but none of us will actually buy. and Ford’s been my favorite carmaker of the last ten years, cranking out innovations in powertrain tech, chassis tech, etc. the best-handling, best-driving of the basic FWD cars are Fords – drive a Focus and then drive an Elantra, Corolla, or Cruze; there’s no comparison. so it bums me out that we’re losing Ford where they most stand out from the crowd.

    but oh well. that’s the nature of the business. in 15 years everything will be a small-to-midsize crossover with a torquey four-cylinder turbo motor and an eight-speed automatic.i guess i’ll just lie down to die right now.

    • Ted Odell

      Very well put. I am saddened by this news. I hacve not bought a Ford sedan (not in the market for a few years), but I think they have the best offerings of domestic manufacturers.
      They will be exposed to market risk when the CUV craze comes to an end as all these things tend to do. $5.00 gas has a way of rapidly changing market dynamics.

    • outback_ute

      I assume the word “average” should have been in the quote about the profit number (the journalist’s fault), because there would be plenty of heavily discounted work trucks sold below $25k that I can’t believe have $8k profit in them!

      It’s like my ex-science teacher uncle who would say when the weather report came on the news “it’s relative humidity; if we had 80% humidity we would be swimming!”

  • 0A5599

    Are they just doing this to the Ford-branded cars, or are their Mercury counterparts getting the axe, too?

  • Andrew Pierce

    There was only one reason Ford was even making cars anymore, but the DEA keeps seizing the drug shipments, so why even bother anymore.

    • ptschett

      LOL. I remember that, a number of the cars involved had their rail destination at the Dilworth yard just east of Fargo/Moorhead so it was local news here.

  • P161911

    Unfortunately, make sense. Guess they are hedging their bets with the Focus. It is estimated that 90% of FCA’s profits come from Jeep and Ram sales. One estimate that I saw listed Jeep alone as 70% of FCA profits. Those numbers include all the Chryslers, Dodges, Fiats, Alfas, Maseratis, Ferraris etc. Of course Jeep Wrangler is the rare exception where less content is expected and sold at a premium.

  • MattC

    It saddens me. However after the realization of this happening , the truth does rear its ugly head. The Fusion (while in my estimation) along with the Mazda 6 is still one of the best looking midsize sedan on the market. But, Fusion sales are lagging and hasn’t had a substantial update since 2014. Focus and Fiesta are not selling well (the sting of the automatics failing in the former must be still a contributing factor). So Ford is essentially just listing in the waters while the competition has moved forward (re; Camry/Accord/2019 New Altima on the midsize and new Corolla/Corolla Hatch / Civic on the smaller side). There is still a market but the market share is diminishing. Sales of CUV’s in ever increasing slices of the market are continuing to outpace traditional sedans/coupes. The profit margins are bigger and the people want them. Unlike the 1990’s, these aren’t truck based with the weight and fuel penalties attached.

    I’m getting older and the ability to not have to slink down into a traditional sedan is becoming an oddly appealing proposition. I’d rather have a Mazda CX3/ or CX5 than the respective sedans (Mazda 2 / 3) because to the slightly higher seating position. I reckon that many others have comfort as a factor in the purchase. I also realize that the you give up some dynamics for a more comfortable ride. It is an exercise in compromise.

  • The car market is shrinking, at least for now. There’s not room for all the players. For the most part losing Ford cars is no big deal. We’ve still got Mazda and Honda the generic sedans worth driving. When the Accord, 6 or 3 disappear, start worrying.

  • CSXT8250

    First off, this is one man’s opinion, but I see it the way I see it. So… The “Taurus” name in and of itself should have been axed off 20 years ago just like the “Tempo”. It’s been hanging around over 30 years now, symbolizing a very mediocre (at best) pedestrian car. I have no idea what a Taurus is like today. It could be a very nice vehicle that could hold its own to Audi or Volvo and Mercedes.. I don’t even care to look at one. FoMoCo hung that albatross on the trunk. It reads “Taurus”.. There’s no real positive legacy behind the car, so start clean slated, Ford. The “Fusion”, same deal. Ford….CHOP THE FOCUS, NOT THE FIESTA!! Fiesta is actually a decent looking little car.. I see them everywhere!! Focus name has worn out its welcome.. Been around 20 years now. Another Focus will NOT pull more people to the showrooms!!!!! Ford…. you’re doing it again! It seems to me that, Ford is kind of in a malaise of sorts. Or, the U.S. automotive industry as a whole is entering another malaise era similar to that of the ’70s and arguably the 90’s. Except this time around the cars are NOT particularly UGLY. It’s that they all look the same to me right now. Styles of 90s era cars just didn’t age well. Once again, the auto industry has lost which direction they are going. This is….. Not good. I’m very much a true car guy. Non-denominational to brand loyalty. Anyone who knows me knows that is my heart and soul. Ford is going to find themselves in the same predicament GM got themselves into ultimately, 10 years ago. Anyone discussing this topic deep down knows it too.

  • Citric

    Well they’re boned when we get the inevitable gas price spike.