Ford shifts gears, will stop making almost all its passenger auto

2018 Ford Mustang facelift
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27 April, 2018

Ford's decision to discontinue nearly all of its auto models in North America within two years will leave its Canadian operations intact, since they are focused mainly on sport utility vehicles and light trucks. Ford's automotive revenue increased to $39 billion, exceeding the average projection for $37.2 billion in a Bloomberg survey.

Ford had already announced that the new Fiesta ST would not be crossing the pond due to a lack of interest in the segment, but the main justification is, understandably, profit.

It's all a bit ironic, given that just last decade - as it was emerging from the Great Recession - Ford got $5.9 billion in loans backed by the feds to help it build high-mileage cars.

Ford recently announced that it will cut $11.5 billion in costs. In 2017 the company's pretax profit fell to $8.4 billion from $10.3 billion.

The latest planned reductions will come from areas including engineering, materials costs, marketing and sales. If Ford is phasing out development of sedan platforms, Lincoln will likely suffer, too.

"Where we can raise the returns of underperforming parts of our business by making them more fit, we will", said Mr Hackett.

And, they were quick to remind me, not everyone wants a beefy pickup or SUV with interior room comparable to a NY studio apartment.

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Ford said by 2020 it expects 90 percent of its offering will be trucks and SUVs.

Shanks said that rising costs for commodities, such as aluminum, steel and copper, were a almost $500-million drag on Ford's performance for the quarter.

"We have seen the trend go where Ford and even preowned sales are gearing towards the truck and SUV more so than the sedan".

"Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America", said the automaker.

Dave Sullivan, manager of product analysis for AutoPacific, Inc., called the move bold but also not surprising. The move not only reflects a change in consumer taste, it could make the automaker more profitable, since margins are higher on SUVs than sedans. "Obviously, this has done well for brands such as Subaru". The automaker will eliminate all but two cars from its North American lineup by that year. Now, with fewer cars on the market, it appears they will sink more.

Shanks said Ford is “unleashing the creativity of the teams to challenge norms, challenge conventions.” Cuts and efficiencies are not done yet, he said.


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