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Ford slashes United States vehicle lineup, kills Focus, Fusion, Fiesta

26 April, 2018, 09:39 | Author: Samuel Sharp
  • Ford seeks to accelerate profit margins, drop less popular models

Ford Motor Co. on Wednesday said it plans to stop selling all Ford brand sedans in North America and that it is almost doubling its cost-cutting target by 2022 from the plan it laid out only six months ago.

Cutting its slow-selling sedans and hatchbacks will serve to free up even more capital for light truck and mobility development.

Amid declining consumer demand and product profitability, the company said it will not invest in next generations of traditional Ford sedans.

Ford (F) said on Wednesday the only passenger vehicle models it plans to keep on the market in North America will be the Mustang and the upcoming Ford Focus Active. Along with the Continental sedan, the brand offers the mid-size MKX.

While Ford didn't mention them, analysts say the Lincoln Continental and MKZ sedans, which share platforms with numerous Ford cars slated to be scrapped, also remain in doubt. Hyundai's midsize sedan sales fell 26.3 percent in the US since March of previous year.

"We saw an increase in commodities of about half a billion dollars in the quarter", he said on Wednesday.

Crosstown rival Fiat Chrysler already has thinned its sedan lineup to the Chrysler 300, Dodge Charger, and Alfa Romeo Giulia, much to the delight of Wall Street and the automaker's investors.

In its statement, Ford said it will rely exclusively on a two-car lineup, the new Focus Active-a raised, body-cladded version of its all-new Focus hatchback (a crossover, in other words)-and the Mustang.

Ford is pretty serious about trimming its United States lineup in the coming years, and that's bad news for anything that isn't a truck or SUV.

He also said the company was reducing its planned capital spending from 2019 through 2022 by $5 billion to $29 billion through such actions as using common "modules" to account for 70 percent of the value of each vehicle and reusing tools and equipment.

Speaking to reporters on Wednesday as the company reported first-quarter results, Chief Financial Officer Bob Shanks said "we have looked at every single part of the business". "We are driven to turn this business around".

The company also plans to reduce costs by $11.5 billion by 2020. As usual, North America drove Ford's profits for the quarter with pretax earnings of $1.9 billion.

The company's loss in its Asia Pacific region was driven by slumping sales in China, where Ford has just begun to introduce new models.

It remains unclear if this is a genius move or a blunder of monumental proportions, but the answer will likely come down to gas prices and customer acceptance of electric and electrified vehicles.



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