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Ford announces deep cuts to vehicle lineup

29 April, 2018, 01:47 | Author: Drew Briggs
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"Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America", the statement read, adding that its North American business will "transition" to just two marques - the Mustang and the Focus Active crossover, which launches next year.

Edmunds.com analyst, Jessica Caldwell says that while Ford may be making a good choice by focusing on its best sellers like the trucks and SUVs, but it is also taking a huge risk by alienating its sedan customer base and giving away market share in that segment. 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. The fact that people are buying more SUVs to the detriment of cars is not exactly news, so we won't be too surprised if other automakers will go down the same road in the years to come. Here, the company's trucks were highlighted at the 2018 North American International Auto Show in Detroit.

On a conference call with reporters to discuss first-quarter earnings, GM Chairman and CEO Mary Barra laid out why the automaker feels comfortable sticking with its stable of sedans and hatchbacks-for now-even as the market continues to shrink.

Following the announcement, company's stock rose 2.6 %at $11.40 in after-hours trading.

Ford announced that it will stop selling passenger cars, with the exception of the Mustang and the Ford Focus Active in the United States.

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Automotive giant Ford is shaking up its USA lineup by phasing out traditional sedans and hatchbacks such as the Fiesta, Taurus, and Fusion. Company spokesperson Daniel Barbossa says that of the phased-out vehicles, the Taurus is the only one made in the USA, at the company's Chicago factory. Ford also plans to bring 16 battery-electric vehicles to market by 2022.

Note that the streamlining of their portfolio only applies to cars like sedans.

Ford said its net income in the quarter was up almost 9.5%, to US$1.74bn, or US$0.43 a share, from US$1.59bn, or US$0.40 a share. Electrification would mean that those vehicles will be converted to mild hybrids, plug-in hybrids, or battery-electric powertrains. By 2020, Ford said last month, the company believes SUV sales could account for half of all US vehicle sales.

There will be some retooling to prepare for the new SUV models, but there is no plan to shut down the plant, Felker said.

There were about 17.2 million cars and trucks sold last year, according to Kelly Blue Book, a decrease from the previous year's 17.6 million sales.

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