Ford
Americans love pickup trucks and SUVs. Ford knows this and is ditching their sedans to focus on their meat and potatoes of sales – pickup trucks and SUVs. On Wednesday, Ford announced that in the “next few years” they would only sell two cars in North America — the Mustang and the yet to be unveiled Focus Active crossover that will launch next year. Thank goodness they did not get rid of the Mustang.
That means Ford will kill the Taurus, Fiesta, Fusion, C-Max, and Focus sedans because of “declining consumer demand and product profitability.” By eliminating these models, Ford Motor Co. targets to shed $25.5 billion in operating costs by 2022 and reach an 8% profit margin by 2020, which would be two years ahead of schedule. In 2017, Ford saw car sales drop by 14.2% and despite that significant tumble, the car company was only down slightly more than 1% thanks to strong truck sales.
“We’re going to feed the healthy part of our business and deal decisively with areas that destroy value,” Ford CEO Jim Hackett said on Wednesday. “It’s been easy to identify what’s wrong and what we need to do about it. The hand-wringing maybe that has been around in our business is gone. We’re starting to understand what we need to do and making clear decisions there.”
Very soon, Ford’s lineup will mostly consist of SUVs and trucks. Ford plans to launch five all-new SUVs over the next two years, along with the 2019 Ranger midsize pickup. In 2020, the automaker plans for nearly 90% of its vehicles sold to be a truck, SUV or commercial vehicle. Also in 2020, Ford will release the company’s first all-electric vehicle, the Mach 1 SUV and will feature 16 electric models by 2022. The car manufacturer stated that every new Ford or Lincoln vehicle introduced over the next two years will either have a hybrid or plug-in hybrid engine option. Ford feels that you won’t need a small car to get great fuel economy in the near future. We will have to wait to see how this aggressive new strategy works out for them.