It includes Mustang, a fifty-year-old sports auto model of Ford, and Focus Active, a new active crossover vehicle model of the firm that is likely to be launched next year. The company now builds vehicles on nine platforms that aren’t as flexible.
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What would Henry Ford think? “As the years go by, Ford will adapt and fit everyone’s needs”. Past year the automaker announced that, by 2020, 90 percent of its portfolio will be made up of trucks, utilities, and commercial vehicles.
Killing the sedans is part of Ford’s overall plan to increase profit margins to 8 percent by 2020 by slashing $11.5 billion in costs across the company.
Ford’s CEO laid out a cost reduction plan in late 2017. “It is indicative of a management team for whom there are no sacred cows and which seems increasingly likely to pull other such levers to aggressively improve earnings and shareholder value”. It wasn’t just that consumers spontaneously desired a truck that was as big as a house.
The Chief Executive Officer of the Italian-American company, Sergio Marchionne completely did away with the Chrysler 200 and Dodge Dart sedans. Marchionne is retiring in 2019, and his ambition is to surpass General Motors’ margins in the North American region before that.
Ford is expecting commodity costs will be a $1.5 billion headwind this year, with about $500 million of that coming in the first quarter, Shanks said. In that same span, the company sold 202,927 SUVs and 267,860 trucks.
Jim Farley, Ford’s president of global markets, takes a more optimistic view.
“We’ll restructure as necessary and we’ll be decisive”, Hackett said. Fuel economy figures are comparable – the Escape gets just 1 mpg less than the Fusion, and the Explorer actually has a slightly better EPA rating than the aging Taurus. “Now it’s very modest”.
The deep cuts to Ford’s vehicle lineup are part of the company’s goal of creating “a winning portfolio and focusing on products and markets where Ford can win”, the company said.
That leaves the automaker heavily reliant on trucks and SUVs, with crossovers to pick up most of the small-car detail for most shoppers.
While scrapping several sedans continues to pay off for Fiat Chrysler – the Italian-American automaker nearly halved net industrial debt in the first quarter – the moves aren’t without risk for Marchionne or Ford’s Hackett.
Currently, Ford sells six of the sedans and coupes in North America: Fiesta, Focus, Fusion, C-Max, Mustang and Taurus.
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Ford Motor Company sent us a statement, today, stating, in part.
