Ford discontinuing many models in the future

[BlackICE]

https://finance.yahoo.com/news/ford-stop-selling-every-car-205243027.html?

Ford today announced it will phase out most cars it sells in North America. According to its latest financial release, the auto giant will "will transition to two vehicles" being the Mustang and an unannounced vehicle, the Focus Active, as the only traditional cars it sells in the region. Ford sees 90 percent of its North America portfolio in trucks, utilities and commercial vehicles. Citing a reduction in consumer demand and product profitability, Ford is in turn not investing into the next generation sedans. The Taurus is no more.

 

[2112]

I guess it is picking your battles.

They can win (& be profitable) with trucks and Mustangs, so let someone else compete with Japanese and Korean sedans.

OK with me. I will never buy a 4 door car. Trucks and Mustangs suit me just fine.

 

[txviper]

Actually, since the Crown Vics departure I haven't been interested in there sedans. The Vics were cool cars and built like a tank.

 

[Kayvan]

It’s all about the financing; there is no money in financing small ticket cars

Then legal; one ignition key class action OR tranny recall and decade of margin goes poof.

They will choke on it in end; just like GE and GE Capital today.

Don’t be a bank if you are not one.

 

[BlackICE]

It’s all about the financing; there is no money in financing small ticket cars

Then legal; one ignition key class action OR tranny recall and decade of margin goes poof.

They will choke on it in end; just like GE and GE Capital today.

Don’t be a bank if you are not one.

Isn't in Ford Credit a bank?

 

[twobjshelbys]

Duplicate

 

[twobjshelbys]

Isn't in Ford Credit a bank?

No more so that Visa or American Express. They are a credit lender. Their capital for lending does not come from deposits.

 

[2112]

I see the logic in making this move.

As long as Ford continues to engineer and build cars that require human input to control, I want them to survive and prosper.

I am a lifelong Ford loyalist.

 

[Specracer]

Will have great positioning when gas is back to $5.

 

[Cobrar]

Will have great positioning when gas is back to $5.

Expect that you’ll see a full range of powertrain options on many of the new (smaller SUV/CUV) programs; e.g. hybrid, electric as well as smaller IC (forced induction) engines to mitigate exposure to higher fuel prices. Traditional larger truck product to likely retain smaller IC and hybrid powertrains.

I’m more concerned about increases in gas taxes (federal and state) as the shift in powertrain (having less fuel consumption, therefore revenue) occurs. It’s kind of like a subsidy or contrived demand limiting consumer choice to full electric..

 

[NJGT]

In addition to allocating less capital to car platforms they are also increasing their cost cutting target by $11.5bln.
They specifically mentioned reducing marketing costs so the obvious question is what does this mean for the future of the Ford GT race program. In addition from a production standpoint are they still committed to producing 1,000 new GT's?

https://www.bloomberg.com/news/arti...1-5-billion-more-cuts-pulls-ahead-margin-goal

 

[dbk]

The volume of GT is not being reduced.

Race program is committed through the end of the 2019 IMSA season. I would not expect it to continue beyond that.

 

[2112]

I’m more concerned about increases in gas taxes (federal and state) as the shift in powertrain (having less fuel consumption, therefore revenue) occurs. It’s kind of like a subsidy or contrived demand limiting consumer choice to full electric..

That's already beginning to happen at state and local level. Not only to replace lost revenue due to increased fuel economy, but as a social engineering tool to save the earth (and equalize incomes).

 

[texas mongrel]

Don’t forget that Ford Europe will continue making cars for their market, so if there is a future demand for small sedans in the US, they’ll be able to jump back into the market fairly quickly.

 

[KMCBOSS]

Sad to see Ford end the battle for market share in the US. How many times will Ford be able to give up to the asian car manufacturers, before we see a mustang and toyoda symbol on the same car. GM appears to be using the same philosophy - cut and run.

 

[dbk]

I think that's a weird assessment. The Asian cars in the segments aren't selling very well either.

I have many opinions on the totality of the plans overall, but the fact they would stop selling some of these cars that don't make a lot of money or do a lot of volume in one market is not really a big deal to me.

 

[dbk]

It’s all about the financing; there is no money in financing small ticket cars

They will choke on it in end; just like GE and GE Capital today.

Don’t be a bank if you are not one.

Very, very wrong. There is plenty of money in financing small cars.

The investment banker view has always been "you know guys, we can help you sell the credit business and get you billions of dollars" because they view it as nothing but a...well, an easy way to make a bunch of money during a divestiture. This has been going on forever, and there's always some clever suit popping in to explain how they can get X billion dollars in the sale of the financing arm. That is until GM and FCA both lost theirs and then it became "oh these guys are at a disadvantage because they don't have a captive finance arm like Ford does." No shit, funny how that works.

FMCC is not a bank. It's a marketing and service arm that supports the parent company in a symbiotic way that a bank never would. A bank views any loan purely as an income stream, and they don't have any rooting interest in where the money goes. The captive finance arm views the loan as a conduit to keep a consumer returning to the parent company year after year, sometimes for decades. Even if FMCC didn't typically return in the ballpark of $2 billion in pretax profit basically every single year, they still exist as a support structure for the sale of *Ford* vehicles, and they take a very different view of the borrower than a bank does.

 

[Xcentric]

Dealership profit centers from most to least (actual dealers please tell me if this is wrong):

1. Financing (includes leasing)
2. Service and parts
3. Used cars
4. New cars

I'm a little confused by this "Ford not making cars." Do they not consider SUVs to be cars? Seems to me it's more like stop making sedans of all sizes. Not making cars hardly anybody wants seems like a good idea. If not for the tax cut "bonus," Ford's quarterly profit would have been down instead of up (14% pre-tax decrease vs. 9% after-tax increase).

And what does this bode for the Lincoln brand?

 

[Sinovac]

My 18 y/o daughter’s comment when I wanted to buy her a Fusion: “I want to sit up higher.” So Escape it is.
My 16 y/o daughter’s comment when I told her a Focus ST would be perfect: “I want to sit higher.” She’ll get a Ranger.

 

[Sinovac]

And what does this bode for the Lincoln brand?

Lincoln will become the home of the $100k+ SUV happily financed by FMC for 120 months.