FORD: Americas Dumbest company?

[CSM]

Others have said it before but I'll echo it again. Its not about sales figures, its about increasing the profitability for Ford in the North American Sector. They have been getting crushed by the competition when it comes to profit margins in the North American Market. If you read some of the investor call transcripts you will see that Ford is really pushing to get those margins to around 10% or higher.

Its a risky move but in a way it makes sense to cut vehicles that you make low margins on, and focus on your higher margin vehicles. They are hoping that the North American Market will continue to buy Fords, even if they are SUV and truck focused now. This is a risky move and hinges on gas prices big time. Also I myself will not (I'll probably get another hot hatch somewhere else) but I do not represent the majority of the buyers in the US. Lets face it, the trend is more SUV and Truck sales, especially as my generation start to have kids.

Also, Chrysler did a similar thing when the cut out the dodge dart. It just wasn't making a lot of money for them, and so they cut it from the lineup, and focused on a more simplified vehicle offerings. And look at their stock price since then in relation to Ford's....

And the last piece of the equation here is the CEO, Jim Hacket. Ford was struggling when he came on board and he has been under tremendous pressure to fix things. I personally believe a lot of this decision to cut the vehicles from the North American Market is more or less a last ditch effort by Hacket to save face....

Time will tell.

 

[ProDigit]

Others have said it before but I'll echo it again. Its not about sales figures, its about increasing the profitability for Ford in the North American Sector. They have been getting crushed by the competition when it comes to profit margins in the North American Market. If you read some of the investor call transcripts you will see that Ford is really pushing to get those margins to around 10% or higher.

Its a risky move but in a way it makes sense to cut vehicles that you make low margins on, and focus on your higher margin vehicles. They are hoping that the North American Market will continue to buy Fords, even if they are SUV and truck focused now. This is a risky move and hinges on gas prices big time. Also I myself will not (I'll probably get another hot hatch somewhere else) but I do not represent the majority of the buyers in the US. Lets face it, the trend is more SUV and Truck sales, especially as my generation start to have kids.

Also, Chrysler did a similar thing when the cut out the dodge dart. It just wasn't making a lot of money for them, and so they cut it from the lineup, and focused on a more simplified vehicle offerings. And look at their stock price since then in relation to Ford's....

And the last piece of the equation here is the CEO, Jim Hacket. Ford was struggling when he came on board and he has been under tremendous pressure to fix things. I personally believe a lot of this decision to cut the vehicles from the North American Market is more or less a last ditch effort by Hacket to save face....

Time will tell.

I agree with what you say, however, how does the American market think, when Ford would change it's mind about trucks later down the road, and start building passenger cars only?
I'm not sure if it'll affect anyone, since trucks and cars still get support from dealerships and mechanics.
But I guess there might be some fears of people who just bought a new Ford, only to hear Ford discontinues making them, so they fear there won't be a lot of support available soon anymore for their vehicle?

I think that Ford should have just continued building passenger cars, even if it was at very low volumes.
I work in hotels, and hotels have restaurants that often operate on a loss.
Owners know it, but still want their hotel to have a cafeteria or breakfast area, despite running a loss; because it might bring in more people to the hotel (which does make profit).
I think similarly with cars, just continue offering new models (though at a much lower production), may bring more faith in the brand.

There is this feeling, people get, they are being left out with their new car.
I don't think it was a very wise choice at all.
People might reconsider getting a Ford as their next vehicle, knowing Ford could just cut out production of cars they've been making for ages!

 

[Intuit]

How much is a Saturn worth these days? I think we need to keep in mind that models go down all the time. Brands do not. Question is, how much does it impact the sale value when a model is discontinued?

 

[BRGT350]

I don't see Ford is being the dumbest, but surely the most aggressive. They had to do something and this does make the most sense in terms for profit and shareholder's investment. I do think it was a very extreme measure that is very short term focused and created a large amount of consumer and PR backlash. At the end of the day, is anyone going to miss the Taurus and C-Max? Fusion? Only a small portion of the Fiesta/Focus community cares, and they all drive the performance models. For us, it sucks big time.

 

[zanethan]

I don't see Ford is being the dumbest, but surely the most aggressive. They had to do something and this does make the most sense in terms for profit and shareholder's investment. I do think it was a very extreme measure that is very short term focused and created a large amount of consumer and PR backlash. At the end of the day, is anyone going to miss the Taurus and C-Max? Fusion? Only a small portion of the Fiesta/Focus community cares, and they all drive the performance models. For us, it sucks big time.

I actually really like the Taurus SHO and the Fusion. Some of the best looking sedans in the market IMO. (Well I guess they are no longer in the market)

 

[BRGT350]

I actually really like the Taurus SHO and the Fusion. Some of the best looking sedans in the market IMO. (Well I guess they are no longer in the market)

I thought they were good cars, but wouldn't buy one. I think a lot of people didn't mind the look or the performance or the price, but still didn't buy one for whatever reason. Probably due to the fact they aren't as convenient as a crossover or SUV.

 

[Kalter]

I don't see Ford is being the dumbest, but surely the most aggressive. They had to do something and this does make the most sense in terms for profit and shareholder's investment. I do think it was a very extreme measure that is very short term focused and created a large amount of consumer and PR backlash. At the end of the day, is anyone going to miss the Taurus and C-Max? Fusion? Only a small portion of the Fiesta/Focus community cares, and they all drive the performance models. For us, it sucks big time.

I don't think a lot of people are going to MISS those cars, so much as Ford is going to feel it when people go back to cars.

The average consumer will go to another brand. Buy a car there. 4-5 years later, they go back there to buy a SUV. Wait. They never went to Ford in that equation.

Sure they say the majority of the market wants SUV, but the majority is 50%+1, what about the other half? This is what they are losing. They are losing low margin sales right now and they are losing high margin sales in the future because people won't be coming back.

I don't see any reason for me to buy a SUV. My girlfriend has one as the big car, but we don't need two big cars. an EcoSport still uses more gas than a Fiesta and probably than a Focus too, so what's the point? There's a bunch of people that are the same way.

I'm not discrediting the fact that more SUVs are sold, simply the decision to completely abandon that market is VERY short sighted.

 

[zanethan]

I thought they were good cars, but wouldn't buy one. I think a lot of people didn't mind the look or the performance or the price, but still didn't buy one for whatever reason. Probably due to the fact they aren't as convenient as a crossover or SUV.

I owned a SHO for a while. It was an awesome car. Super comfy and when you floored it, it was like Thor's hammer coming down. Unfortunately, I live in a changing area and while generally speaking it's safe people kept trying to break into it so I had to sell it.

 

[TyphoonFiST]

I owned a SHO for a while. It was an awesome car. Super comfy and when you floored it, it was like Thor's hammer coming down. Unfortunately, I live in a changing area and while generally speaking it's safe people kept trying to break into it so I had to sell it.

Thats... crappy...same thing with my Typhoon and previous owner had people constantly trying to steal it...so in the end...ge got tired of sending buckshot through his back door and sold it to me.

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[Slurp812]

Why are Americans obsessed with vehicles that flip over?

 

[Jerickson88]

it does leave room for innovation for something later though. They will continue to make these, just not for us. I think a lot of us are upset bc in 2022 when my FiST is paid off what next?

 

[me32]

I don't see Ford is being the dumbest, but surely the most aggressive. They had to do something and this does make the most sense in terms for profit and shareholder's investment. I do think it was a very extreme measure that is very short term focused and created a large amount of consumer and PR backlash. At the end of the day, is anyone going to miss the Taurus and C-Max? Fusion? Only a small portion of the Fiesta/Focus community cares, and they all drive the performance models. For us, it sucks big time.

Yes they are going to miss them. The dealers i have talk with are worried about loss of sales in volume. Not everyone can afford a 50k truck or suv

 

[me32]

I don't think a lot of people are going to MISS those cars, so much as Ford is going to feel it when people go back to cars.

The average consumer will go to another brand. Buy a car there. 4-5 years later, they go back there to buy a SUV. Wait. They never went to Ford in that equation.

Sure they say the majority of the market wants SUV, but the majority is 50%+1, what about the other half? This is what they are losing. They are losing low margin sales right now and they are losing high margin sales in the future because people won't be coming back.

I don't see any reason for me to buy a SUV. My girlfriend has one as the big car, but we don't need two big cars. an EcoSport still uses more gas than a Fiesta and probably than a Focus too, so what's the point? There's a bunch of people that are the same way.

I'm not discrediting the fact that more SUVs are sold, simply the decision to completely abandon that market is VERY short sighted.

Very well put. When you lose a customer its hard to get them back. Ask GM. They will tell you. They burned alot of customers and most never came backm they went to Toyota or Honda

 

[zanethan]

Yes they are going to miss them. The dealers i have talk with are worried about loss of sales in volume. Not everyone can afford a 50k truck or suv

Sure they can! With a small 5% down payment and 120 month loan any vehicle can be yours!

 

[Jerickson88]

Sure they can! With a small 5% down payment and 120 month loan any vehicle can be yours!

That’s an accurate statement. What’s gonna happen when the average Joe comes in making 45k a year and is forced into a entry level SUV at $40k a year, tax and title, he’s $45k deep in the car, $375/mo without extended warranties, and by the time it’s paid off, he’s got 225k miles on it, time to trade in for another! They will finance again, 0%@120 months lol

 

[zanethan]

That’s an accurate statement. What’s gonna happen when the average Joe comes in making 45k a year and is forced into a entry level SUV at $40k a year, tax and title, he’s $45k deep in the car, $375/mo without extended warranties, and by the time it’s paid off, he’s got 225k miles on it, time to trade in for another! They will finance again, 0%@120 months lol

And thus the cycle of excess capitalism continues!

 

[Intuit]

Here's a good idea. Just change the name from Ford to Lincoln! EDIT: /sarcasm

That’s an accurate statement. What’s gonna happen when the average Joe comes in making 45k a year and is forced into a entry level SUV at $40k a year, tax and title, he’s $45k deep in the car, $375/mo without extended warranties, and by the time it’s paid off, he’s got 225k miles on it, time to trade in for another! They will finance again, 0%@120 months lol

A potential problem with extended loans on a rapidly depreciating asset is the abandon rate will probably skyrocket at some point. With such a slow pay-off, versus a rapidly depreciating product, the loan company could be upside-down on the vehicle for far longer than they're comfortable with. People die. People get sick. Engines get killed. Interiors get trashed. Transmissions die. Vehicles get wrecked/totaled. Could be wrong, but that's what I'd suspect.

Not including insurance, fees, taxes, charges, interest...
$50,000 / 120 months = $417 per month
$40,000 / 120 months = $334 per month

 

[Jerickson88]

Here's a good idea. Just change the name from Ford to Lincoln! EDIT: /sarcasm



A potential problem with extended loans on a rapidly depreciating asset is the abandon rate will probably skyrocket at some point. With such a slow pay-off, versus a rapidly depreciating product, the loan company could be upside-down on the vehicle for far longer than they're comfortable with. People die. Engines get killed. Interiors get trashed. Transmissions die. Vehicles get wrecked/totaled. Could be wrong, but that's what I'd suspect.

Not including insurance, fees, taxes, charges, interest...
$50,000 / 120 months = $417 per month
$40,000 / 120 months = $334 per month

Oh I totally agree. I’ll probably have 110k on my fiesta when it’s paid off plenty of life left!

 

[me32]

Here's a good idea. Just change the name from Ford to Lincoln! EDIT: /sarcasm



A potential problem with extended loans on a rapidly depreciating asset is the abandon rate will probably skyrocket at some point. With such a slow pay-off, versus a rapidly depreciating product, the loan company could be upside-down on the vehicle for far longer than they're comfortable with. People die. People get sick. Engines get killed. Interiors get trashed. Transmissions die. Vehicles get wrecked/totaled. Could be wrong, but that's what I'd suspect.

Not including insurance, fees, taxes, charges, interest...
$50,000 / 120 months = $417 per month
$40,000 / 120 months = $334 per month

Thats assuming you actually get 0%. More than likely with rates going up the average rates with good/great credit will be 3.99% and those that arent so hot will be 7.99% +

 

[TheSixtyFive]

Honestly it doesn't matter anymore, I will simply buy somewhere else in the future. Goodbye Ford you will not see any money from me. I will not own a SUV. I cannot afford one of your trucks new, without Financial harm. Oh also your advertisement sucks it's almost as bad as Chevy, well it might be just as bad. I am disgusted by the SUV crowd boring lifeless sheep is all they are.

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Totally agree with U...In my country, buy a SUV, means buy something to override who has a little or medium car.....they can be seen in our highways, drive to Warp3..(perhaps they put some Dilithium in the fuel tank..) even when a speed limit says 90....And at School?..i saw Suv parked even on a flowerbed and in a third row...even in a fourth one..they completely don't care about it...