Ford is Mostly Leaving the Car Business

Instead it will overwhelmingly be SUVs, trucks and commercial vehicles.

So another major war in the Middle East or peak oil finally arrives and gasoline prices shoot up to $5/gallon–well the people who can afford these vehicles can easily pay those prices out of petty cash.

If the cars aren’t selling then it’s hard to blame Ford for not wanting to make them anymore. The Focus and Fiesta are still popular cars in Europe so I assume they’re still going to make them for the international market.

Are modern crossovers that more inefficient than regular cars? With modern 4 cylinder turbos and hybrid technology you can probably get a pretty high mileage per gallon.

Which other marques does Ford own?

Right now, I’m pretty sure just Lincoln.

The spike in gas prices is not what tanked the industry in 2008. It’s only been 10 years, has everyone forgotten everything else that was going on then?

This is an interesting development. My folks (in their late 60s) are looking to buy a new Ford sedan in the next few months. It’ll be a Ford, there’s no other options - dad it a Ford retiree.

So, do they scoop up one of the models they love but will be out of production next year? (most likely Taurus) Or do they force themselves to consider an SUV?

I guess there’s not too many problems with buying a car in its last year. That actually happened to them when they bought their last sedan, a 500. It hasn’t been too bad for them keeping the car up, although I guess windshield wipers are kind of hard to get. But also the 500 was a short-lived model to begin with.

I don’t know about Ford, but my Nissan Rogue crossover gets great gas mileage. Much better than my truck or Saturn ever did.

Why not consider a crossover? The article says there will be a Fusion Crossover and the Escape doesn’t seem to be cut.

The crossovers are getting popular among the senior set because they are a little higher off the ground which means the passengers don’t sink into the seats and therefore don’t have to push themselves up to get out. Plus there’s a bit more cargo room if you fold down the rear seats.

They could also always buy a used car, too.

I’m in my 70s and so are most of my friends. No one I know drives a car. Everyone either has an SUV (or a crossover, which is very much the same thing) or a pickup, or both. SUVs have many advantages for everyone but esp. for us olders. No bending over to dig stuff out of the trunk, no stooping to get down into a car. Able to see traffic so much better. I am also “obliged” to drive Ford products since DH is a retiree, but it’s no sacrifice, believe me.

I’ll bet Honda and Toyota stock goes way up now.

Not a Ford, but the Subaru Forrester or Outback would be a good crossover choice. Seating is relatively high. Easy in and out.

I do drive an F150 Super Crew, so do like Ford trucks.


You are correct. Mercury went away in 2011. They had bought Jaguar, Land Rover, Aston Martin, and Volvo, but sold all of those off (Aston Martin in 2007, Land Rover and Jaguar in 2008, Volvo in 2010). Ford also had an ownership stake in, and development partnership with, Mazda for many years, but cut those ties over the past decade.

Good to know! My dad’s existing Taurus is sooooo low compared to my Escape, I don’t know how he gets his arthritic ass down in to the seat let alone back up again. But they are Sedan People, and keep going over in their minds about which sedan they want to buy but neither of them has sat in any other Ford except my Escape in 12+ years. So I hope they go to the dealership and the dealer shows them all their options, not just sedans. Maybe then they’ll see the value in the higher cars.

why would this be a concern? parts and service will still be available for quite some time.

Interestingly, one of the cars they’re keeping-the Mustang-is one of their lowest sellers (along with the Taurus). But it’s an iconic, image branding car, which is why they won’t let it go. It’d be like Chevy up and deciding to stop making the Corvette, even though they don’t sell very well either.

If someone wants a large sedan that is comfy, semi to fully luxurious in appointments, comfort, power and decent resale value my personal recommendation would be a Toyota Avalon. They are great cars. My Dad was always a “buy American” guy for a long, long time, and when he was finally successful and retired, he bought a Cadillac STS. He loved the car, but then it started developing all kinds of quirky issues, mostly electronics (he was fortunate he didn’t get one of the “bad” Northstar V-8 engines) that drove him nuts and he got rid of the car at 50k miles and took an absolute beating on resale. He’s since owned two Avalon Limiteds, and he loves them. All the features of his Caddy for almost $20k less in price. And everything always works on them, although granted he’s well-heeled and does every single recommended service at every single mileage/time interval.

This is the product of regulatory arbitrage of the fuel economy standards coupled with consumers’ nearly complete indifference to the virtues of greater fuel economy.

The Corporate Average Fuel Economy standards for new cars will become increasingly stringent over the next few years under. The standards target different levels of fuel economy for different vehicles but the way those standards are structured encourages automakers to sell more trucks, crossovers, and sport utility vehicles (hereinafter, “trucks”) and fewer cars. First, the standards impose much lower fuel economy standards on trucks. Second, the standards impose higher fuel economy standards on smaller vehicles than larger ones (whether they are cars or trucks) based on their “footprints,” that is, the area between the car or truck’s tires.

The targeted average fuel economy by 2025 for different types of cars and trucks looks like this:

Compact car - 40 sq. ft. footprint (e.g. Honda Fit) 61.1 mpg
Midsize car - 46 sq. ft. footprint (e.g. Ford Fusion) 54.9 mpg
Full size car - 53 sq. ft. footprint (e.g., Chrysler 300) 48.0 mpg

Small SUV - 43 sq. ft. footprint (e.g. Ford Escape) 47.5 mpg
Midsize crossover - 49 sq. ft. footprint (e.g. Nissan Murano) 43.4 mpg
Minivan - 56 sq. ft. footprint (e.g. Toyota Sienna 39.2 mpg
Large pickup truck - 67 sq. ft. footprint (e.g. Chevy Silverado extended cab, 6.5 foot bed) 33.0 mpg

(source (pdf):

For any given sq. footage of vehicle, the truck is allowed to get much worse fuel economy than a comparable car. For example, the 43 sq. ft. “small SUV” is targeting only 47.5 mpg, whereas the slightly bigger midsize car (46 sq. ft.) has to get 54.9 mpg, or 15.5% higher fuel economy. Since it’s much easier for Ford to hit the lower fuel economy target with the smaller vehicle, it’s easier and cheaper for Ford to make a compliant truck than a compliant car. If automakers don’t want to bother spending money on the most fuel-efficient technology, the easiest change to make is to stop offering cars altogether (or nearly so).

Today’s new vehicle consumers will pay more money for a crossover than they will for a comparable sedan that costs at least as much to build, so the crossovers are much more profitable. There aren’t enough die hard sedan buyers to compel Ford to keep making them. Ford will lose a few customers who absolutely insist on buying a sedan but the vast majority of those would-be Ford sedan buyers will just get tomorrow’s Ford crossovers instead. The sales that Ford does lose will be among their least profitable. Only American consumers are harmed because they will lose the choice of relatively affordable, economical vehicles.

When the EPA adopted the current CAFE standards, it said “Footprint based standards promote fuel economy and…are not expected to create incentives for manufacturers to change the size of their vehicles in order to comply with the standards.” This was a stupid and wrong prediction. I suspect the EPA was just repeating what automakers told them to get footprint based standards in the rules even if the automakers knew it was just going to lead to more higher-riding trucks with smaller footprints. Ironically, Volkswagen was one of the companies who objected to the footprint based standards because they knew it would push people to buy more trucks and fewer small cars. Volkswagen really only made small cars at the time. Once the standards were finalized, Volkswagen too started expanding its offerings of crossovers in the U.S.

I agree with you in suspecting that is why they’re doing it because the car/sedan market is still quite large & not expected to drop that much.

They’re walking away from 30% of the market. (33% - Mustang sales)

Facts on the ground -

Passenger cars have much less less profit margin per unit than the SUV/truck segments.

With stable to cheaper gas sales of passenger cars are slipping (sharply) to the larger vehicle segment. Not much chance to make it up with volume.

Sales in the segment will likely continue to slip as fewer Millennials are buying cars and more utilized ride hailng apps, and as EVs (which Ford competes fairly poorly in) encroach on market share. (Tesla inclusive but not exclusively.)

Plus the vehicles are lasting longer cutting into sales volumes as well.
Not too crazy to focus on what makes the most margin for now as you prepare your attempt to compete in the next stage with autonomous vehicles to be used commercially inclusive of ride hailing.
Question - what impact will this have on their ability to deal with fleet economy targets such as in CA?

Frankly, I think its a stupid decision. They’re conceding the car market to their competition.

It will be interesting to see where the Ford sedan customers go. I’d bet most will just opt for the Ford crossovers instead of buying a Camry or Accord, but some probably will.

While Camry sales are still strong, they have declined for the last 3 years, and RAV4 is currently outselling the Camry in the US. RAV4 sales have increased each year for the last 6 years.

Accord sales are similar (still top 20, but declined for the last 3 years. CRV is currently outselling the Accord. CRV sales have increased every year for the last 9 years. CRV is even about to pass the Civic in monthly sales.

I’d be very curious to see whether the trend continues, and if the Asian automakers will similarly shift resources to SUVs/Light Trucks/Crossovers.