Better to quit the market now while they’re making some profit, then quitting after they’ve already lost their shirts.
Looks like a good time to short-sell “F”. They might become more profitable per dollar of revenue, but their revenue is headed down.
I think you’re right that this could also reflect Ford’s predictions about the auto market due to autonomous vehicles and ride sharing. If you expect auto sales to drop due to growth in shared cars, one way of right-sizing for that change is to be prepared to phase out production of roughly 30% of your product line.
It will make the federal standards much easier to meet, as I explained above. California has a rule that says if the car meets the federal standards, it also meets California’s fuel economy standards. As Trump begins dismantling auto efficiency rules, California is doubling down on its own, sources say
Other states can either adopt the California standards or have no standards of their own, in which case the federal standards apply by default. Ford’s move will make it much easier to meet all of the national fuel economy standards.
I think their thinking is that they’ll just be the first off of the sinking ship. Hyundai-Kia is taking it in the shins due to their sedan and compact car-heavy lineup.
Been saving so that I can pay cash for a Focus ST in about 3 years. By then my current Focus will be pretty much spent and I will be able to just write a cheque.
When the boomers have all bought their last front wheel drive crossover marshmallow, we can go back to something with a little style. In the meantime, Mazda3 GT it is.
I hope gas goes to $8 a gallon and everyone who bought a Kia Santa Outback XL parks it around back.
According to fueleconomy.gov:
2018 Focus ST city 22, highway 30, combined 25
2018 Subaru Outback city 25, highway 32, combined 28
The Mazda 3 is 28, 38, 31 which is higher than the Outback. But your dream of an economical Focus while slamming the gas guzzling Outback doesn’t stack up. Unless I am completely misreading your post.
The only real surprise to me is Ford dropping the Fusion. It sells pretty well in a crowded mid-size market, is a good and very nice car, especially in upper and Sport trim levels and they just redesigned it. It’s a little puzzling, however the Ford F-150 has been the world’s top selling vehicle for quite some time now (due to combined commercial and retail sales) and Ford is banking on that not changing.
The fuel economy/CAFE angle…I’m not so sure. Gas prices are rising as OPEC and the Russkies have throttled some production, coupled with the US now exporting vast quantities of crude due to the export ban being lifted and the rise of shale oil. I just read a CNN/Money article that says economists expect oil prices to continue to rise as a glut becomes a shortage and that early predictions of a huge EV impact on demand are highly overrated (for right now).
The price for a barrel of oil is now almost $72 a barrel, which is the highest it’s been in four years, so…cheap gas may have hit the bricks.
Thanks, Obama.
I agree is is sound business for a company to get out of a crowded market where they are not making money. It seems like a good move today. But, I think it was Yogi Berra who said: “It’s hard to predict. Especially the future.” If gas prices somehow find a reason to climb Ford may get clobbered by not having any smaller vehicles in their line-up. They are banking on small SUVs to be fuel-efficient enough to still compete if gas prices climb. Maybe it will be OK, maybe not.
I was not clear from the news articles that Ford was giving up on the sedans overseas. Is it only in the US where they are making this move?
That’s what I was coming in to say. Anecdotally it seems like one of a few key vehicles that has helped Ford recover a bit of their reputation, after decades of shitty reviews from Consumer Reports and other publications of that ilk. Of course, I didn’t buy one( went with a Mazda6 instead, which has a similar platform ). Still, I’m surprised that market segment has become such an albatross.
Of course, I suppose I might be a bit of a weirdo since four-door mid-size sedans are my vehicles of choice.
I’m not sure that the mid-size sedan market is such an albatross, just really competitive. If anything, it’s the full sized sedans that are that because they’re more expensive and the demographic on those slews towards older people that typically don’t turn their cars over every 4-5 years or typically lease vehicles.
The Camry and Accord are in that market segment and are GREAT cars and sell well. However, some mid-sized sedans are NOT good sellers. I have a lease on a 2015 Buick Regal and it’s Buick’s worst seller, and it is also a GREAT car, if a re-adaptation from GM Europe rebadged as a Buick for the American market. And the Buick LaCrosse is not one of their top seller either, and Buick is traditionally known for comfy semi-luxury cars (that are BIG).
Still, the writing’s been on the wall for awhile now. Crossovers, arguably started by Subaru en masse, have been outselling traditional cars for years now. In the case of Buick, the Encore is their best seller and it’s not close, and that tiny-ute is made in Korea. If the old guy wearing the Korean War Veteran hat that kept proudly proclaiming that he’d “only buy American, dadgumbit!” that I sold one to only knew, but I was not going to avail myself of that factoid (and frankly, it’s really where the money GOES in these days of globalized platforms and parts moreso than where a vehicle is assembled)…
What’s even more puzzling to me is the sheer amount of performance vehicles across ALL platforms and segments that are being sold right now. Never before have you had 500hp plus SUV’s, 350hp hot hatchbacks, 450hp mid-sized sedans amongst the muscle and sports cars. Cars have never been more capable and powerful than they are right now, and the horizon on gas engines is just not that far off and that will all end and we’ll have silent, soulless electric sports cars that accelerate from 0-60 in 1.9 seconds with nary a whisper of engine rumble. Amazing times we live in.
Several years ago Ford’s leadership was talking about how the U.S. passenger car market was plateauing and how they were preparing for that future. The drops of the last several years just sped up those plans.
All cars domestic market was regularly over 11 million in the '70s. After the recession it recovered up to upper 7 millions. Now it’s low 6. And of that, yes, Ford has been losing share. The passenger cars that do sell are not Ford’s and they have not invested well to compete with what cars are selling.
The U.S. passenger car market for Ford? Cutting bait is a good choice…
Good points!
I’m not particularly sensitive to the price of gas, which is why I wished for $8 a gallon. Just don’t drive much.
I wasn’t really slamming the Outback though. I don’t think there’s really a car called the Kia Santa Outback 
Yes in the US or more accurately North America. It would be more newsworthy, and odd, if it were everywhere worldwide.
Even if gas prices ever get really high in the US, whether the basic price or the US someday has fuel taxes like Europe (not likely but I guess you never know), the US makers have at this point I think pretty much satisfied themselves they can’t make money on small cars in the North American market. They make them at near break even to meet CAFE standards. But if they don’t make bigger sedans either, as others mentioned, then the CAFE standard isn’t as tight.
Also I didn’t see mentioned so far but perhaps a small part of the decision is the drift toward protectionism where they’d get more heat for making their small cars outside the US. And making them domestically makes it even less likely they could ever make money in that segment, high or low gas prices.
Not to mention that crossovers are a lot more practical than sedans if you have a family. I drive an old Taurus. It’s pretty spacious, but with a wife and two kids it fills up with stuff pretty quickly.
And if I were a single guy in the market for a Ford car (and didn’t just drive my Dad’s old hand-me-down car 100 miles a month), I would be looking at the Mustang, not one of the lame sedans.
I also wonder if Ford will have a skunks work project on building out a next generation fully electric sedan. Instead of modifying an existing chassis, start from scratch and see what you can create.
The US automakers will make “enough” money on small cars domestically once consumers feel the gas pinch in the USA just like in Europe. These same automakers seem to make profits in European markets and elsewhere. The catalyst of course seems to be high fuel prices. Of course, there’s more markup in cars the higher the sticker price becomes, so they make more, but selling small cars in large numbers ameliorates that and profits add up.
A lot of different factors occurred in 2008 that contributed to high fuel prices, some of the highest we’ve ever seen. There was a direct correlation between the big decline in truck and large SUV sales in 2008-2009 as a result of this, then all that rebounded when the economy picked back up and gas was cheap again.
When, not if, gas prices become untenable to many in America, and the US being set up the way it is where outside of a few urban centers you HAVE to have a car to get around, then we’ll see small cars rebound. Small cars make more economic sense than hybrids do right now anyway. The efficiency ratings of some of these newer small cars are nothing short of astounding, and the MPG’s are close enough to hybrid cars to utterly negate the higher starting price of a Prius and their ilk.
If I were in the market for a car in the next couple years, I’d buy a decent small to midsized car with an efficient 4 cylinder engine and keep it as long as possible to see how the gas prices versus EV penetration/cost sorts itself out over the next decade. It’s extremely likely such a car will easily last 10 years or more to be able to watch what’s going on around you before you ever decide on a replacement vehicle.
Kinda disappointing. I just bought a Focus ST, it was the car I wanted when I bought my Mazdaspeed3 in 2008, but Ford didn’t offer the ST here until 2013. I thought the Fusion was sort of interesting, but they always seemed expensive for what they were. I guess even at that price Ford still wasn’t making (enough?) money.
Congrats! The Focus ST is a great car to drive, I checked one out at the last dealer I worked at, which was a Ford store.
Honestly I’d rather own one of those than a Focus RS (which I’ve also driven) if I had to choose one as a daily driver. The ST is super fun through the twisties, gets good MPG and doesn’t have so much power it overwhelms the car. The RS is incredibly fun, but man that thing beats you up after awhile the ride is so harsh. An ST with maybe an exhaust, an intake and a mild tune would be perfect.
there are rather high incentives on them. There’s so much cash on the hoods of the Focus that you can get one for almost the same price as a Fiesta.
More inefficient than modern sedans, but equally or more efficient than the sedan you might’ve replaced it with. My 1999 sedan got 26 mpg the way I drove it. The crossover I replaced it with is advertised 30/23, though I haven’t yet seen what the real world mpg is.
Yes, and something called Troller in Brazil.
Which Rogue? The current 3 row vehicle? The smaller first generation, which later became Rogue Select? The newer Qashqai-based Rogue Sport? Because the middle one gets 24 mpg in my experience, pretty good but not tremendous.