Ford minimizing vehicle lineup in the United States

27 April, 2018, 00:46 | Author: Shannon Aguilar
  • Ford to phase out Fusion, Taurus and Fiesta models

The president of the Ford Motor Company calls it a big a shift from cars to utility vehicles and that shift will make auto dealership lots like Simmons Rockwell near Hallstead look a lot different. "We aren't just talking about ideas; we've made decisions".

Ford Motor Co. is sharpening its knives to cleave another $11.5 billion from spending plans and cut several sedans, including the Fusion and Taurus, from its lineup to more quickly reach an elusive profit target. That is on top of about $14 billion in efficiencies the company had already promised to achieve in the next several years.

'We'll restructure as necessary, and we'll be decisive.

Ford CEO Jim Hackett confirmed the plan during the company's earnings call.

Analysts said the reasoning for the move is easy to see.

Ford posted a net profit for its first quarter of $1.74 billion equal to 43 cents a share, up from last year's first quarter of $1.6 billion equal to 40 cents a share. But the company's profit margin slipped to 5.2 percent from 6.4 percent a year earlier.

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Europe was the only other region where Ford was profitable - a $149-million pretax profit.

Only two sedan models will be available in Ford's North American lineup. Its margin in North America fell to 7.8 percent from 8.9 percent. "North American operations had been hurt by rising costs for key commodities such as steel and aluminum", he added. By 2021, Ford projects it will surpass Toyota and become the leader in the U.S. hybrid vehicles market in terms of sales, in part thanks to the hybrid F-150 and Mustang.

By "2020, nearly 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles", the automaker said.

Marketwatch has the details on Ford's plans. Several factors are involved in this transition, a couple of which being that trucks and SUVs are often more fuel efficient and better in terms of safety ratings and ride quality. In addition to putting hybrid-electric power trains into high-volume sellers in its SUV and truck line, the company will roll out a "performance utility" vehicle powered by an electric battery in 2020.

Responding to a shift in consumer demand to SUVs and pickup trucks, Ford said it planned to trim its North American vehicle portfolio to just two models: the sporty Mustang, which debuted 50 years ago this month, and a new compact crossover called Focus Active starting in 2019.

The two survivors? The iconic Mustang, unsurprisingly, as well as the upcoming Focus Active crossover.

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