Ford to drop American Sedans

27 April, 2018, 00:24 | Author: Barbara Daniel
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Passenger cars will likely remain at Ford dealerships through next year but by 2020 the company will sell mostly trucks, SUVs, and crossovers.

Ford will shrink its vehicle portfolio, and at the same time it plans to add five all-new SUVs over the next two years, along with the 2019 Ranger midsize pickup that debuted at the Detroit auto show in January.

The No. 2 automaker in the US said it is now planning to cut up to $25.5 billion by 2022 in costs, which is up from its previously announced amount of $14 billion last fall.

Ford predicted that by 2020, nearly 90 percent of its portfolio would be trucks, SUVs and CUVs, and commercial transportation like vans and police cars.

The cuts will take place over the next few years, Ford said. Ford expects the measures to enable it to achieve a global profit margin of 8 percent by 2020, two years earlier than it previously forecast, he said. CEO Jim Hackett said that this was to turnaround "underperforming" models.

Ford had already announced that the new Fiesta ST would not be crossing the pond due to a lack of interest in the segment, but the main justification is, understandably, profit.

Ford is not going to invest in the next generation of Ford sedans in North America including its full-size Taurus or midsize Fusion, said the company in its outline.

In another change, Ford says it will add hybrid motors to its profitable high-volume vehicles, like its F-150 truck, Explorer and Escape SUVs, and the Mustang. Profits before taxes fell to $2.2 billion from $2.5 billion. "Ford's auto sales have been dismal for the past couple of years, and there's no end in sight to the decline of traditional cars". Europe was the only other region to turn a profit for Ford. The company cited statistics that show almost nine out of 10 Ford vehicles bought in North America are trucks, commercial vehicles, and utilities.

So what Ford vehicles are being dropped? The company plans to have refreshed 51 percent of its vehicles by the end of 2019 in a process that began in 2017, and it boasted of 11 launches in 2018.

Ford says that it "maintains the highest transaction prices of any full-line automaker - $36,300 per vehicle". "We can make different investments, we can partner, we can exit products, markets - and we will do that".

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