4th Gen Focus goes Upmarket, will get "Active" Variant

[fuzzymoomoo]

How much profit do they have to make? I don't mind them making a profit, I don't want them to be greedy though.

It's got to be more than they're currently making. Margins are around 6% right now and they want to get it up to around 8%.

[akirby]

How much profit do they have to make? I don't mind them making a profit, I don't want them to be greedy though.

 

The point is this - if the only way you can sell small cars is to sell on price and compete with Nissan Versa, etc. and you only end up making $500 per vehicle - is that worth the investment or would it be better to spend that money on other models with more profit potential. If margins are that small and you get into a price war or the market tanks or you get a big recall then you're losing money.

 

It's like Mulally said about the Focus when he heard they were losing $3K on every one they sold. "Then why are you still selling them?". Great question.

[Pioneer]

You cant make any profit selling cheap vehicles so why bother?

Sure you can. Just make sure it's reliable and you're not wasting your profit on warranty work.

[akirby]

Sure you can. Just make sure it's reliable and you're not wasting your profit on warranty work.

 

Let's say you can make $1K per vehicle net profit at 10,000 vehicles per month - $120M/yr. That's 1.5% of Ford's overall profit. Throw in a price war (quite common on low priced vehicles) or recall and you're back to break even or losing money. And you're tying up engineering and testing resources that could be working on more profitable vehicles.

 

There is a reason Ford doesn't compete with a Nissan Versa. It's just not worth the effort.

[coupe3w]

 

Let's say you can make $1K per vehicle net profit at 10,000 vehicles per month - $120M/yr. That's 1.5% of Ford's overall profit. Throw in a price war (quite common on low priced vehicles) or recall and you're back to break even or losing money. And you're tying up engineering and testing resources that could be working on more profitable vehicles.

 

There is a reason Ford doesn't compete with a Nissan Versa. It's just not worth the effort.

 

Let me ask you this. How much profit is Nissan making on the Versa?

[Pioneer]

 

Let's say you can make $1K per vehicle net profit at 10,000 vehicles per month - $120M/yr. That's 1.5% of Ford's overall profit. Throw in a price war (quite common on low priced vehicles) or recall and you're back to break even or losing money. And you're tying up engineering and testing resources that could be working on more profitable vehicles.

 

There is a reason Ford doesn't compete with a Nissan Versa. It's just not worth the effort.

Ok. Counter argument. The person just starting out on life buys that Nissan Versa. It's reliable. There's no reason for him to look at another manufacturer when he gets a better job and replaces it. 5 years down the road he gets a promotion and buys a house. He trades the Versa in on a Titan.

[fuzzymoomoo]

Ok. Counter argument. The person just starting out on life buys that Nissan Versa. It's reliable. There's no reason for him to look at another manufacturer when he gets a better job and replaces it. 5 years down the road he gets a promotion and buys a house. He trades the Versa in on a Titan F-150.

FTFY

[akirby]

Ok. Counter argument. The person just starting out on life buys that Nissan Versa. It's reliable. There's no reason for him to look at another manufacturer when he gets a better job and replaces it. 5 years down the road he gets a promotion and buys a house. He trades the Versa in on a Titan.

 

I understand that argument and agree with it to a point. The question then becomes how often does that actually happen and what is it worth? I would counter that most people who are looking to buy on the cheap don't care about brands - only price.

[akirby]

 

Let me ask you this. How much profit is Nissan making on the Versa?

 

Not very much based on the selling prices. Of course it's sold worldwide so you have more volume, and Ford could do the same with a Chinese version. Perhaps Versa is a bigger percentage of Nissan's profits than it would be at Ford. It's an individual decision that varies for each automaker in terms of profit percentages and other projects/models.

 

Could they do it? Sure. Could they make a profit? Probably if they're careful. Is it worth more than other projects such as small utilities and Active variants that carry much higher MSRPs and more profit margin? I doubt it.

[tbone]

Ok. Counter argument. The person just starting out on life buys that Nissan Versa. It's reliable. There's no reason for him to look at another manufacturer when he gets a better job and replaces it. 5 years down the road he gets a promotion and buys a house. He trades the Versa in on a Titan.

This^^^

 

I believe inexpensive entry level vehicles are relevant to building your customer base. If people have a good experience with their first car it is probable they will give that same brand a shot on the next step up.

 

A cheap reliable 1983 Ranger is what brought me into the Ford fold and I have primarily driven Fords because of it.

[tbone]

 

I understand that argument and agree with it to a point. The question then becomes how often does that actually happen and what is it worth? I would counter that most people who are looking to buy on the cheap don't care about brands - only price.

They may be looking at price, but if you hook them, perhaps the next one is a more expensive Ford.

 

I have progressively gone from that Ranger to Raptor today, so there is at least example?

[silvrsvt]

Maybe true, but I think people shopping in this segment don't want more expensive. They want good solid transportation. Maybe I'm wrong, but I certainly am not going to pay over $25K for a Focus.

Do keep in mind the average cost of a new car is well over $26k. So you wouldn’t buy an ST or even an Rs Focus because they cost more then your magical number?

 

The Focus isn’t an entry level car...the Fiesta or Ecosport is.

 

The Focus roughy the size of a Tempo or Contour-both considered mid sized or compact cars in their day.

 

Let also no discount other changes like Ride sharing, etc that are effecting the market...the Focus is a good fit for things like this.

[jpd80]

I think that Ford is done with selling sub $20K vehicles, there's not enough margin in them to chase more sales..

[akirby]

I think that Ford is done with selling sub $20K vehicles, there's not enough margin in them to chase more sales..

Is there an echo in here?

[jpd80]

Is there an echo in here?

I should have qualified that with "Sub $20K cars made in North America"

 

Years ago it was all about competing head to head on low priced import cars but now it's more about offering

buyers more than just basic transport and better resale values.- Value perception is so important.

[coupe3w]

So what you're saying is Fords future is selling trucks, cuv's, sport utilities and titanium versions of cars just because they are the most profitable. I guess that makes sense. How many recalls were there on the Escape? I wonder if they are making a profit on that one. Probably only on the titanium edition.

[akirby]

Not just Titaniums. But I don’t seem them trying to sell $15K stripped models either.

[jpd80]

So what you're saying is Fords future is selling trucks, cuv's, sport utilities and titanium versions of cars just because they are the most profitable. I guess that makes sense. How many recalls were there on the Escape? I wonder if they are making a profit on that one. Probably only on the titanium edition.

We need to get away from the perception of recalls being bad for business, sure there's some cost negative

but as GM showed with the ignition switch recall, that was a massive selling opportunity for dealers.

 

Ford and GM's whole business plan has been about selling value added products , something GM has refined

to an art and not entirely unlike retail dumping but hey, it's working big time for them now that they're on top

of car inventory and focusing more heavily on Truck and utility production..

 

The big turnaround for Ford in Europe ws getting away from relying on massive sales of Fiesta and Transit

and start offering European buyers a more premium product oriented showroom. In Europe, around 75% of

Ford's passenger vehicles sold are either ST/RS, Titaniun or Vignale top of the line models.

 

 

The big failing for Ford in the past four years is that it didn't engage buyers with fresher Utility product,

GM has made an absolute fortune by aggressively selling as many full sized SUVs as possible.

Edited October 7, 2017 by jpd80

[coupe3w]

We need to get away from the perception of recalls being bad for business, sure there's some cost negative

but as GM showed with the ignition switch recall, that was a massive selling opportunity for dealers.

 

Ford and GM's whole business plan has been about selling value added products , something GM has refined

to an art and not entirely unlike retail dumping but hey, it's working big time for them now that they're on top

of car inventory and focusing more heavily on Truck and utility production..

 

The big turnaround for Ford in Europe ws getting away from relying on massive sales of Fiesta and Transit

and start offering European buyers a more premium product oriented showroom. In Europe, around 75% of

Ford's passenger vehicles sold are either ST/RS, Titaniun or Vignale top of the line models.

 

 

The big failing for Ford in the past four years is that it didn't engage buyers with fresher Utility product,

GM has made an absolute fortune by aggressively selling as many full sized SUVs as possible.

 

Say what? That isn't what this article says......

http://carsalesbase.com/european-car-sales-data/ford/

[jpd80]

Keep in mind, that article is Euro-centric and the models used for brand unification back in 2011 / 2012 were mostly

refreshed variants of exiting products already on sale in Europe. All of which is thanks to the former CEO squeezing

what was supposed to be unification models into a whole new product cycle.

 

If you think Ford's cars and Utilities in the US are stale, just imagine what folks in Europe must be thinking

C1 Focus dates back to 2003, EUCD Mondeo from 2007 and C1 Kuga / Escape from 2008.

 

It's actually quite rich of Ford to say that they are cutting development funding on new cars,

they've already been doing so for years now and referencing Utility development.

 

That's fine but Ford needs to stop pretending that they are doing anything massively different.

Hackett is an Image CEO and all he's doing is presenting Ford's plans with a more investor

friendly POV, Ford is just communicating plans better than under Fields... but still no sizzle.

 

Where are the compact and mid sized EV Utilities that Ford needs as the face of change?

The truth is that Ford has no financial transition strategy to 100% commit to these vehicles,

and that's why we're seeing and hearing nothing of substance.

 

Edited October 7, 2017 by jpd80

[IMSA-XJR9]

2019 Ford Focus Wagon spy shots and wagon

 

http://www.motorauthority.com/news/1028295_2019-ford-focus-wagon-spy-shots-and-wagon

[MKII]

Video of hatch and sedan mules

http://www.autobild.de/videos/video-ford-focus-mk4-erlkoenig-2018-12761343.html?obref=outbrain-autobild.de

[630land]

Is the US really getting the wagon?

Edited November 8, 2017 by 630land

[akirby]

doubtful

[PREMiERdrum]

Is the US really getting the wagon?

Firm no.