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Money versus Market Share


Guest Sixcav

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Guest Sixcav

It occurs to me that the higher your price tags on your cars, the less market share you will attain. Everyone knows that Infiniti for instance makes great high end sedans. They have lots of bells and whistles, great styling, they're reliable, the whole nine. But they don't have a big share of the market. Why? Obviously because they cost a lot. Expensive cars by their very price tag mean that fewer people will buy them because fewer people can afford them. Just logical right. BMW? Same thing. BMW makes nice cars, they handle great, fairly reliable, luxurious and all that. But they have a small share of the market because they are expensive cars. So enough beating around the bush already right. Lets get the point because most of you monkeys around here have an attention span about a nano-second long. lol

So anyway, back in the recent hayday, the vehicles that were so profitable for Ford were what? That's right big SUV's and trucks like the Expedition, Explorer and full size F150. Now these vehicles were not exactly cheap right? I mean it wasn't uncommon for an Expedtion to go for 32 to 34 grand new right? Only guess what, that was still a lot cheaper than a lot of other SUV's on the market wasn't it? You surely weren't going to get the Acura SUV that cheap or the Land Cruiser or just about any Range Rover. So even though the Expedition and Explorer were pricey, they weren't quite as pricey as their competition. So guess what, Ford sold them hand over fist. Fast forward to present day. Gasoline is hovering around $3.00 or so a gallon and guess what, sales of the big SUV's and pick ups is way down. Naturally.

Now comes the problem. When people think about Ford they don't think "high end" cars and SUV's. I mean do any of you equate the blue oval with luxury sedans? When you think of Ford do you think that it's as upscale as Audi, BMW, Infiniti or Lexus? I surely don't. You can bet that the vast majority of the masses don't. They see Ford as cheap, reliable transportion, with the reliable aspect depending on whom you talk to. I know they're reliable but a lot of people are stuck in the 1980's. But by and large Ford is percieved as low cost transportation . . . until you get to the Ford lots. And there in lies the problem, at least I think. So here it is. Is Ford pricing themselves out of the market? We all know that the Expedition, Explorer and F150 can easily surpass the 30 grand mark in most cases. This isn't exactly cheap and coupled with low gas mileage, well you can just forget about making money there anymore. So along comes the Ford Edge crossover, but its still going to be around the 30 grand mark you can count on it. Not for a Ford they wont. Personally I think the whole SUV craze is coming to an end and sedans will lead the way again. So ok, the Fusion is the ideal Ford car. It's relatively affordable with a well appointed Fusion selling for about 24 grand and you can actually find Fusions on the lot below 20 grand pretty commonly. The 500 is slightly more expensive and frankly I think the higher price tag combined with the narcoleptic inspired design makes the 500 a loser. The Freestyle? Forget it, it's just flat out too expensive. People aren't going to pay 27 to 28 grand for a damn Ford station wagon. Remember, low cost transportation. The Mustang? About there only good seller but even then it's been mishandled. Your average Mustang GT on the lot is going for 29 grand and up. Check it out yourself if you don't believe it. So they don't move a lot of them. Mostly they sell V6 mustangs, which can still bang around the 24 to 25 grand range pretty easily. The Explorer can still get pretty pricey with a reasonably equipped Explorer hitting the 25 grand mark. And again, this is an SUV and they just aren't selling well at all. Escape? Same deal. People are avoiding anything in the SUV class these days because of gas. That combined with the fact that the Escape is getting dated and bingo, you got another loser. So lets sum it up alright?

Expedition? Pricey and a gas hog. loser

F150? Pricey and a gas hog. loser (commercial needs will keep it afloat)

Explorer? Moderately Pricey and something of a gas hog. loser

Freestyle? Overpriced versus competition. loser

Edge? Pricey and still an SUV. loser

Escape? Affordable, but still an SUV. loser

Ranger? Great Pricing but old as dirt and needed to be redesigned about a decade ago. loser

500? Somewhat affordable but about as exciting as watching dust collect. loser

Fusion? Their only bright spot. Good pricing, good car.

Mustang? V6 is affordable but GT is overpriced and both use a healthy amount of gas. 50/50.

I think in the end a lot of the problem is that aside form the Fusion, Ford is pricing its vehicles so high that people will just opt for something else. They are pricing themselves out of the market. People aren't going to pay 28 to 30 grand of average for your average Ford. They just don't view Ford cars as being worth that much. I think that accounts for a lot of Fords loss of market share.

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It occurs to me that the higher your price tags on your cars, the less market share you will attain. Everyone knows that Infiniti for instance makes great high end sedans. They have lots of bells and whistles, great styling, they're reliable, the whole nine. But they don't have a big share of the market. Why? Obviously because they cost a lot. Expensive cars by their very price tag mean that fewer people will buy them because fewer people can afford them. Just logical right. BMW? Same thing. BMW makes nice cars, they handle great, fairly reliable, luxurious and all that. But they have a small share of the market because they are expensive cars. So enough beating around the bush already right. Lets get the point because most of you monkeys around here have an attention span about a nano-second long. lol

So anyway, back in the recent hayday, the vehicles that were so profitable for Ford were what? That's right big SUV's and trucks like the Expedition, Explorer and full size F150. Now these vehicles were not exactly cheap right? I mean it wasn't uncommon for an Expedtion to go for 32 to 34 grand new right? Only guess what, that was still a lot cheaper than a lot of other SUV's on the market wasn't it? You surely weren't going to get the Acura SUV that cheap or the Land Cruiser or just about any Range Rover. So even though the Expedition and Explorer were pricey, they weren't quite as pricey as their competition. So guess what, Ford sold them hand over fist. Fast forward to present day. Gasoline is hovering around $3.00 or so a gallon and guess what, sales of the big SUV's and pick ups is way down. Naturally.

Now comes the problem. When people think about Ford they don't think "high end" cars and SUV's. I mean do any of you equate the blue oval with luxury sedans? When you think of Ford do you think that it's as upscale as Audi, BMW, Infiniti or Lexus? I surely don't. You can bet that the vast majority of the masses don't. They see Ford as cheap, reliable transportion, with the reliable aspect depending on whom you talk to. I know they're reliable but a lot of people are stuck in the 1980's. But by and large Ford is percieved as low cost transportation . . . until you get to the Ford lots. And there in lies the problem, at least I think. So here it is. Is Ford pricing themselves out of the market? We all know that the Expedition, Explorer and F150 can easily surpass the 30 grand mark in most cases. This isn't exactly cheap and coupled with low gas mileage, well you can just forget about making money there anymore. So along comes the Ford Edge crossover, but its still going to be around the 30 grand mark you can count on it. Not for a Ford they wont. Personally I think the whole SUV craze is coming to an end and sedans will lead the way again. So ok, the Fusion is the ideal Ford car. It's relatively affordable with a well appointed Fusion selling for about 24 grand and you can actually find Fusions on the lot below 20 grand pretty commonly. The 500 is slightly more expensive and frankly I think the higher price tag combined with the narcoleptic inspired design makes the 500 a loser. The Freestyle? Forget it, it's just flat out too expensive. People aren't going to pay 27 to 28 grand for a damn Ford station wagon. Remember, low cost transportation. The Mustang? About there only good seller but even then it's been mishandled. Your average Mustang GT on the lot is going for 29 grand and up. Check it out yourself if you don't believe it. So they don't move a lot of them. Mostly they sell V6 mustangs, which can still bang around the 24 to 25 grand range pretty easily. The Explorer can still get pretty pricey with a reasonably equipped Explorer hitting the 25 grand mark. And again, this is an SUV and they just aren't selling well at all. Escape? Same deal. People are avoiding anything in the SUV class these days because of gas. That combined with the fact that the Escape is getting dated and bingo, you got another loser. So lets sum it up alright?

Expedition? Pricey and a gas hog. loser

F150? Pricey and a gas hog. loser (commercial needs will keep it afloat)

Explorer? Moderately Pricey and something of a gas hog. loser

Freestyle? Overpriced versus competition. loser

Edge? Pricey and still an SUV. loser

Escape? Affordable, but still an SUV. loser

Ranger? Great Pricing but old as dirt and needed to be redesigned about a decade ago. loser

500? Somewhat affordable but about as exciting as watching dust collect. loser

Fusion? Their only bright spot. Good pricing, good car.

Mustang? V6 is affordable but GT is overpriced and both use a healthy amount of gas. 50/50.

I think in the end a lot of the problem is that aside form the Fusion, Ford is pricing its vehicles so high that people will just opt for something else. They are pricing themselves out of the market. People aren't going to pay 28 to 30 grand of average for your average Ford. They just don't view Ford cars as being worth that much. I think that accounts for a lot of Fords loss of market share.

mr negativity do me a favour and go out and buy a generic honda or toyota hope you have good luck with it but if you dont you would not tell us,,,,,,,,

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Hmm... I think you raise a few good points, but I hardly think Ford alone is guilty here; everything is so freakin' expensive nowadays. I wish I could cite the references I've seen in the past year or so, but it's well known that the "average price" of your "average new car" (however that is defined, bear with me) is actually beyond sensible financial reach for the "average family".

 

I mean, you're going to blast Ford for pushing toward 30K for most of their line, right? OK, fair enough. I wouldn't pay 30K for a FreeSnoozer either. :slap:

 

But would you agree that Ford is supposed to be a couple nothces above your bottom-feeder marques? And still a few rungs above entry-level traditional nameplates?

 

If so, have you priced the so-called "entry level" stuff? The Honda Fit, Toyota Scions, Nissan Versas ALL push toward 20K easily. Oh sure they "start" at 15K or so but big deal, try finding one and putting up with it at that price. And Ford is stuck giving Focuses away to compete. Hell even the craptastic Aveo can push into mid-teen territory, I believe.

 

So if we agree that most Fords should be seen and priced as a cut above those "entry-level" cars, where does that put us? $20K and up.... to $30K with options and model overlap and all that jazz. Sad but true. :shrug:

 

But I don't think the Infinitis, Caddys, Lexuses BMWs et cetera have gotten any cheaper either. And at least Ford, facing the equation of SUV + $3/gal = HA HA, starts the new Expy at 30K... which is a bargain, relatively speaking (and makes the Freestyle even more lame. They can't win).

Edited by goingincirclez
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REALITY CHECK:

 

4-cylinder equipped Highlander 4x2 w/3rd row: $25,380

 

6-cylinder equipped Freestyle 4x2 w/habitable 3rd row: $25,865

 

Most expensive base MSRP for a Highlander: $31,860

 

Most expensive base MSRP for a Freestyle: $31,000

 

YTD Highlander sales: 73,356

 

YTD Freestyle sales: 41,417

 

You cannot draw a line between price and content. Or price and segment.

Edited by RichardJensen
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Guest Sixcav

triton boy, I own a Ford buddy. I think they're pretty good cars.

 

Look guys, it's all about perception, like it or not. The general perception by the vast majority of American buyers is that Ford is supposed to be low cost, dependable transportation. That's reality Richie. Look at your own numbers, they've sold nearly 30 thousand more Highlanders than Ford has sold Freestyles. Don't you think maybe a good reason for that is people get to the Ford lots, see the 27 and 28 K average price tags on a Freestyle and think "Fuck that! I'm not spending that kind of money on a Ford. I'll go get the Highlander instead." Or whatever else they go get. It doesn't matter that the Freestyle has the V6. Your average driver of a station wagon isn't looking for horsepower, they're looking for safety, gas mileage and option content. It's not that the cost of the vehicles isn't justifiable although I doubt it is in many cases. It's that people figure if they're gonna pay 28 to 30 large anyway, why the hell would they spend it on a Ford? That's just a matter of perception and it's not going to change anytime soon. Sure people spend around that for a Mustang GT, but guess what, there's no other competition for the Mustang GT. There's lots of competition in the midsize sedan and station wagon segment as well as the SUV market. Like I said above, I think the whole SUV era is coming to a close. They won't be as popular as once they were. Sedans will lead the way again. I think. Don't quote me on that though because who knows really. At any rate, I think that's part of Ford's loss of market share. If I was in the market for a new station wagon I wouldn't pay 28 grand for a Ford station wagon when I can get the Volvo V50 for that or the Subaru Legacy wagon for that, or even less maybe. That's the problem. When people view your product as "Low cost transportation." and then get to your lot and it's not so low cost, they go somewhere else. Think about your average car buyer, he's got 27 grand to spend on a nice new 4 door sedan. He wants the best sedan he can get for 27 large naturally. Some coolness would be nice too right? A performance sedan. Nice wheels, good handling, decent motor, well appointed. Do you really think he's thinking about a Ford Fusion or a 500? Like it or not boys, Ford has got to bring down there prices if they want to sell cars. Look I must be right, they are losing market share and now they have to sell 2006 models at 0% for 72 months to generate some sales.

Edited by Sixcav
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If I was in the market for a new station wagon I wouldn't pay 28 grand for a Ford station wagon when I can get the Volvo V60 for that or the Subaru Legacy wagon for that, or even less maybe. That's the problem. When people view your product as "Low cost transportation.

 

Uh I like to known where you got that number for a Volvo V60, I priced out a loaded V50 Wagon one day for shits and giggles and it came out to $37K!

 

For that money I'll go get a Edge instead...

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Guest Sixcav

Spare me the bullshit silvrst with the unrealistic comparison tests. You matched up a loaded out V50 AWD with options and features that aren't even remotely available on the Freestyle. I speced out a 2.4i V50 with the sport package and climate package as options in addition to it's long list of standard features and guess what, 28,900. The Legacy Limited Wagon was 27,000 and the Legacy Limited Wagcon special edition was 24,000. You guys can piss and moan all you like. I don't like any more than you do. But Ford is losing market share and there has to be a reason why. You can yell at me for pointing out one of the reasons or you can accept reality. It's up to you.

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