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mackinaw

The Brutal Reality why Ford is Cutting Cars

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An excellent article by John McElroy in Ward's Auto. Definitely worth the read. A few tidbits:

 

"We are witnessing the auto industry enter a new phase, one of steely-eyed, hard-nosed business decisions, where shareholder money only will be invested in ways that provide double digit returns, including the cost of capital. While this industry always has been brutally competitive, we’re entering an era that is going to disrupt or destroy the automotive world as we’ve known it. The forward-thinking automakers know they better be in supreme fighting shape if they are going to survive."

 

"Nostalgia counts for nothing in this new reality. The old rules no longer apply. It makes people uncomfortable, but that doesn’t matter."

 

"To survive, automakers need profitable operations, solid cash flow and fortress-like balance sheets. Anything that impedes this has got to go. So, get ready to see other operations get the axe."

 

Full article here:

 

http://wardsauto.com/ideaxchange/brutal-reality-why-ford-cutting-cars

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We should also remember Ford saying that it's going to reinvent the car as a crossover...

So Ford is not getting out of cars, they are just changing things enough to charge more

and acording to Ford, give car buyers what they've been asking for

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That was the best article on the subject, and 2b2 posted it on his forum also, but few people pay attention, and still want to whine and fuss about Ford discontinuing cars none of them would ever buy anyway.

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There is still a place for selling cars but Ford wants to realign itself with where most buyers are going, Utilities and trucks.

I think that it would be entirely possible to fill any on going car sales from imported Focus and Mondeo from China.

That way, Ford gets to do all it wants and still keep a lot of car buyers.

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Ford is just being realistic.

 

No serious minded person in charge of product development at an auto company is going to look at this chart and say "hey it is business as usual..."

 

There has clearly been a decisive paradigm shift away from traditional cars.

 

So the question for every car company is when to cut bait? Do you try to stay in the 30% (and declining) part of the market and ride it all the way down to ? knowing that limits your investment in trucks. Or you start working on filling demand on the 70% side of the market and hope to grow your market share there?

 

But remember, the distinction in cars vs. trucks is an artifact of FMVSS that defined the modern station wagon (CUVs) as a truck. If Subaru Impreza is a car but XV Crosstrek is a truck, then to me, the distinction is completely meaningless.

 

40061633570_e2fd3e6e4f_b.jpg

Edited by bzcat

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....But remember, the distinction in cars vs. trucks is an artifact of FMVSS that defined the modern station wagon (CUVs) as a truck. If Subaru Impreza is a car but XV Crosstrek is a truck, then to me, the distinction is completely meaningless.

.

I can remember then Charger first came out and Dodge had a station wagon version called Magnum....it was sold and titled as a truck to get around regulations....nothing new here....car vehicle manufacturers will always figure out ways to manipulate the market.

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.

I can remember then Charger first came out and Dodge had a station wagon version called Magnum....it was sold and titled as a truck to get around regulations....nothing new here....car vehicle manufacturers will always figure out ways to manipulate the market.

thats the same thing they did with the PT Cruiser.

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There has clearly been a decisive paradigm shift away from traditional cars.

 

So the question for every car company is when to cut bait? Do you try to stay in the 30% (and declining) part of the market and ride it all the way down to ? knowing that limits your investment in trucks. Or you start working on filling demand on the 70% side of the market and hope to grow your market share there?

 

 

But cars get better MPGs people claim, but yet the difference in actual costs between a Fusion and an Escape (which would be more or less its replacement going by current trends) has very little difference in savings when it comes to gas.

 

People aren't driving Explorers that got 17 MPG highway any more and after 20-25MPG your actual savings in fuel aren't as dramatic, unless your driving a shit ton of miles

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Go look at a 2.0 Edge vs. a 1.5L Fusion. 24 mpg vs. 25 if memory serves. These crossovers get better fuel economy than the older sedans and very close to current ones. The actual fuel cost difference is very minimal for the same size vehicle but with more cargo room.

 

And when the hybrids arrive they’ll get even better mpg.

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I am not in the car industry but have bought 16 + new personal cars in my 48 years of driving. 2 New Mustangs, 2 New Excursions, 2 New F150's, 1 New F350, 3 Suburbans, 1 S-10 Blazer, 2 Compact Toyota Pick Ups, 1 IH Scout, and a new F250 Super Duty Lariat on order that was supposed to be built this coming Monday. Obviously, I have converted to 100% Ford since the 2000 model year because GM left me hanging with no 3/4 ton Diesel SUV availability and in the recent past due to political $$$ bail out reasons. I will never go back to GM regardless and don't fly their flag at NASCAR races like I do for Ford Racing. I survived the 6.0 L debacle that cost me over $1.5K due to a dishonest dealer, stupid quality issues like the Edge heater core, door wiring harness breaks on the F150 and I am sure a few others. I am not counting the new cars my wife has driven (08 Edge now with 193,000 + miles on it)

I spent 29 years in very large corporate retail and know hard business decisions are necessary in a changing environment as the Ward's article pointed out. I have wondered for YEARS as tens of thousands of GM Tahoes, Suburbans, Escalades, Yukons etc have hit the highway, "Where is Big Blue?"

 

I guess my point in this rant is it is a business decision and nothing else. I hope it pays off because I think I am going to buy my first direct share of Ford stock. I vaguely remember a slogan called "BOLD MOVES"

 

http://wardsauto.com/news-analysis/ford-reveals-bold-moves-campaign

 

P.S. I might have to rethink this if my $3000 PCO expires before my F250 hits the ground..... LOL

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......because I think I am going to buy my first direct share of Ford stock......

 

 

I had the same thought. Even though I've owned Ford stock for decades, it may be time to buy some more. Adam Jonas, analyst for Morgan Stanley, and a notorious Ford critic, now rates Ford stock a "buy."

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I have a 2011 2.5 Fusion and 2015 2.0 Edge. The Fusion gets 4 to 6 more more than the Edge (about 4 better city and 6 better on the highway). There’s no way in real world driving (not EPA ratings) that a 2.0 Edge gets within 1 mpg of a 1.5 Fusion. I like the Edge and the 2.0 ecoboost, but gas mileage isn’t a strong suit. Weight likely has something to do with it. The hybrids will add additional cost. I hope they won’t have a CVT.

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You can’t go by “real world mileage” - there are too many variables.

 

I have both a 3.7L MKX and a 3.5lEB F150. Both get 21 mpg.

 

https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=39294&id=39545&id=39296

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The hybrids will add additional cost. I hope they won’t have a CVT.

To the best of my knowledge CVTs are a given on most hybrids.

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^&

I can remember then Charger first came out and Dodge had a station wagon version called Magnum....it was sold and titled as a truck to get around regulations....nothing new here....car vehicle manufacturers will always figure out ways to manipulate the market.

 

thats the same thing they did with the PT Cruiser.

just-imho - if a law is written with loopholes, I have No problem with companies using them

 

 

I had the same thought. Even though I've owned Ford stock for decades, it may be time to buy some more. Adam Jonas, analyst for Morgan Stanley, and a notorious Ford critic, now rates Ford stock a "buy."

is that [buy] before or after the "white flag" announcement? :stirpot:

 

 

I have a 2011 2.5 Fusion and 2015 2.0 Edge. The Fusion gets 4 to 6 more more than the Edge (about 4 better city and 6 better on the highway). There’s no way in real world driving (not EPA ratings) that a 2.0 Edge gets within 1 mpg of a 1.5 Fusion. I like the Edge and the 2.0 ecoboost, but gas mileage isn’t a strong suit. Weight likely has something to do with it. The hybrids will add additional cost. I hope they won’t have a CVT.

I've only knowingly driven a CVT once/sorta in the MKZ-Hybrid, felt fine ... BUT

have read that hybrid-CVTs are very diff from ordinary ones

fwiw

Edited by 2b2

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I have a 2011 2.5 Fusion and 2015 2.0 Edge. The Fusion gets 4 to 6 more more than the Edge (about 4 better city and 6 better on the highway). There’s no way in real world driving (not EPA ratings) that a 2.0 Edge gets within 1 mpg of a 1.5 Fusion. I like the Edge and the 2.0 ecoboost, but gas mileage isn’t a strong suit. Weight likely has something to do with it. The hybrids will add additional cost. I hope they won’t have a CVT.

The Hybrid CVT is different to other CVTs it doesn't use any of the belts or friction cones of normal CVTs

It's made like an auto transmission and uses an epicyclic drive train to combine ICE and electric power,

they are pretty bullet proof.

 

The way battery technology is advancing, I'd expect hybrids to become far more popular in the next five years.

Simply making low speed operation more fuel efficient will do more for people's fuel ills than trying to eek out

a few more mpgs on the highway cycle.

 

Super efficient turbo diesels may also have a future now that Bosch has miraculously come up with a new

emission controlling exhaust and engine program that lower emission to one tenth of current regulation limits.

 

E-CVT.png?resize=572%2C303

Edited by jpd80

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I wonder if Ford would consider something like the Euro S-Max as a white space vehicle,

sure, it an MPV but not like the mini-vans l remember......

 

 

5FW_90.JPG

 

 

 

And this is the Ford Galaxu stable mate, you see how it is much more of a mini van.

 

ford_galaxy_17652428.jpg

Edited by jpd80

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I wonder if Ford would consider something like the Euro S-Max as a white space vehicle,

sure, it an MPV but not like the mini-vans l remember......

 

 

5FW_90.JPG

 

 

And this is the Ford Galaxu stable mate, you see how it is much more of a mini van.

 

ford_galaxy_17652428.jpg

They would probably sell dozens. Edited by fuzzymoomoo

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I have a 2011 2.5 Fusion and 2015 2.0 Edge. The Fusion gets 4 to 6 more more than the Edge (about 4 better city and 6 better on the highway). There’s no way in real world driving (not EPA ratings) that a 2.0 Edge gets within 1 mpg of a 1.5 Fusion. I like the Edge and the 2.0 ecoboost, but gas mileage isn’t a strong suit. Weight likely has something to do with it. The hybrids will add additional cost. I hope they won’t have a CVT.

 

 

Drive them both into a 20-30 MPH wind (we get a lot of those around here) and you'll be shocked at how much better the Fusion will do with MPG. My F-150 was rated like 18 city 21 highway and I never see better then 15-16 around town and 17-18 on the highway. I suppose if I poked along at 55-60 MPH and never drove against any wind I might, but in the real world I can't get close to the EPA ratings. Tall vehicles just aren't very aerodynamic and once you get to the bigger trucks you're pushing a box into the wind.

Edited by 2005Explorer

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I have a 2011 2.5 Fusion and 2015 2.0 Edge. The Fusion gets 4 to 6 more more than the Edge (about 4 better city and 6 better on the highway). There’s no way in real world driving (not EPA ratings) that a 2.0 Edge gets within 1 mpg of a 1.5 Fusion. I like the Edge and the 2.0 ecoboost, but gas mileage isn’t a strong suit. Weight likely has something to do with it. The hybrids will add additional cost. I hope they won’t have a CVT.

 

Exactly. I get 21 in my fusion Sport (Edge Sport gets 16), she gets 24 in her AWD 2.0 escape.

Night and day vehicles. The Escape only does one thing better, sits higher.

You couldn't pay me to drive escape, ride quality is horrible and handling pathetic.

 

If I drove as conservative as her, I could get very close in mileage with a car, a

class higher, larger and so much faster, you might as well be walking in the escape.

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Easily. Dozens.

I guess we’ll find out soon enough

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I guess well find out soon enough

That form factor has never done particularly well in the United States for whatever reason.

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That form factor has never done particularly well in the United States for whatever reason.

I know that, it looks like an overgrown Prius..so I pray that Ford uses more Mondeo 5-door or SW in the mix.

Edited by jpd80

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I am not in the car industry but have bought 16 + new personal cars in my 48 years of driving. 2 New Mustangs, 2 New Excursions, 2 New F150's, 1 New F350, 3 Suburbans, 1 S-10 Blazer, 2 Compact Toyota Pick Ups, 1 IH Scout, and a new F250 Super Duty Lariat

 

 

Bet you wish you had that IH Scout still......those things are worth some serious cash. Welcome to the forum as well!!!!

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