rperez817 Posted October 22, 2018 Share Posted October 22, 2018 Five Guys charges $8 for a hamburger. Outrageous? Yes sir. Don't know why anyone willing to spend $8 or more for a hamburger would go to Five Guys. So many better choices out there! Quote Link to comment Share on other sites More sharing options...
Fgts Posted October 22, 2018 Share Posted October 22, 2018 Why invest in a market that is significantly shrinking year after year? The sedan market has shrunk year to year- 2015-43.3% totals sales where sedans 2016-39.2% Why invest in an market that has been shrinking when you can invest in something that is growing and makes more $&&? Again, solve it by killing everything but one sedan for the leftovers and invest in the rest. It's funny Benz/BMW/VW can still offer station-wagons despite increased EV/CUV sales in thier showrooms, since sport car buyers are shrinking let's knock-off the Mustang too. Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted October 22, 2018 Share Posted October 22, 2018 As for Tesla-the Model 3 is fourth best selling sedan on the US market-at a price that is over 50k. Thats just nuts. For a month, it also had a huge amount of back orders that seem to be shrinking as delivery times are becoming faster and faster. I do think what Tesla has done has been incredible, but I think come early next year is the beginning of the end. Demand will have been fulfilled for the Model 3, they can't profitably build the $35,000 unit, are losing the big tax credit (Which in California now the $45,000 unit costs about $35,000 after all the rebates) on top of that they have a massive bond payment coming due. If they do a capital raise with a stock sale it could drive the stock under $218 a share which could force Musk to sell shares of his stock driving the price even lower. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted October 22, 2018 Share Posted October 22, 2018 Again, solve it by killing everything but one sedan for the leftovers and invest in the rest. It's funny Benz/BMW/VW can still offer station-wagons despite increased EV/CUV sales in thier showrooms, since sport car buyers are shrinking let's knock-off the Mustang too. A - it's not just that the sedan market is shrinking - it's also become commoditized to the point it's difficult to make a big profit. Benz and BMW are luxury makes with significantly higher ATPs and profit margins. Also the majority of what they sell here in NA was developed for ROW. If they were only selling in NA their products would probably be different. B - despite what some of you continue to believe, Ford (and every other company) has limited resources. They can't possibly do all of the things they want to do and keep all the existing stuff up to date at the same time without a huge expansion and big debt to fund it and that would be suicide. So it really comes down to whether you want Ford to keep Focus and Fusion, kill some of or delay all the new stuff, lower profit margins even more and then get stuck without any of the new stuff when the competition gets it in 2-3 years. Then you'll be saying "Why didn't they invest in BEVs and AVs and TaaS and new utilities and hybrids?". 2 Quote Link to comment Share on other sites More sharing options...
Sevensecondsuv Posted October 22, 2018 Share Posted October 22, 2018 (edited) You can say this 100 times a day and some people just wont get it.Because if that was the only thing that mattered, Ford should just quit the auto biz and invest all it's money in something else. There are plenty of things to invest in that consistently produce way better returns than anything the auto biz has ever come up with. Just think, they wouldn't even need all the employees! Of course that's nonsense, but this is the business Ford operates in. <10% margins are just the way it is. The winners (those companies making 9% instead of 2%) get there mostly by volume manufacturing / efficiencies of scale, and keeping costs as low as possible. Simply abandoning the lower half of the new car market isn't a recipe for winning the new car manufacturing game. You need the volume of the cheap cars to keep the high-margin vehicle's costs low, which keeps them high-margin. If it all averages out closer to 10% than 0%, you're winning. Edited October 22, 2018 by Sevensecondsuv Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted October 22, 2018 Share Posted October 22, 2018 You need the volume of the cheap cars to keep the high-margin vehicle's costs low, which keeps them high-margin. That doesn't work if you are LOSING money on each of those cheap cars. So, let's assume you sell the same number of high-margin vehicles as you do cheap vehicles. Now, let's say selling those cheap cars gives you $100/car more profit on the high-margin vehicle. But, for each of those cheap cars you sell, you LOSE $110. Now, that means that you LOSE $10 for every sale of the cheap cars. Is that a good business model? It could be IF folks routinely move up from the cheap vehicles to the high-margin vehicles. Studies and history have shown that is NOT the case anymore, therefore, it's a BAD idea to do that. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted October 22, 2018 Share Posted October 22, 2018 Ford will still have lower priced higher volume options, they'll just be utilities instead of sedans. There are at least 4 new products coming on the new C2 platform. New Escape, Baby Bronco, Ecosport replacement and a tiny pickup. They'll also be able to add Focus active once the mexican plants get converted to C2. They may also need Mexico for Escape overflow. Ranger/Bronco replaces Focus at MAP. They're not reducing products, they're replacing less profitable products with more profitable products in the same factory and on shared platforms. They're not eliminating lower priced vehicles, they're replacing lower priced sedans with lower priced utilities and active vehicles and a tiny pickup. 1 Quote Link to comment Share on other sites More sharing options...
Fgts Posted October 22, 2018 Share Posted October 22, 2018 A - it's not just that the sedan market is shrinking - it's also become commoditized to the point it's difficult to make a big profit. Benz and BMW are luxury makes with significantly higher ATPs and profit margins. Also the majority of what they sell here in NA was developed for ROW. If they were only selling in NA their products would probably be different. B - despite what some of you continue to believe, Ford (and every other company) has limited resources. They can't possibly do all of the things they want to do and keep all the existing stuff up to date at the same time without a huge expansion and big debt to fund it and that would be suicide. So it really comes down to whether you want Ford to keep Focus and Fusion, kill some of or delay all the new stuff, lower profit margins even more and then get stuck without any of the new stuff when the competition gets it in 2-3 years. Then you'll be saying "Why didn't they invest in BEVs and AVs and TaaS and new utilities and hybrids?". This is Ford, not Tesla, Delorean, McLaren or a real limited option manufacturer. Having one sedan for sell would not have that much of an impact as you mentioned. If Ford don't wanna one sedan, fine there other manufacturers that would but don't blow smoke for them either. Quote Link to comment Share on other sites More sharing options...
coupe3w Posted October 22, 2018 Share Posted October 22, 2018 They should just produce one car / SUV / CUV or truck a year at $8 Billion and be done with it. LOL Quote Link to comment Share on other sites More sharing options...
Gurgeh Posted October 22, 2018 Share Posted October 22, 2018 (edited) There are at least 4 new products coming on the new C2 platform. New Escape, Baby Bronco, Ecosport replacement and a tiny pickup. ...and don't forget the new Corsair (formerly MKC), currently Lincoln's best seller. Edited October 22, 2018 by Gurgeh Quote Link to comment Share on other sites More sharing options...
akirby Posted October 22, 2018 Share Posted October 22, 2018 This is Ford, not Tesla, Delorean, McLaren or a real limited option manufacturer. Having one sedan for sell would not have that much of an impact as you mentioned. If Ford don't wanna one sedan, fine there other manufacturers that would but don't blow smoke for them either. It's a timing issue. Once the mexico plants are C2 they could just as easily add some Focus car production back to the mix including sedans, if they wanted to. But they can't do that until the new utilities are ready and they convert the existing plants over to C2. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted October 22, 2018 Share Posted October 22, 2018 They should just produce one car / SUV / CUV or truck a year at $8 Billion and be done with it. LOL You're just not capable of any kind of logical, reasonable fact based discussion, are you? Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 22, 2018 Share Posted October 22, 2018 (edited) They should just produce one car / SUV / CUV or truck a year at $8 Billion and be done with it. LOL it's better than producing 8 billion cars for $1 Somewhere in between those two ridiculous extremes lies a sweet spot for maximum profit with least amount of builds. It was something Mulally went to great pains to convince Ford. What we saw was Ford using it as a tool to justify scrapping whole vehicle lines. The loss of Fusion and it high value Titanium buyers is all down to Ford not properly refreshing the vehicle......or was always their intention to move those buyers to utilities.. and seriously guys, look at results around the world, there's no profit without strong truck and SUV sales Edited October 22, 2018 by jpd80 2 Quote Link to comment Share on other sites More sharing options...
coupe3w Posted October 22, 2018 Share Posted October 22, 2018 You're just not capable of any kind of logical, reasonable fact based discussion, are you? Come akirby it was a joke! Lighten up there Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted October 22, 2018 Share Posted October 22, 2018 (edited) This is Ford, not Tesla, Delorean, McLaren or a real limited option manufacturer. Having one sedan for sell would not have that much of an impact as you mentioned. If Ford don't wanna one sedan, fine there other manufacturers that would but don't blow smoke for them either. You still missing the point on resources-why are you going to spend $$$ on something that possibly might not give you a return on investment? Edited October 22, 2018 by silvrsvt Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 22, 2018 Share Posted October 22, 2018 You still missing the point on resources-why are you going to spend $$$ on something that possibly might not give you a return on investment? Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted October 22, 2018 Share Posted October 22, 2018 Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. ^^^^THIS! So much this! Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Just in case someone didn't get the point, let's quote it a few more times... Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. Worse than that, which high value product misses out on funding so that Ford keeps building low profit vehicles. There, how's that? 2 Quote Link to comment Share on other sites More sharing options...
SoonerLS Posted October 22, 2018 Share Posted October 22, 2018 (edited) You still missing the point on resources-why are you going to spend $$$ on something that possibly might not give you a return on investment?It's not even about losing money; it's about maximizing the returns. If you can build something that nets you 4% profit in a shrinking market segment or something that nets you 8% profit in a growing market segment, you'd be a fool to chose the 4% product. This is not a "rising tide" scenario; production has a maximum output capacity. Every 4% car that they make is an 8% "white space" vehicle they can't make. If Fields hadn't dicked around and canceled the new Mexican plant, this would be a very different discussion, as they would've had the capacity to keep making the 4% cars as well as the 8% xUVs. But he did, and they don't, so it's not. Edited October 22, 2018 by SoonerLS Quote Link to comment Share on other sites More sharing options...
Kev-Mo Posted October 22, 2018 Share Posted October 22, 2018 (edited) Is Ford in trouble? I can't ever remember seeing a single company get their ass whipped like Ford did on CNBC last Friday (its on in the office). So, if they are not in trouble, the business community certainly perceives that they are in trouble! For these discussions, I just reach into my documents and copy/past the generic reply for "Sales down" and "Ford in Trouble..." type topics: I've been reading this forum for at least 15 years. Every month for all those years it seems to be the same story: 1. In a few years Ford will have all the best new products, just you wait! (this one goes back to when we were waiting for the 500, Freestyle, and T-Bird!, still true today!) 2. Fiat/Chrysler/Dodge/RAM/Jeep cannot continue with their shady reporting, crappy products, and incentive pricing much longer without imploding! 3. More volume = less profits, unless you are Toyota, But somehow only they can do it. I have accepted that I am fan of a perpetual mediocre car company. Same old story, Ford has had two decades to get their act together and make cool stuff that people want. Edited October 22, 2018 by Kev-Mo Quote Link to comment Share on other sites More sharing options...
SoonerLS Posted October 22, 2018 Share Posted October 22, 2018 Is Ford in trouble? I can't ever remember seeing a single company get their ass whipped like Ford did on CNBC last Friday (its on in the office). Got "their ass whipped" by whom? A bunch of analysts who couldn't find their butt with both hands and a proctologist as a guide? 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 22, 2018 Share Posted October 22, 2018 The worst of 2018 is behind them, Ranger is almost here and next year we get new Escape and Explorer. While the demise of cars is unfortunate (or at least the early timing of that) Ford has actually faced that issue long before any of its competitors and this time next year Ford should be on the rise... Quote Link to comment Share on other sites More sharing options...
Kev-Mo Posted October 22, 2018 Share Posted October 22, 2018 Got "their ass whipped" by whom? A bunch of analysts who couldn't find their butt with both hands and a proctologist as a guide? "So, if they are not in trouble, the business community certainly perceives that they are in trouble" Apparently these analysts have more weight than a few guys here in rose colored glasses always thinking selling more expensive trucks will be just fine. You can be sarcastic, but why would they single out Ford if they didn't suck? Quote Link to comment Share on other sites More sharing options...
Kev-Mo Posted October 22, 2018 Share Posted October 22, 2018 The worst of 2018 is behind them, Ranger is almost here and next year we get new Escape and Explorer. While the demise of cars is unfortunate (or at least the early timing of that) Ford has actually faced that issue long before any of its competitors and this time next year Ford should be on the rise... Yeah, I have a copy/paste for that: 1. In a few years Ford will have all the best new products, just you wait! (this one goes back to when we were waiting for the 500, Freestyle, and T-Bird!, still true today!) Quote Link to comment Share on other sites More sharing options...
twintornados Posted October 22, 2018 Share Posted October 22, 2018 Got "their ass whipped" by whom? A bunch of analysts who couldn't find their butt with both hands, a funnel, a flashlight, and a proctologist as a guide? . fixed 1 Quote Link to comment Share on other sites More sharing options...
rmc523 Posted October 22, 2018 Share Posted October 22, 2018 It's not even about losing money; it's about maximizing the returns. If you can build something that nets you 4% profit in a shrinking market segment or something that nets you 8% profit in a growing market segment, you'd be a fool to chose the 4% product. This is not a "rising tide" scenario; production has a maximum output capacity. Every 4% car that they make is an 8% "white space" vehicle they can't make. If Fields hadn't dicked around and canceled the new Mexican plant, this would be a very different discussion, as they would've had the capacity to keep making the 4% cars as well as the 8% xUVs. But he did, and they don't, so it's not. Makes you wonder why they couldn't just start building that factory again. Quote Link to comment Share on other sites More sharing options...
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