Ford to kill off non-crossovers in the US – what do you think? [w/ poll]

The only models to survive the purge are the Mustang and Focus Active

In a move that is as shocking as it is eerily reminiscent of a similar move when FCA killed off the Chrysler 200 and Dodge Dart two years ago, Ford just announced that it will kill off most of its non-crossover cars in the US. Due for the chop are the Fiesta, Fusion and Taurus, three Ford staples that combined in 2017 gave the company almost 300,000 sales. We dive in to see whether there is any merit to this decision.

The hole is not that large and shrinking

While speculations of Ford not replacing the Fiesta, Taurus, and even the Fusion have been circulating around for a while, the shock factor is generated by the  announcement of the chop arriving simultaneously for all three models. But, if you start to think about it, the Fiesta and Taurus both sold fewer than 50,000 units last year, while the Fusion, while still popular at a little over 200,000, still sold considerably less well than the 300,000+ units at its peak in 2014. By comparison, both the aging Escape and Explorer crossovers sold around 300,000 last year, the best performance for the current generation models. Which gets at the heart of the issues – crossover sales in the US are booming (up 14% in Q1’18), while those of mainstream models are slumping at an alarming rate (down 11% in Q1’18). Ford’s move can be seen as simply getting ahead of the curve.

Crossovers are more profitable

One thing that public reaction often forgets is that volume is necessary but not sufficient for a company to make profits – it also needs for each vehicle sold to be profitable on its own. This is where crossovers dominate the mainstream models – the public is willing to pay considerably more for what is, from an engineering perspective, a car that is not much more expensive to manufacture. And it is not just the list price – sales of mainstream models, especially mid-sized and large ones, have long been driven by high discounts offered by dealers, further squeezing their profitability. 

Ford is not leaving 300,000 customers hanging

The key thing is that by pulling the Fiesta, Fusion and Taurus from market, Ford is not telling 300,000 customers to go look elsewhere for their new set of wheels. Rather, it hopes that those consumers will be tempted into its crossover models instead, which is not an unreasonable expectation given the strength of brand loyalty and, arguably, the higher utility offered by five-door higher-riding models with an image coveted by most buyers.

Tell us what you think in the comments section and poll below:

What do you think of Ford's decision to kill off its mainstream models?

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  1. Talk about a massive gift to the Japanese brands! I am pretty sure my brother, a lifelong Ford customer, will likely look to a Japanese brand when it comes time to replace his Fusion. It is about image when you are driving clients around….a messy back of a crossover doesn’t cut it.

  2. It looks that the three American Giants want to shift from volume to better profit margins, GM has sold Opel which has decent volumes but has been bankrupt for more than a decade and also wants to sell GM Korea, profit margins is what is the most important for the sustainability of a company.

    1. But, if you are going to invest in developent, build and sell the Focus and Fiesta for example, for other markets, i think that don’t sell those cars in USA, has no sense.

    2. If you sell 200.000 Focus and Fiesta, they are 200.000 cars more for you that help in the recovery of the investment and they are 200 k cars less for your competitors.

  3. I think there’s an option missing from your poll. I believe it will work for them short-term, but when the market changes ( and it always does ) they better be able to move quick. Mid to long term, i believe this will bite them in the ass.
    .
    There’s also a problem with your numbers. They’re not leaving behind 300k costumers, they’re also leaving behind Focus buyers. The only Focus to still be sold in the US will the be the 5 door Active, if you want a sedan, you are out of luck. Add another 100k on that pile. Do they really think they can keep even half of those 400k costumers?
    .
    Why can Toyota and Honda ( and others ) make a profit selling these type of cars ( even while, in many cases, building them in the US ) and Ford can’t? Like Janet said, this is a huge handout to their competitors.

  4. What does this mean in Europe view? Ford Crossovers/SUV’s (Kuga/Edge) are’t so popular in Europe.

    1. Taurus isn’t sold in Europe.
      Mondeo is, but no one is buying them – Dropped
      Focus and Fiesta are big sellers – No change, at least for the remainder of their ( brand new ) gens.

  5. Ford has been following the “One Ford” strategy for a while, so if the American HQ decide to kill the Fusion, then Europe won’t get a new Mondeo either. Those times are long gone, when Ford of Europe designed European Ford-models. The goal is to develop models that can be sold globally, but of course the F-series and the Expedition are exceptions. The Edge and the Mustang are now present in Europe, the Ranger returns to the American market – I think the Explorer can also be a global model, it’s not that large for the rest of the world. And it’s not quite unknown for the European car enthusiasts: it was officially sold there in the ’90s, like the Probe or the Windstar.

  6. Really not fan of where this industry is going with all those SUVs but it probably won’t hurt them too much on the long run.
    As for Ford Explorer in Europe I think it is not worth it, Edge is already way to expensive for a Ford over here and 5m SUV, that is the size of Q7 or even bigger actually .

    1. I think you’re right. Even though pricing of cars differs significantly between Europe and the US, Americans don’t mind buying large cars/SUVs from a mainstream brand. Most Europeans demand a luxury brand when buying a large SUV. And we all know that American ‘large’ isn’t the same as European ‘large’. So the Ford Explorer is way too big and expensive for the European taste.

      1. I think the Explorer could be a rival for the Toyota Landcruiser, the Ssangyong Rexton or the LR Discovery. They were brave enough to bring the Edge to Europe to rival the VW Touareg, maybe they make a step forward in the future with the Explorer.

        It’s not easy to follow this One-Ford strategy. There are some Ford-models, that simply can’t be global players: the Ka, the Galaxy and the S-Max, the Flex, the Expedition and the F-series, and there must be some Australian, Brazilian, Chinese and South African Ford-models as well. None of the manufacturers are capable of creating a line-up that contains only global models. That’s nearly impossible.

      2. Except Disco none of those is selling well in Europe, at least not well enough to be worth bringing it here. I really don’t think big Fords have any chance in Europe, just like big Opels or Renaults. I still find it odd, that Chinese Escort can’t be sold in USA as a Focus sedan.

      3. Actually, the Edge has similar sales to the Galaxy, and at a much larger profit I guess.

  7. I just bought a Ford Fusion Energi with 5 options and it’s the most awesome car I have ever owned. It is, however, also cheaper than the USED 1996 Nissan Altima that we purchased in the fall of 1996 (a lease early return). So, I can understand that they made ZERO profit on the sale of my car, but boy oh boy do I love this car!

  8. I see two flaws in the thinking behind Ford’s decision.

    1-that SUVs always bring a higher profit margin than passenger cars. So far, demand has grown enough to absorb an increasing number and variety of SUV models. Will there come a point, when all the NAFTA zone production capacity, plus imports, from US and foreign brands, are all SUVs, that production capacity exceeds demand? When production catches up to demand, the profits will evaporate as everyone competes for sales to keep their plants running. The US big three will be right where they started: facing vigorous competition from other brands, and razor thin margins. Then what? Retreat again to only making large pickups? And how long before Toyota and Nissan step up their game in that segment?

    2-the assumption that every Fiesta, Focus or Fusion prospect that comes in the door can be pushed into an SUV. Automakers build a variety of models because one style does not fit all. By offering a variety of body styles in a variety of sizes, automakers pick up marginal sales. While Ford is thinking it may be trading a 3% profit Fusion sale for a 10% profit Explorer sale, the reality may be that person does not want an SUV and, instead of getting the 10% profit sale, or a 3% profit Fusion sale, Ford gets zero, because the customer bought a Camry instead.

    I would not bet on “brand loyalty” to salvage a significant number of sales for Ford, when they don’t offer what that 300,000 customers/year want. One look at the trend of US big three market share over the last 40 years shows brand loyalty does not count for much.

    I seriously doubt the US will ever see the Focus “Active” either. For the last two years, Chevrolet has offered the Spark “Activ”, which is the same idea. I didn’t even know it existed until another person pointed it out today. Searching dealer inventory, I found no Spark Activ’s in stock anywhere in metro Detroit. I found one in metro Chicago and 2 in LA. The VW Golf wagon “Alltrack” is the same idea, jacked up on it’s suspension with plastic cladding. It sells at a tenth of the volume of the Subaru Outback. Neither Ford, nor Chevrolet nor VW has the brand equity for that sort of vehicle that Subaru has spent 30 years building. It doesn’t cost Chevrolet or VW that much to add their Outback clones to their lines as they already provide parts and service support for the base front drive Spark and Golf wagon. Without selling large numbers of conventional Focuses in the US to defray the parts and service support costs, offering the Focus Active here will cost Ford a fortune, for microscopic sales. I can’t believe that Ford doesn’t understand that. My suspicion is Ford is simply playing the crowd, the same way it played the crowd for the last two years over the gen 4 Focus that we will never see and the Active will be dropped from the US line before it ever arrives here.

  9. The day will come when fuel costs (or emission laws hit large -heavy vehicles) mean that SUVs (apart from compact crossover) are too expensive to run. Does Ford seriously think a customer for the Fiesta is going to buy an SUV? While the Mondeo goes- Honda sells piles of Accords, same for the Camry and VW still selling lots of Passats. While Soccor Mom (or Dad) has moved on from the People Mover to the SUV, I can’t see the older car buyer buying a (hard to get into/hard to maneuver/heavy on gas/poorer suspension SUV or CUV. Do they think city buyers will buy big SUVs to drive around traffic choked streets will limited parking for large cars? Once you stop selling them, you lose the expertise to build competitive ones again and while the Fiesta sells well in Europe there will be less investment once Detroit says it has no future to fit the world car strategy.

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