Ford Is Right: Why Phasing Out Its Cars From The US Makes Sense

OK, so maybe the reason is quite straightforward: they don’t sell enough of them. Even so, Ford’s move to ditch small cars and sedans from its US lineup looks too drastic – but actually it was a long time coming.

Look at the models that are getting axed: the Fusion, C-Max, Focus, Taurus and Fiesta. All of them saw their sales taking a steady nosedive over recent years as customers started buying more and more SUVs and trucks.

Ford had to make a business decision whether it would invest its money into underperforming models or trim the fat and instead focus on where the North American market is really booming.

The company said in a statement: “…by 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America.”

“Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year. The company is also exploring new ‘white space’ vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility.”

Are you really going to miss the Taurus?
It’s not like we’re going to miss these cars, are we? Sure it would be great to get the new Fiesta ST, but a hot hatch with a three-pot under the bonnet isn’t really attractive this side of the pond. However, the biggest casualties for petrolheads are probably going to be the faster versions of the Focus, namely the future ST and RS. Given the Focus Active is going to be offered in North America, perhaps Ford will make an exemption for them, too, if we beg them hard enough – or maybe it won’t.

Ford expects to save from all this slashing and hacking an additional $11.5 billion as the company’s CEO Jim Hackett targets an 8 percent profit margin by 2020, two years ahead of their original schedule.

“Where we can raise the returns of underperforming parts of our business by making them more fit, we will”, said Hackett. “If appropriate returns are not on the horizon, we will shift that capital to where we can play and win.”

The remaining range will be updated with new hybrid-electric powertrains, and that includes models like the F-150, Mustang, Explorer, Escape and of course the long-awaited Bronco.

In addition, the company will launch an all-electric SUV in 2020 and promises to bring 16 battery-electric models to market by 2022. The sub-compact EcoSport will take the Fiesta’s place as the cheapest Ford you can buy.

Axing low-margin, slow-selling models is nothing new in the industry, and maybe Ford should have pulled the trigger earlier if it believes this is the way to go. Its rivals didn’t follow suit and elected to keep sedans in their lineup. Guess we’ll have and see how this one plays out.