"The segments are still significant", GM CEO Mary Barra told analysts on an earnings call Thursday. According to the news, in another 2 years, only 10% of the Ford vehicles being sold in showrooms in America will be sedans and sports cars such as the Taurus and Mustang. Citing reduced consumer demand and profitability of the product, Ford, in turn, invests in the next generation of sedans.
Ford will stop making the Fiesta, Focus, Fusion, Taurus, and C-MAX.
USA sales of large cars have declined by 34 percent in the past 5 years, and there is "significant unmet demand" for Explorer as consumers abandon traditional sedans for SUVs, she said.
The Ford Mustang and the F-150 are the company's breadwinners and with consumers shifting their priorities; so it was only a matter of time. Getting rid of slow-selling, low-margin auto models and refocusing the company around more lucrative trucks and SUVs is a crucial element of new CEO Jim Hackett's rebound bid. The new USA -market version of the Focus will be made in China.More news: Instagram enables sharing of multiple pictures, videos on Stories all at once
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"Although passenger vehicle segments have declined over the last number of years, they are still very important", GM's Stevens said, according to CNBC.
"The millienials and all prefer an SUV over a sedan" says Mike Carpino from Mike Carpino Ford.
Ford delivered increased revenue, up 7 percent year over year, and net income of $1.7 billion, up 9 percent year over year, more than explained by a lower tax rate.
The shocking part of Ford's announcement is "how quickly and how many vehicles" it chose to scrap in one move, said Jessica Caldwell, executive director of industry analysis for Edmunds. "By 2020, nearly 90% of our Ford portfolio in North America will be trucks, utilities, and commercial vehicles, including, of course, their electrified versions", Jim Hackett, president and CEO of Ford, said on the call.
Ford's battery electric vehicle rollout begins in 2020 with a performance utility, and the company will bring 16 battery-electric vehicles to market by 2022. "The entire team is focused on improving the operational fitness of ourbusiness, as well as meeting and exceeding our accelerated 2020 target of 8 percent margin and ROIC in the high teens". He talked with Marketplace host Kai Ryssdal about why American automakers like Ford are betting big on big vehicles.