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FORD: Americas Dumbest company?

TyphoonFiST

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#1
Here's the link....

https://seekingalpha.com/article/4176662-ford-americas-dumbest-company


There is Sordove a silver lining point made though in the article.... At least they aren't done completely making their vehicles everywhere! Which means it could be revived when the mistake is seen that everyone doesn't want a God damn SUV OR TRUCK.



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#3
America's dumbest company would be any number of Silicon Valley venture capital firms. But I agree, the discontinuation of all small and fuel efficient vehicles in America is a remarkably myopic strategy, especially because gas is already starting to creep up towards $4/gallon again.
 


jmrtsus

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Gas mileage is not the reason people are not buying small cars.....the price of gas always goes up in the summer historically. Of our six adult children three drive SUV's because they feel with the majority of vehicles being large and heavy on the road that they and their kids are safer in an SUV. The other three have no kids yet and drive a built Trans Am and BMW's. As to pick-ups that is to me just a redneck/male thing other than the few actual work trucks owned by individuals. These cars will be built for the rest of the world and they can be brought back if things change. Just a smart marketing move that is being done by GM also. No more Buicks and they are dropping many cars. Ford owns the truck market and will concentrate on their most profitable line. GM stopped production of 'Vettes earlier this year due to poor sales and Toyota stopped Camry production due to poor sales but resumed later. 'Vette never did........
 


Ford ST

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Honestly it doesn't matter anymore, I will simply buy somewhere else in the future. Goodbye Ford you will not see any money from me. I will not own a SUV. I cannot afford one of your trucks new, without Financial harm. Oh also your advertisement sucks it's almost as bad as Chevy, well it might be just as bad. I am disgusted by the SUV crowd boring lifeless sheep is all they are.

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zanethan

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#6
Gas mileage is not the reason people are not buying small cars.....the price of gas always goes up in the summer historically. Of our six adult children three drive SUV's because they feel with the majority of vehicles being large and heavy on the road that they and their kids are safer in an SUV. The other three have no kids yet and drive a built Trans Am and BMW's. As to pick-ups that is to me just a redneck/male thing other than the few actual work trucks owned by individuals. These cars will be built for the rest of the world and they can be brought back if things change. Just a smart marketing move that is being done by GM also. No more Buicks and they are dropping many cars. Ford owns the truck market and will concentrate on their most profitable line. GM stopped production of 'Vettes earlier this year due to poor sales and Toyota stopped Camry production due to poor sales but resumed later. 'Vette never did........
Ummm the corvette isn't out of production... they shut down production for renovations to the plant and I suspect an overhaul of tooling for the next generation that will be mid engine.

Also, yes gas prices historically go up in the summer, but they never dropped off at the end of last summer. Therefore they are increasing on top of last summers increases.

Only time will tell but in my opinion this is ultimately a bad long term decision as they now need to make up for the 500,000 CAR sales in 2017. They will either need to do this via increasing profits on the existing customer base (most likely) or by luring in new customers and convincing them that they want SUVs. Given that the 500,000 people that bought CARS had the option of an SUV I'm guessing the second option will be a tall order. At a minimum the car should have been viewed as a marketing tool. Get young people to by a new compact/midsize out of college and then get them to trade up into the SUVs/crossovers as they have kids, make more money, etc. and develop a brand loyalty. Ford will not have a true entry level vehicle in 2020 (ironic cause that's what hindsight is). Sure, I guess the Ecosport is "entry" level but you could pick up a Fusion (which is larger) for about the same coin.

The funny thing about this entire thing is that at the shareholder meeting where they made the announcement many shareholders voiced concern over this decision...I wonder why that is...
 


CarGuy

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#7
Ummm the corvette isn't out of production... they shut down production for renovations to the plant and I suspect an overhaul of tooling for the next generation that will be mid engine.

Also, yes gas prices historically go up in the summer, but they never dropped off at the end of last summer. Therefore they are increasing on top of last summers increases.

Only time will tell but in my opinion this is ultimately a bad long term decision as they now need to make up for the 500,000 CAR sales in 2017. They will either need to do this via increasing profits on the existing customer base (most likely) or by luring in new customers and convincing them that they want SUVs. Given that the 500,000 people that bought CARS had the option of an SUV I'm guessing the second option will be a tall order. At a minimum the car should have been viewed as a marketing tool. Get young people to by a new compact/midsize out of college and then get them to trade up into the SUVs/crossovers as they have kids, make more money, etc. and develop a brand loyalty. Ford will not have a true entry level vehicle in 2020 (ironic cause that's what hindsight is). Sure, I guess the Ecosport is "entry" level but you could pick up a Fusion (which is larger) for about the same coin.

The funny thing about this entire thing is that at the shareholder meeting where they made the announcement many shareholders voiced concern over this decision...I wonder why that is...
Exactly my thoughts. Seems a very poor long-term decision. Even if they build more economic and/or smaller SUVs they are abandoning a huge market of cars. Stupid move!

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D1JL

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#8
I spoke to a co-owner of a very large Ford dealership yesterday.
I was told they never had any problems selling sedans or smaller type cars.
Additional comments were that, they also were not too happy with Ford's decision.
However, there was nothing that they could do about it either.


Dave
 


Ford ST

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I spoke to a co-owner of a very large Ford dealership yesterday.
I was told they never had any problems selling sedans or smaller type cars.
Additional comments were that, they also were not too happy with Ford's decision.
However, there was nothing that they could do about it either.


Dave
They sell a ton of Ford focus's where I live. I see a lot of Ford car's new and old. So yeah sucks for the dealers for sure.

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zanethan

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#11
The 2018 Vette was in production for only 4 months, the 2019 will be basically unchanged other than the ZR1. So they shut down the 2018 model to build the 2019 (unchanged 2018) model. Why? Because they can't give them away and the mid engine car is still behind schedule, so bait fools with and early 2019 model.

April,2018 Ford sold 135K trucks and SUV's and 39K cars. They sold double the Fiesta sales with the EcoSport and sold only 3k Fiesta's. Average price on the F150 was 43K no price on avg Fiesta but 15k or less I am sure. They do not have to make up for 500K cars, they will no longer have the overhead of building those 500K cars. And keep in mind car sale were down 22% from last year while truck/SUV's were up 7% and future projection do not show any improvement. Gas mileage is not a concern, a new 2018 Escape in the family with the 1.6L turbo gets 33 on the HWY and my FiST gets about 35 on 10% ethanol. So no big penalty.
We could argue numbers all day but yes they DO have to make up that lost revenue. Assuming the average sedan price was $20k and that Ford made a profit of only 1% (I've seen articles stating that they actually made 2-3%) that's $100,000,000 in lost PROFIT. That's after the overhead. Sure they can layoff people but that's jobs lost. (High paying American jobs BTW). It is never a good idea to surrender a business market when it is still profitable. Market trends change all the time. If this trend toward SUVs changes, which it very well could. Ford doesn't have a leg to stand on. Trust me this is a short term gain long term loss for Ford (it's also what they did in the early 2000s and they almost went bankrupt). Now if the market was actually no longer profitable and Ford actually couldn't sell cars, abandoning the market is one thing but that is not what has happened here. They are prematurely abandoning the market and assuming that it will become unprofitable.
 


Plainrt

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#12
Screw ford. I was thinking of buying a flex for the family Mobile but won’t even do that now. Ford seems to have forgot that many people own multiple cars and like to buy different types of vehicles from same brand. I hope they regret this. I see tons of fusions and focus cars daily.
 


me32

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We could argue numbers all day but yes they DO have to make up that lost revenue. Assuming the average sedan price was $20k and that Ford made a profit of only 1% (I've seen articles stating that they actually made 2-3%) that's $100,000,000 in lost PROFIT. That's after the overhead. Sure they can layoff people but that's jobs lost. (High paying American jobs BTW). It is never a good idea to surrender a business market when it is still profitable. Market trends change all the time. If this trend toward SUVs changes, which it very well could. Ford doesn't have a leg to stand on. Trust me this is a short term gain long term loss for Ford (it's also what they did in the early 2000s and they almost went bankrupt). Now if the market was actually no longer profitable and Ford actually couldn't sell cars, abandoning the market is one thing but that is not what has happened here. They are prematurely abandoning the market and assuming that it will become unprofitable.
Well said and very true
 


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#14
I think:
1- There are plenty of competitors on the market, especially the Japanese cars, that are sold in the USA, that are good cars (Think Honda, Mazda, Toyota, Nissan).
Not all are fun cars, but they're reliable, and get you from point A to B.
Ford is giving up their share in the market, because very few people think of Ford, when buying a small car.

2- People in the market for small cars, are usually in the market for cheap cars.
That means, they don't care much if a car has been driven for 10-25k miles, if they can get a $6-12k discount on a fairly 'new' car.
Yes, there are those who prefer leasing a brand new car, and get rid of their maintenance fears; and there are those who buy up those offlease cars, because they're cheap, and still are good for at least 75k trouble free miles. And even after that, with some good maintenance, some people have been able to use them for another 100-150k miles (one guy actually bought an Elantra with 100k miles on for $8k, and put another 125k trouble free miles on it; talk about a good buy!)...
So Offlease is getting a lot of the purchases as well.

3- Second hand market. Craigslist, or even Maroones (Autonation), Carvana,... They all get the bulk of the share of 'budget conscious' (between Apostrophes, because Autonation is a ripoff if you're buying anything else but fairly new) buyers.

4- Change in Technology.
Can't deny that passenger cars have evolved so much in the last years,
There was a time when every new model was just a change of body color,
But the past 10 years, cars have seen improvements in:
- Engine efficiencies and performances: (fuel injection, plethora of sensor arrays, Turbos, Atkinson engines),
- Emissions: (even more sensors, MPG increases, engine fine tuning...)
- Design: (improve looks, both inside and out, add design elements, use newer materials),
- Safety: (airbags, crumple zones)
- Technologies 1: (radio, online capabilities, touch screens).
- Technologies 2 :(batteries, electric cars, hybrids, E85; are a whole different type of animal than the regular 4 stroke gasoline engine car). And Ford supposedly did horrible in their implementation of these (electric/hybrid Fusions cars).

All this research going into cars that make less profit than trucks that do without a lot of this research.

If you ask me, Ford is applying the right strategies to stay above water. They're at least for now, just taking a break. They might be back someday, with passenger cars, when there is a better chance to compete in the market.

If you ask me, the current difference between USA and Japan in car markets, is that Japan is making commuter vehicles, while USA is making performance vehicles.
And commuter vehicles is what most people need, performance vehicles is what most people want.

USA would win, if they would combine the two, and combine performance with economy.
However, even as we speak, Japan is gaining on that momentum, and making some excellent high performing vehicles, that are also fuel efficient (run comfortably for longer drives; and can be used as a daily commuter). Eg: see Hyundai Genesis, Honda Civic type R, Even Toyota is investing in upgrading and creating higher performing cars (86, Avalon); though their reliability is still with the older, dull performing cars...

So my 2ct is that, unless US car manufacturers will tip the scales in creating cars that are:
1- High performers
2- Comfortable and luxurious interior
3- Great on gas
4- Fun to drive
and
5- Affordable to buy,

We will see more and more foreign cars on our roads; and US car manufacturers would not be able to keep up with the competition.
 


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#16
Tons of Ford cars here in West MIchigan. I see more Ford Fusions on the road than any other vehicle by far in the Grand Rapids area. Overall though I would say there are at least as many cars on the road as there are trucks/suvs. I can kinda understand getting out of the entry car market. Maybe just restructure the Ford/Lincoln lineup with Ford doing trucks/suvs and performance vehicles while Lincoln does mid and full size cars. [dunno]
 


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America's dumbest company would be any number of Silicon Valley venture capital firms. But I agree, the discontinuation of all small and fuel efficient vehicles in America is a remarkably myopic strategy, especially because gas is already starting to creep up towards $4/gallon again.
Exactly my thoughts; the party will come to an end, and people will probably NOT want anything below 30 MPG.
 


Intuit

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#19
It's not all about sales numbers. Honda doesn't sell many motorcycles, boats, but when I go to https://www.honda.com/ they're still there. Ford is combating a problem with profit margin, not by looking at ways of maintaining the value of their new vehicles, (resale value of their older ones,) but instead by refocusing only on those that command the highest profits. That is one respectable way of doing it. Ford probably can't take all the blame there. Perhaps sales people need to be put on a shorter leash. But I suspect that there's no reason why their vehicles have to sell for 5-8k below MSRP when their competition can drive home the message of 'you get what you pay for' with their vastly better marketing depts and practices.

Perhaps Ford and GM can look to run advertisements against someone other than just eachother for once. I just watched a news report of Kia Sorento, literally blazing down the highway due to a virtually unheard of (in the media) recall on engine fires. If this were a GM or Ford vehicle, THE RECALL would've been headline news, she would've known about it, and had taken it in.

Tons of Ford cars here in West MIchigan. I see more Ford Fusions on the road than any other vehicle by far in the Grand Rapids area. Overall though I would say there are at least as many cars on the road as there are trucks/suvs. I can kinda understand getting out of the entry car market. Maybe just restructure the Ford/Lincoln lineup with Ford doing trucks/suvs and performance vehicles while Lincoln does mid and full size cars. [dunno]
When visiting Michigan, I was amazed at the number of domestic nameplates that filled the parking lot at.... Walmart. (was there meeting with another ST member)

Michigan might unfortunately be an anomaly. There also tends to be a higher ratio (though not as good as Michigan) of domestic nameplates out in the rural areas.

Visiting Mississippi down South I was surprised at the number of Nissan vehicles. By comparison we don't see too many around here.

Sales and trends do tend to be local, possibly regional it seems. I have to admit that around here, there are a fair number of larger vehicles. But I also know what I saw when the economy took a dump under Bush Junior and Republican congress... and the rinse and repeat cycle we're regulating for now. Hang on to your econoboxes because they'll be worth something again. https://www.cbsnews.com/news/ceo-pa...illion-in-2017-up-8-percent-from-year-before/
 


Jerickson88

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#20
Maybe instead of culling vehicles they need to focus on demographics surrounding dealerships? Maybe dealers are partially to blame.
 


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