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Ford minimizing auto lineup in the United States

27 April, 2018, 01:15 | Author: Sara Gill
  • Ford first-quarter earnings top estimates to drop slow-selling sedans

Now the Dearborn company is more aggressively phasing out its passenger cars as it focuses on trucks and electric vehicles.

Ford said eliminating most of the company's cars except for two models will allow the company to focus on their "winning portfolio" in the U.S., Canada and Mexico.

Just two years from now, a mere 10 percent of the vehicles rolling off Ford assembly lines and into North American showrooms will be sedans and sports cars like the Taurus or Mustang.

The automaker says it made $1.74 billion, or 43 cents per share, compared with $1.59 billion, or 40 cents per share a year ago.

Revenue at Ford increased 7%, to US$41.96bn from US$39.15bn. The 9% increase in quarterly profit can be nearly entirely attributed to a drop in the automaker's effective tax rate to 9% from 28.6%, Ford officials said.

Ford Motor Company shares were trading at $11.30 per share on Thursday morning, up $0.19 (+1.71%). Profits before taxes fell to $2.2 billion from $2.5 billion.

The latest planned reductions will come from areas including engineering, materials costs, marketing and sales.

Your Ford Taurus may be about to become a limited edition. "Where we can raise the returns of underperforming parts of our business by making them more fit, we will".


And, they were quick to remind me, not everyone wants a beefy pickup or SUV with interior room comparable to a NY studio apartment.

Additionally, Ford said it expects to put $5 billion less into capital expenditures from 2019 to 2022 than it once anticipated.

"Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America", Ford said. Exactly when these models will stop being sold in the market hasn't been announced.

It also wasn't clear if the move will impact Ford's Lincoln brand.

"Ford's announcement to pretty much get out of the auto business ... comes as no surprise". It is clearly saying any advantages the traditional sedan had (such as a lower center of gravity) are no longer enough to make up for a small- or medium-size crossover's greater space.

Dave Sullivan, manager of product analysis for AutoPacific, Inc., called the move bold but also not surprising. The company poured a lot of money into refreshing most of the vehicles in question since 2015, and with those expenses in the rear view mirror, Barra believes it has a competitive lineup that won't require a lot of money to update over the next few years.

"We are undergoing a profound transformation", Shanks said, "and are committed to taking decisive action".

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