It has made headlines that Ford will phase out sedans in North America, and will instead focus on building SUVs and larger trucks.
The decision to do so, announced during Ford’s Q1 earnings report, directly mirrors the reality of today’s consumers. With gas prices lower than they have been in year’s past, atop of improved mileage efficiency, consumers have begun to overlook sedans in favor of sleeker, more functional vehicles. I mean, your midsize sedan just can’t jump a pile of snow like a Yukon Denali can.
The CEO of Ford, Jim Hackett, stated that “By 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles,” continuing that “given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America.”
Say Goodbye To The Taurus and Fusion
Consumer Affairs states that this announcement can mean that the venerable Taurus, introduced in 1986, will eventually disappear from Ford’s line-up, and off the road forever, along with the famed Ford Fusion. Hackett also says that the multi-year transition will leave the iconic Mustang and a redesigned Focus crossover as Ford’s remaining cars.
The company said it 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.
New car sales data tells the story. In March, light truck sales surged 16 percent, posting a 9.5 percent increase for the first quarter. At the same time, car demand was down 8.9 percent in March and down 11 percent for the quarter, according to Autoweek.
Ford did not give a timetable for the transition, saying only that it would take place “over the next few years.” The move not only reflects a change in consumer taste, it could make the automaker more profitable since margins are higher on SUVs than sedans.
Wall Street applauded the move, sending Ford shares 2.5 percent higher in early Thursday trading.
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