Ford to stop making all passenger cars except the Mustang
The sedan is becoming less and less relevant to American motorists.
If you’re looking to buy a car from Ford, you’ll soon have only one choice: a Mustang.
Faced with plunging demand and declining profits from its passenger car lineup, Ford will shift its resources to the booming side of the market: pickups, SUVs and crossover-utility vehicles, said CEO Jim Hackett late on Wednesday.
By 2022, Ford will eliminate such familiar nameplates as the full-size Taurus, midsize Fusion and subcompact Fiesta. It will continue producing the Mustang, the most popular vehicle in the sports coupe segment that has retained a sort of cult status.
“We’re going to feed the healthy parts of our business and deal decisively with the areas that destroy value,” Hackett said during a conference call. “We’re starting to understand what we need to do and making clear decisions there.”
AMERICA WANTS UTILITY VEHICLES
The Ford Focus will only be offered in the U.S. market as a crossover — but will be built in China. That frees up the Wayne, Michigan, assembly plant to start rolling out two new light truck models: the Ranger pickup and the Bronco SUV — both reviving nameplates that Ford had dropped in years past. All told, the automaker plans to add five new SUVs over the next two years, as well as the midsize Ranger pickup.
The rebirth of the Ranger underscores the surge in light truck sales. The compact pickup segment seemed destined to vanish earlier in the decade but has come roaring back with all-new or updated offerings from not only Ford but General Motors, Honda and Toyota. Even Hyundai is working on a new model, the Santa Cruz.
But the real surge is on the utility vehicle side where traditional, truck-based sport utility vehicles and newer crossover-utility vehicles like the popular Ford Escape now account for half of the overall American new vehicle market. Add pickups, vans and other light trucks and that jumps to 65 percent, with sedans and coupes continuing to lose momentum.
“This might be the boldest move Ford has made in many years,” analyst Dave Sullivan, of AutoPacific, Inc., told NBC News. “This is not a surprise given the direction that consumer preferences have moved.”
But it’s no slam dunk, Sullivan cautioned, considering Ford is by no means the only automaker trimming back on its passenger car spending. “The crossover market will be even more crowded” in the coming years.
“This might be the boldest move Ford has made in many years."
On Thursday morning, GM Chief Financial Officer Chuck Stevens told reporters that the company will “make significantly lower investments on a go-forward basis” in its passenger car lineup. “We are focusing on the right mix of products,” added CEO Mary Barra, during a conference call with analysts and media to discuss GM’s first-quarter earnings.
The biggest of the domestic manufacturers recently trimmed production at the Lordstown, Ohio, plant producing its once-popular Chevrolet Cruze model, even as it announced the addition of a shift at the Spring Hill factory in Tennessee that makes its hot-selling GMC Acadia and Cadillac XT5 crossovers. GM’s Cadillac brand alone will add at least three more utility vehicles, including the XT4 just unveiled at the New York Auto Show. But the Chevrolet brand, for one, is dropping its Sonic hatchback and reviewing the fate of a number of passenger car models, such as its big Impala.
Across town, Fiat Chrysler Automobiles has already abandoned its Dodge Dart and Chrysler 200 sedans. The Euro-American automaker retains just three passenger car models: the Chrysler 300, a full-size sedan, and the Dodge Challenger and Charger muscle cars that compete with the Ford Mustang. All three are produced in Canada. FCA builds no passenger cars in the U.S., converting several factories to build new pickups and SUVs over the last several years.
The surge in SUV and pickup demand has hit import brands particularly hard, especially Japanese makers who long have dominated in sedan and coupe sales. Toyota has had to increase imports of its RAV4 model from Japan to keep up. Its high-line Lexus brand has launched a wave of new crossover offerings over the last several years, including the small UX, the compact NX and a stretched, three-row version of its segment-leading RX.
“We’re acutely aware there’s a robust SUV market in the U.S., and Lexus is playing a part in that,” said Cooper Ericksen, the brand’s U.S. marketing chief. “We understand the importance of SUVs, but we also understand the importance of great sedans."
WILL THE INDUSTRY SHIFT BACK?
Across the industry, automakers are expected to continue trimming back on their sedans, coupes and other passenger car models, shifting more and more resources to their light trucks. But how far that move will go remains a matter of debate.
Among other things, some manufacturers say they’re hedging bets in case the market shifts again, especially in the event of a major surge in energy prices. But today’s light trucks are more fuel efficient than ever. The new diesel version of the Ford F-150 pickup is expected to get at least 30 mpg. And new hybrids and even all-electric SUVs could take fuel prices out of the equation entirely.
The sedan is far from dead — but it is becoming less and less relevant to American motorists.