Ford announced today that it will stop selling all but two of its cars in North America by 2020. According to the statement, the only new Ford cars in dealerships will be the Mustang and the Focus Active, which will not be released until 2019. The Fiesta, Taurus, Fusion and the regular Focus will be phased out of North America in the upcoming years.
Ford reported a $1.7 billion net income, a 9 percent increase. Ford president and CEO Jim Hackett released a statement recently talking about new measures the company will be taking.
“We are committed to taking the appropriate actions to drive profitable growth and maximize the returns of our business over the long term,” Hackett said. “Where we can raise the returns of underperforming parts of our business by making them more fit, we will. If appropriate returns are not on the horizon, we will shift that capital to where we can play and win.”
In a recent statement, Ford stated that by 2020 “almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. The company 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.”
This “white space” that Ford is hoping to explore seems to refer to vehicles that can’t be categorized into the typical categories. Ford has decided to move their focus from cars to utilities, which are more profitable. It has moved $7 billion of research funds from the cars sector into SUVs and trucks.
The new car, the Focus Active, is not yet announced but it appears to be a crossover. The statement also said that it will “combine the best attributes of cars and utilities, such as higher ride height, space and versatility.”
The decision to drop all but 2 of the cars from North America dealerships comes from reduced consumer demand and product profitability. North American consumers have a higher demand for crossovers, trucks and SUVs compared to sedans and small cars. Ford will try to meet their demand by just focusing on trucks and SUVs.