Ford Motor Company has no intent of entirely giving up on cars in the North American market, even as demand slowly wanes and the last few small-car models produced in the US are shifted south of the border to Mexico.
However, according to Automotive News, the automaker isn’t about to expend effort trying to artificially reinvigorate the segment. “You can only go so far in terms of trying to entice customers to purchase those kinds of products,” said Ford CEO Mark Fields in an interview. “We’ll focus on some of the segments where customers are migrating towards, whether it’s SUVs or pickup trucks, and we’re doing nicely there.”
The increased share taken up by SUVs in the market – up to 32 percent this year from 22 percent a decade ago – actually works in Ford’s favor; Morgan Stanley analyst Adam Jonas estimated margins for SUVs and crossovers to be around 20 percent or greater in the first half of this year, versus 12 percent for cars. And as the Ford Focus and C-MAX depart from the Michigan Assembly Plant, it’s expected that they will be replaced by a new Ford Ranger pickup and Bronco SUV – two vehicles almost guaranteed to bring in greater profits.
“At the end of the day, we have to make sure that as a business we are providing compelling products for customers at the right value that provide a good return for the company, so we can then reinvest in the products, in the people, in the facilities,” Fields said. “With these exciting products that we’re bringing in, it’s actually a net win for the UAW.”
The whole shift in focus away from cars and toward SUVs is a reversal of what happened in 2008, when Ford launched a new “small-car offensive” in anticipation of a shift in consumer focus toward more fuel-efficient vehicles.
“You never know where consumer demand is going to go,” said the Ford CEO. “We get questions of ‘Oh, why don’t you just get out of the car business?’ It’s important that we have a full lineup of vehicles, because you never know what’s going to happen with the economy with regulations, with customer preferences, and we want to be there for customers wherever they go. We’ll keep our car lineup very fresh.”