Ford phasing out sedans in US market
Automotive giant Ford is shaking up its US lineup by phasing out traditional sedans and hatchbacks such as the Fiesta, Taurus, and Fusion.
On Wednesday the automaker confirmed rumors that it will phase out traditional sedan vehicles in North America over the next few years and shift focus on SUVs and trucks.
Ford said it will not invest in next generations of traditional Ford sedans for North America because of declining consumer demand and product profitability.
The company said in its Q1 results that the Ford car portfolio in North America will transition to two vehicles; the best-selling Mustang and the all-new Focus Active crossover coming out next year.
Karl Brauer, an analyst with Kelley Blue Book, told MarketWatch:
“The Mustang survived and essentially represents the role cars will play in the future—iconic performance vehicles. The rest of the market will be served by trucks and SUVs,”
Brauer added, “The price of gas has risen but remains relatively low compared to historic highs.”
“More importantly, the difference in fuel efficiency between a sedan and an SUV has contracted over the past 10 years,”
Lincoln sedans, including the Continental, will not be phased out.
By 2020, the company expects 90 percent of its Ford portfolio in North America to consist of trucks, utilities and commercial vehicles.
No US jobs will be lost as a result of the plan, Ford said.
In a separate announcement, the US automaker said it will add hybrid motors to its high-volume vehicles, such as the F-150 truck, Explorer and Escape SUVs, and the Mustang.
“We are committed to taking the appropriate actions to drive profitable growth and maximize the returns of our business over the long term,” said Jim Hackett, Ford president and CEO.
“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.”