Ford shrinks car lineup to grow profit
Taurus, Fiesta and Fusion models are set to be phased out in North America
Say goodbye to the Ford Taurus. The family-friendly sedan — which has graced American roadways since the mid 1980s — is being phased out in North America alongside the Fiesta subcompact, Fusion midsize sedan, Taurus large sedan and the C-Max van, according to Ford’s quarterly earnings statement.
Ford said eliminating most of the company’s cars except for two models will allow the company to focus on their “winning portfolio” in the U.S., Canada and Mexico. The Detroit automaker plans to keep the Ford Mustang sports car and a new Focus crossover that the company plans to release next year.
The changes will also allow the company to devote more resources to SUVs and trucks, vehicles that have exploded in popularity as consumers continue to lose interest in passenger cars, which no longer have a monopoly on good gas mileage. Ford also plans to bring 16 battery-electric vehicles to market by 2022.
The company’s latest cuts will not affect Lincoln sedans, including the Continental.
“We will refresh our entire lineup of traditional crossovers and SUVs that everyone knows, like Explorer and Escape,” said Jim Farley, Ford’s president of global markets, according to USA Today. “And then we’re going to be introducing and taking capital and redeploying it for also new silhouettes, products that give the customers the utility benefits without the penalty of the fuel economy.”
For more than a century, the giant American automaker has been associated with cars. Initially, those cars were built by hand and later were produced on the world’s first moving assembly line, an advance that allows the company to mass produce their vehicles, according to History. com.
Fast-forward 100 years and the company is moving in a new direction. For some analysts, the move was hailed as decisive and necessary.
“The passenger car rationalization plan is just the sort of bold and decisive action we believe investors have been waiting for,” Ryan Brinkman, an auto analyst at JPMorgan Chase & Co. wrote in a report Thursday, according to Bloomberg. “It is indicative of a management team for whom there are no sacred cows and which seems increasingly likely to pull other such levers to aggressively improve earnings and shareholder value.”
Company officials said the shift was based on declining demand and profitability, but Ford reported $1.7 billion in profit for the first quarter in 2018 — a 9 percent increase compared to the same period last year.
Fiesta and Taurus could be eliminated from Ford’s offerings as early as next year, but the Fusion could remain in the company’s lineup for several more years, Ford said. The company has already sold 43,176 Fusion Sedans and 35,046 Ford Focus in 2018. Meanwhile, the company has sold 19,164 Mustangs this year.