"killing off several sedans, including the Fusion"

[ElectricFan69]

I don't understand why everyone is playing the "gas prices will go up and change everything" again. It's true gas prices went up in the past, then they came back down. There's no fundamental reason they will go up and stay up for any extended period of time. Betting your company's future on a potential gas spike is really not a long term strategy. And besides, Ford is still engineering, developing and building small cars and sedans for the rest of the world, so they could always bring them back if trends change.

 

Don't get caught up in sales numbers, Ford (and any well run business) doesn't care about sales, they care about margins. The margin in the cars is so small that you could sell 500,000 Fusions and still not make as much money as the 10,000 Navigators they plan to sell. So why tie up all that production capacity and overhead for poor returns?

As long as they can sell the 10K gas pigs, that works. With the next "black swan" that spikes gas prices to $7 and precipitates a recession - not so much

[Texasota]

As long as they can sell the 10K gas pigs, that works. With the next "black swan" that spikes gas prices to $7 and precipitates a recession - not so much

Higher gas prices in the future will occur. When there is a demand increase for smaller cars auto companies will change quickly to meet that demand. They have always done this in the past and will do it again.

[Fission]

I think there is a good possibility gas prices will not stay high for very long, once they inevitably spike for some future reason. The US is in the amazing position of having vast reserves of oil just waiting to be pumped when prices rise, thanks to fracking. Moderate prices could last for decades. If that is the future, Ford is making a good business decision.

 

I personally am bummed about their decision, but I think the strategy makes sense.

[md13ffhguy]

Think Camry and Accord will go away? Will Mercedes and BMW stop selling sedans? I doubt it.

[ptjones]

Fuel economy keeps going up so demand isn't going up as fast as it could.

 

Paul

[sschnath]

According to this Wall Street Journal article on MSN by Dan Neil, "Vehicles classified as light trucks are already subject to lower standards than cars. And for CAFE purposes a crossover with all-wheel-drive qualifies as a light truck."

 

By replacing higher MPG cars with AWD crossovers it appears Ford is actually better able to meet their CAFE requirements. Go figure.

 

Reminds me of the tax incentives businesses received for buying SUVs over a certain GVW while at the same time, other parts of the government were trying to implement stricter MPG standards.

 

I don't know if this tax break still exists but it is typical politician idiocy. Contradicting policies resulting in a zero sum outcome for society, though not zero sum for the manufacturers because it certainly helped to artificially fuel (no pun intended) the SUV craze which brings us to Ford's decision today.

Edited May 4, 2018 by sschnath

[Texasota]

I don't know if this tax break still exists but it is typical politician idiocy. Contradicting policies resulting in a zero sum outcome for society, though not zero sum for the manufacturers because it certainly helped to artificially fuel (no pun intended) the SUV craze which brings us to Ford's decision today.

Government policies regarding MPG mandates have very little affect on the SUV/CUV craze (in my opinion). They are more flexible, can haul more (e.g. try hauling a chest of drawers in a sedan), can tow more, have much better visibility, have better off road capabilities, are better in snow, and have far easier entry/exit. These are a few of the reasons they are popular. Consumers love them because they have many advantages over a sedan.

 

If Waldo is right about future SUV/CUVs having comparable MPG as sedans, then the advantages of sedans will be further reduced.

[Cobra348]

If Waldo is right about future SUV/CUVs having comparable MPG as sedans, then the advantages of sedans will be further reduced.

However the current government has mentioned a few times about relaxing the mandated standards. If that happens then comparable MPG is not gonna happen. I can't see manufacturers taking the high road and doing it anyway.

[murphy]

There is backlash against the EPA.

 

https://insideclimatenews.org/news/01052018/states-lawsuit-epa-vehicle-emissions-standards-fuel-efficiency-rollback-pruitt-climate-change

[Texasota]

You can get the same utility in an Escape as a Fusion for the same price and when the next gen comes out in a hybrid, it will get roughly the same fuel economy.

 

Waldo, you teased us here... What kinds of things are we likely to see in the next generation? Will Ford change the next generation plans if the EPA mandates are relaxed?

Edited May 7, 2018 by Texasota

[ptjones]

I don't see how they can change plans when they are working 3 -5 years ahead and California isn't lowering their standards. It's sad that they won't eliminate CO2 requirements to solve World Hunger. ;(

 

Paul

[ElectricFan69]

Higher gas prices in the future will occur. When there is a demand increase for smaller cars auto companies will change quickly to meet that demand. They have always done this in the past and will do it again.

 

The last one drove GM and Chrysler through bankruptcy. Ford avoided it by the slimmest of margins, leaving themselves heavily leveraged and vulnerable to future downturns.

[Texasota]

 

The last one drove GM and Chrysler through bankruptcy. Ford avoided it by the slimmest of margins, leaving themselves heavily leveraged and vulnerable to future downturns.

Those bankruptcies were largely caused by the so called "great recession". Higher gas prices played a role but it was relatively small compared to the global financial meltdown that occurred during the 2008 - 2010 time frame.

Edited May 13, 2018 by Texasota

[Waldo]

Yep, sales dropping from 17mil/year to 10mil/year was a much bigger deal than higher gas prices.

[MXGOLF]

It's all about the bottom line and money. The world revolves around money. Kind of sad for us but that will make all our Fusions more valuable right! They will be collector items. I don't want or need a SUV!

[talmy]

Until a few weeks ago we had a 2007 Toyota Camry Hybrid and a 2014 Ford Fusion Hybrid. Being older (I'm 69 and my wife is 73) we want cars with as many safety driving assists as possible as well as easy entry/exit and a comfortable ride. The 2014 Fusion was supposed to have all available assists available at the time but didn't due to various mistakes in ordering. So I was considering a replacement.

 

Then the news about Ford dropping sedans came out. The 2018 Titanium would have been a lovely upgrade, and the 2019 would be as well with its cruise control that goes down to stop/start. But, frankly, this news looks like a killer for the cars holding their value.

 

So we ended up replacing the 11 year old Camry with a RAV4 Hybrid, going the SUV route. A bit less gas mileage than the Fusion, but it has all the safety assists and then some, and the easy in/out of an SUV. Cost was 10% higher than the old Camry, so actually less considering inflation, and was 10% less than the Fusion. Insurance is actually less expensive than either, being $200/year less than the Camry it replaced.

 

Keeping the Fusion as our second car. The real shame is we much prefer the Ford dealer service (we've been there for 32 years!) over the Toyota service, so in that respect we would have been happier keeping with Ford.

[talmy]

Until a few weeks ago we had a 2007 Toyota Camry Hybrid and a 2014 Ford Fusion Hybrid. Being older (I'm 69 and my wife is 73) we want cars with as many safety driving assists as possible as well as easy entry/exit and a comfortable ride. The 2014 Fusion was supposed to have all available assists available at the time but didn't due to various mistakes in ordering. So I was considering a replacement.

 

Then the news about Ford dropping sedans came out. The 2018 Titanium would have been a lovely upgrade, and the 2019 would be as well with its cruise control that goes down to stop/start. But, frankly, this news looks like a killer for the cars holding their value. (They won't become collectors items, at least not in my lifetime!)

 

So we ended up replacing the 11 year old Camry with a RAV4 Hybrid, going the SUV route. A bit less gas mileage than the Fusion, but it has all the safety assists and then some, and the easy in/out of an SUV. Cost was 10% higher than the old Camry, so actually less considering inflation, and was 10% less than the Fusion. Insurance is actually less expensive than either, being $200/year less than the Camry it replaced.

 

Keeping the Fusion as our second car. The real shame is we much prefer the Ford dealer service (we've been there for 32 years!) over the Toyota service, so in that respect we would have been happier keeping with Ford.

[Cobra348]

Until a few weeks ago we had a 2007 Toyota Camry Hybrid and a 2014 Ford Fusion Hybrid. Being older (I'm 69 and my wife is 73) we want cars with as many safety driving assists as possible as well as easy entry/exit and a comfortable ride. The 2014 Fusion was supposed to have all available assists available at the time but didn't due to various mistakes in ordering. So I was considering a replacement.

 

Then the news about Ford dropping sedans came out. The 2018 Titanium would have been a lovely upgrade, and the 2019 would be as well with its cruise control that goes down to stop/start. But, frankly, this news looks like a killer for the cars holding their value.

 

So we ended up replacing the 11 year old Camry with a RAV4 Hybrid, going the SUV route. A bit less gas mileage than the Fusion, but it has all the safety assists and then some, and the easy in/out of an SUV. Cost was 10% higher than the old Camry, so actually less considering inflation, and was 10% less than the Fusion. Insurance is actually less expensive than either, being $200/year less than the Camry it replaced.

 

Keeping the Fusion as our second car. The real shame is we much prefer the Ford dealer service (we've been there for 32 years!) over the Toyota service, so in that respect we would have been happier keeping with Ford.

My '17 has the stop/start stuff but I wanna say you should keep your foot over the brake. I've had it creep up at a light even after stopping ... to an uncomfortable distance from the car up front. Might want to check Carmax or something for 2017 models - one owner, etc.

Edited May 27, 2018 by Cobra348

[murphy]

What do you have the following interval set to?

[Cobra348]

My interval is 2 seconds and shifts to 4 when over 55 for prolonged time. Car does stop fine, but it acts as if the brakes are just slightly backed off of so it can creep. I've gotten in the habit of letting it stop by itself then using my foot on the brake. <shrug>

[murphy]

Unfortunately my 2013 does not have that capability. When it gets down to a low speed it issues a "ding" which is my notice to take over to prevent a collision with the car in front.

[mwr]

This discussion of stop/start makes me happy I decided against those high-tech "assist" options when I got my 2015 FFH. I decided against them because I was afraid they were too new to be properly sorted out.

[Waldo]

Last year I drove a Navigator across Mexico City in rush hour without touching the pedals. It's well sorted out.

[Texasota]

It may be well sorted out and great technology but only when it works. This forum is full of posts where various sensors have failed or give false warnings in a random and unpredictable manner. Making it worse, the techs at dealerships are often at a loss when it comes to reproducing, diagnosing and servicing these problems. Typical body repair shops are even less equipped to deal with the myriad of high tech sensors and getting them all working again after major body repairs.

[stlouisgeorge]

Interesting notes from the banker world (credit news)

 

Percent of Ford Sales as "passenger cars:

• 26.21% (2014)
• 16.05% (early 2018)
• 16.05% (mid 2018)

 

Best Selling Ford Vehicles:

• 24.5% (Ford F-150 pickup truck)
• 11.9% (Ford Explorer SUV)
• 10.4% (Ford F-250 truck)

For the first time, a passenger vehicle is not among the top 5 models.

 

So A "F-150" is a "pickup". But a F-250 is a "truck". Begs question what is a "pick-em-up truck"? What is a F-350? ("Car cruncher")?

 

 

If you find credit rating interesting (I do), this was also interesting info on Ford Motor Credit.

 

The deal's concentration of “super prime” borrowers with FICO scores greater than 749 is 37.4%, which is consistent with REV transactions and amortizing FCAOT transactions. Borrowers with FICO scores less than 650 is 14.4%, which is at the bottom of range compared to prior REV transactions.

Edited July 14, 2018 by stlouisgeorge