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Ford steers away from sedans

Monday, May 21, 2018 - 07:00
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In April, Ford dropped a bombshell in its quarterly earnings report — the company planned to discontinue almost its entire North American line-up of cars, retiring the Fusion, the C-MAX, Taurus and Fiesta by 2020. The Focus Active will be sold in the U.S. (but not Canada). Only the venerable Mustang will remain in a portfolio that will largely encompass trucks, SUVs, and crossovers. The Lincoln Continental will remain in production through its’ current lifecycle, but it’s unclear if it will be updated.

According to the company’s earnings announcement: “Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, 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. 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.”

By 2020, the company says that 90 percent of of its portfolio within North America will be trucks, utilities and commercial vehicles. Other automakers are following suit, with GM announcing it would cease production of the Chevy Sonic and the Chevy Impala over the next few years.

The announcement rattled Ford fans, but shouldn’t have too big of an impact on the collision repair space, including shops that are part of the Ford National Body Shop program. Even with those models ceasing production in 2020, there will be millions of Ford cars on the road for decades. Ford’s newest certification programs are focused on the F-150 (which isn’t going anywhere any time soon) and aluminum alloy repairs.

“In the long run we’ll be fixing more vehicles from other brands,” says Darrell Amberson, director of operations at LaMettry’s Collision and the immediate past chairman at the Automotive Service Association (ASA). “We’ll still be seeing those vehicles for another 15 years or so”

The shift in the vehicle mix is a response to a significant slump in Ford’s profits. The company hopes that by doubling down on its best-selling vehicles (like the F-Series) and dropping unprofitable lines, it can halt those losses. At the same time, the company is making new investments in hybrid and electric technology, planning new EV and hybrid versions of some of its most popular vehicles.

According to management, the move will capitalize on Ford’s sales strengths — its F-Series trucks outsell pretty much everything else in the U.S. “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.”

More hybrids, EVs on the way

While the loss of the sedans may not register with auto body shops, other changes may have some far-reaching implications.

That’s because the shift away from sedans is only part of the company’s fleet realignment. It will replace more than 75 percent of its current product portfolio by 2020. In addition to four new trucks and SUVs (and a new Bronco), the company plans an electric SUV in 2020, a hybrid version of the F-150, and a hybrid version of the Mustang.

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