WHAT’S BEING CLAIMED:
- Ford announces that it will no longer produce sedans for the North American market.
- The multinational automaker said it will focus more on building trucks and SUVs.
- The multinational automaker’s announcement only reflects car buyers prefer more functional utility vehicles.
Detroit-based Ford announced that it will not continue manufacturing sedans during its first-quarter earnings report. This only proves how consumers are now favoring the SUVs because of its practicality, improved mileage efficiency, and relatively low gas prices.
“By 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America,” Ford CEO Jim Hackett said in an issued statement.
Fewer people are buying and resort more to ridesharing. And when they eventually buy, they opt for larger vehicles like SUVs. Ford announced that it will focus on models that have the best of both, with “higher ride height, space, and versatility.”
Taurus, introduced in 1986 and was once America’s best-selling car, will disappear from the automaker’s line-up, along with the Ford Fusion. The transition will just leave the iconic Mustang and a redesigned Focus crossover as Ford’s remaining cars, according to Hackett.
The company will stop production of the Focus for North America this year, the Taurus in March 2019 and Fiesta in May 2019. The car manufacturer said it will explore new “white space” vehicle silhouettes that combine the best attributes of cars and utilities.
Car sales date in March shows a 16 percent increase in light truck sales, recording a 9.5 percent rise for the first quarter. According to Autoweek, Demand for cars dropped 8.9 percent in March and down 11 percent for the quarter.
Since margins are higher on SUVs than sedans, the transition can be a profitable strategy for Ford.
Wall Street applauded the move, sending Ford shares 2.5 percent higher in early Thursday trading, according to Consumer Affairs.
Source: Consumer Affairs