Ford to Stop Selling Sedans in North America by 2020

Ford Motor rises on 1Q earnings beat, planned exit from sedan sales in North America

Ford Motor rises on 1Q earnings beat, planned exit from sedan sales in North America

While Ford's announcement provided a little bit of an initial jolt, both Haldeman and Klepeiss said they were not overly surprised by the company's decision because of how consumer preferences have changed. The fact that people are buying more SUVs to the detriment of cars is not exactly news, so we won't be too surprised if other automakers will go down the same road in the years to come.

The company that put Americans in cars affirmed Wednesday that those vehicles are going the way of the Model T and it will focus ever more on trucks and SUVs.

Ford sees 90 percent of its portfolio in North America in trucks, utility and commercial vehicles.

"We have looked at every single part of the business", Shanks said. "We aren't just exploring partnerships; we've now done them".

It's the culmination of a long decline in ordinary vehicle sales for Ford around the world, as "Premium" brands deliver cars to tempt the traditional saloon buyer, and SUVs knock saloons and hatchbacks way down the wish list for buyers too. That includes a 10 per cent pretax margin in North America.

And at Keller Ford, "our current mix right now of sales are about 75 percent trucks, SUVs and crossovers, and 25 percent cars", Keller said. And Japanese automakers also are likely to welcome less competition for some of their best-sellers, including the Toyota Camry and Honda Civic. Yahoo Finance put the average estimate of analysts at US$0.41 a share. This year, we're looking at 67 percent.

The 9% increase in quarterly profit can be nearly entirely attributed to a drop in the automaker's effective tax rate to 9% from 28.6%, Ford officials said. "Here in the USA, it certainly makes sense".

Ford says no American jobs will be lost as a result of the plan. "We can make different investments, we can partner, we can exit products, markets - and we will do that".

Ford's revenue rose 7 per cent year over year, and net income was higher at $1.7 billion, up 9 per cent year over year, more than explained by a lower tax rate. The automaker has been under pressure from investors to improve its product lineup and lift its profit margins. A few days ago, The New York Times reported that Ford was losing money on all of its small cars and sedans.

Ford will also continue to manufacture the Mustang muscle vehicle, and a new Ford Focus hatchback. It signals the end of the Fusion, Taurus, Focus, Fiesta and their RS and ST variants. Ford didn't share any new details about its strategy for Lincoln, but the Continental and MKZ-luxury models that share platforms with the outgoing Fords-also may be in danger of elimination.

Ford CEO Jim Hackett said the company is accelerating is cost-cutting measure and expanding their scope. Electric cars and plug-ins still represent only about 1% of the United States market. We, though, didn't expect Ford to implement the changes so quickly. By 2020, the company announced March 15, it will replace three-quarters of its lineup and add four new trucks and SUVs.

Hackett, 63, sought to assuage those concerns by promising "urgent" action. The hand-wringing maybe that has been around in our business is gone. "We're starting to understand what we need to do and are making clear decisions".

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