Ford’s decision to eliminate passenger cars and concentrate on pickups and SUVs is paying off (F) – Finance

  • ford sent US sales growth in August Even when the common market is smoothed or reduced.
  • ford pickup trucks and SUVs have been successful.
  • Ford made a strategic decision for everyone, except to exclude cars from its portfolio in the coming years.

Ford reported August sales in the US on Tuesday, and although the market is weakening compared to 2017, the car maker's performance grew by about 4% compared to last year.

The story was about pickups and SUVs, confirming the decision that Ford as part of the CEO Jim Hackett made earlier this year the reduction of his future proposals for passenger cars in the US for almost one vehicle: the familiar Mustang.

Hackett's goal: to improve Ford's competitiveness and give Wall Street the reasons to worry about the stock of the automaker that lags behind its peers.

In a statement, Mark Lanev, Ford's vice president of marketing, sales and services in the US, quoted a 16-month growth in the F-Series pickup line as well as a 21% improvement in off-road vehicle sales, as August says.

"The sales of our entire new Expedition have grown by 95 percent," he added. "Right now the most popular car in America is our brand-new Lincoln Navigator, in which sales have grown more than 100 percent in August."

Strategic transition from cars


The new Lincoln Navigator.
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The new Lincoln Navigator.

(Hollis Johnson / Business Insider)

In an interview with Business Insider, LaNeve commented on Ford's strategic retreat from cars, which for decades has been at the heart of the US market, but has been moved over the past few years, as new sales reports were established.

"We have been watching tendencies for a long time," said Laneva. "But it accelerated in 2018 during 2016 and 2017".

He pointed out that Ford is beginning to realize that its advantages depart from cars whose future was widely discussed in the industry against the background of consumer buying models that suggest that the structural shift is continuing and that Americans will never be able to reconsider the four-door sedan.

"We are focusing our marketing resources," said LaNeve. "We do not spend money on advertising cars."

Earlier Ford was in a similar position. Before the financial crisis, it was easy to think of the company as a producer of mustangs and pickup trucks. Former CEO Alan Mullali sought to put into operation more fuel-efficient cars, but for several years consumers voted against these products with purses.

Back to the future – but a different future


Mustang.
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Mustang.

(Ford)

"It's back in the future for Ford," said Autotrader analyst Michelle Krebs in an e-mail. "Ford returns mostly to the freight company. selling performance has demonstrated its strength in trucks. "

However, LaNeve noted that Ford's new future is different from his old one. Buyers no longer need to compromise on buying an SUV or pickup truck, as it was in the past, when these cars delivered fuel economy savings compared to sedans. Technological advancement significantly improved the efficiency of the engine, putting many SUVs and crossovers on par with their assistants to stabilize the sedan.

"This is a change of generations," Laneve said, adding that passenger cars do not return. He remembered his time in Cadillac in the early 1980s, when the entire luxury market in the US consisted of large sedans and two-door coupe. "During my career, the whole market has changed."

And the previous complaint about Ford also changed.

"We are probably a truck and a Mustang company," he said. But he said it with pride – and not forgetting that Ford also aggressively conducts the electrification of their cars, as well as autonomous mobility.

This certainly helps the Ford pickups and SUVs to be highly profitable, financing the potentially costly restructuring described by Hackett.

"You have to choose the places where you want to compete," Laneva said. "As the market shrinks, demand is less, and the remaining demand is less profitable."

Ford also has some secret weapons outside of cars: commercial vehicles. His transit van in August increased by 25%.

"Commercial number one is more than retail trucks," said LaNeve. "Our team really knows this business."

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