Published: Thu, April 26, 2018
Finance | By Gustavo Carr

Ford cuts auto offerings down to Mustang, Focus Active crossover

Ford cuts auto offerings down to Mustang, Focus Active crossover

Ford has stated that nearly nine out of every 10 vehicles it sells in 2020 will be a truck or SUV, so grab your Focuses, Fusions and Fiestas while you can, ye Ford faithful.

In a rather troubling press release, Ford announced that it will retire the Fusion, the C-MAX, the Taurus and the Fiesta on the North-American market by the 2020 model year.

Ford stock rose almost 3 percent in after-hours trading Wednesday to $11.40.

Read between the lines of last week's news about the Ford Fusion, and it becomes tough to see a post-2020 future for the auto in the U.S.It won't be made in Mexico anymore, Ford has told.

This news comes as part of Ford's "fitness" plan, outlined by CEO Jim Hackett a year ago, in which he said the Blue Oval would cut its operating costs by $14 billion by 2022.

Due to declining customer demand and profitability, Ford will shed all but the Mustang and a Focus compact crossover vehicle in the U.S., Canada and Mexico during the next two years, CEO Jim Hackett told analysts Wednesday on Ford's first-quarter earnings conference call. The company will still produce a range of SUVs and trucks, including the Escape, Explorer, Bronco, and F-150-the best-selling truck model in the US. We will have to make choices around how we disposition those businesses going forward.

The move is bad news for sedans, but good news for trucks and crossovers.

The all-new Bronco will be revealed next year
The all-new Bronco will be revealed next year

In other words? Passenger cars aren't making money, and crossovers/trucks are.

Ford will cut $5 billion from capital spending from 2019 to 2022, reducing it from $34 billion to $29 billion.

Ford plans to cut $11 billion in operating costs and $5 billion in capital expenditures between 2019 and 2022.

But the market in the USA has shifted to larger vehicles that consumers perceive as safer; Ford's decision to pare down their model offering to trucks and sports cars appears to be servicing the demand it sees directly ahead of it.

In the first quarter, net income rose $144 million to $1.74 billion, and revenue grew 7.4 percent to $42 billion.

"Everything will be on the table", Shanks said. Ford is choosing the "much higher-performing" [in terms of profitability] utilities and not "traditional-silhouette sedans that tend to be commoditized".

The company's loss in its Asia Pacific region was driven by slumping sales in China, where Ford has just begun to introduce new models.

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