Ford, The American Multinational Automaker, headquartered in Dearborn, Michigan, announced that it will phase out most of the cars it sells in North America. Ford reported that the only cars it will keep in the continent beyond their current generations are the world renowned coupe – Mustang, and an unannounced vehicle – Ford Active, scheduled to arrive in the market by 2019.
Ford’s proclamation that it will disengage most of its car models by 2020 is not quite as radical. The scenario in the continent has followed a diverse pattern for the organization altogether. This decision applies only to North America, while the calculus in the rest of the world is completely different.
In corporate America, If Ford wants to enhance its profit margin; the easiest way to do so is to stop making a huge number of cars. The automobile manufacturer remarked it now expects to achieve an eight percent global profit margin by 2020, two years sooner than planned. Ford boosted its five-year cost-cutting goal to $25.5 billion, from the previous intended projection of $14.4 billion.
Currently, Ford sells six sedans and coupes in North America: The Fiesta, Fusion, Focus, C-Max, Taurus and Mustang. This docket has multiple segments, from the Compact Fiesta to the mid-size Focus, hatchbacks C-Max and Fusion to the Full size Taurus. Ford’s Mustang stands solo as the only coupe.
Ford sees ninety percent of its North America portfolio in trucks, utilities and commercial vehicles. Its reduction in conventional cars was a long time coming, as North America consumers have increasingly turned to crossover segments, trucks and Sport Utility Vehicles (SUV’s).
Jim Farley, Ford’s head of global markets, says the firm is exploring new vehicles that would give consumers the space and adaptability of a Utility vehicle without a fuel economy “penalty”. “We will have a very diverse passenger car business. It just won’t be traditional silhouetted sedans that tend to be commoditized”, Farley said.