RIP: Fiesta, Focus, Fusion, and Taurus.
It was over two years ago when Ford made a dramatic announcement: aside from the Mustang, sales of traditional cars will be discontinued in North America. The Ford Fiesta, Focus, Fusion, and Taurus are all gone. All that's left are unsold examples on dealership lots. Since then, many have rightly questioned the Blue Oval's business strategy, especially since rival automakers like Toyota, Honda, and Hyundai have no intention of abandoning the sedan segment. However, Ford's crosstown rival, GM, is also moving away from traditional sedans. Why did Ford make this decision and why does it appear GM isn't too far behind?
Ford Authority recently asked Kumar Galhotra, President of Ford North America and VP of Ford Motor Company, why the automaker gave up on sedans.
"The key here is, not just for us, the sedan segment itself has been in decline for a very long time, and that decline has been accelerating over the last few years," Galhotra said. "Our industry is very resource-intensive - we have to create a particular product, and the factory to build it, and all the tooling and our suppliers - that can run into billions of dollars. The question then became, in that environment, of a finite amount of capital, where do we want to invest that capital? Do we want to invest it in a declining segment or do we want to invest it in a growing segment?"
Ford wisely opted to spend its resources in the growing segment of electric vehicles and SUVs.
The Ford Mustang Mach-E received thousands of early reservations, as did the reborn Bronco and first-ever Bronco Sport. So far, Ford's decision appears to be paying off. In addition, its truck lineup is also vital. The all-new Ford F-150 is about to go on sale and along with some Ranger packaging updates, the compact Maverick pickup truck is due sometime next year. Ford realizes it is and will continue to lose longtime sedan buyers with no interest in crossovers or trucks, but this is a price it's willing to pay.
The continued growth in the EV, truck and SUV segments (along with other future mobility technologies) cannot be overlooked and, more importantly, undervalued. The cost of playing catchup later if money isn't invested properly right now would be terribly high, both from a market position and financially.