Political Protests Hurting Ford's Police Vehicle Sales

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Police vehicles are big business at Ford, meaning police budget cuts are felt.

Nearly three months after the killing of George Floyd by police in Minneapolis, Minnesota, demonstrations against police brutality continue across the United States, with "Defund the Police" becoming a common refrain. Such calls for cuts to police budgets have seen limited success, with some municipalities reducing funding and shifting some responsibilities - like school safety and responding to calls about the homeless - away from the police.

One such city to greenlight a reduction in police spending is New York, and the move is being felt at Ford Motor Company, where police vehicles are a big business. While Ford isn't the sole manufacturer of police pursuit vehicles in the US, it is by far the largest, supplying about two thirds of the country's pursuit-rated sedans and SUVs.

Ford
Ford
Ford

New York agreed to cut the NYPD's annual budget by $1 billion, with $5 million in savings from deferring fleet purchases alone, according to Bloomberg. In fiscal year 2020, the NYPD bought just 534 vehicles, and only 29 of those were of the higher-margin utility vehicle variety. That's important because Ford's Explorer-based Police Interceptor Utility sells for just shy of $50,000, on average, where the average police pursuit sedan brings in less than $30,000.

Here's something potentially even more alarming: Ford last year discontinued its full-size Taurus sedan, and with it, the Ford Police Interceptor Sedan. With the Fusion now also out of production, Ford has no vehicles to offer in the less-expensive police pursuit sedan space.

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Ford
Ford
Ford

Granted, it isn't just anti-police-brutality demonstrations driving fewer pursuit vehicle purchases by agencies like the NYPD. The global pandemic has also played a rather large role, cutting into tax revenues and forcing countless municipalities to rein in expenses however they can manage. And there's evidence that at least within some police departments, fleet spending was on the decline even before Covid-19 hit; Bloomberg's data show that fleet purchases by the LAPD were far lower in fiscal year 2019 than 2018.

Yet regardless of the root cause, Ford is poised to miss out on a lot of sales for its Police Interceptor Utility, which has largely dominated the market over the past few years, with no more budget-friendly option to take up the slack. The era of the Dodge Charger Police Pursuit Vehicle might be upon us.

Ford
Ford
Ford
Source Credits: Bloomberg

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