As the amount of subprime auto loans keep rise while gas prices remain stagnant, consumers have once again gained a fond appetite for the SUV. Except this time, it's not just Americans snapping up Chevy Tahoes. It's the whole world that seems to be hooked on the party, and it's putting a severe damper on sales of small practical cars from all automakers. The first canary in the coal mine came from General Motors, which announced it was canning some of its more sluggish sellers.
Now, it's time for canary number two to fall. In a report detailing how Ford's new CEO Jim Hackett plans to reform the automaker after spending a period evaluating where costs could be cut, Automotive News learned that it's once again the usual suspects that are poised for the chopping block. That mainly means sedans like the Fiesta, Taurus, and C-Max Hybrid. Rather than bringing down the guillotine immediately, Ford will likely let each of these models run out the remainder of their production cycles before phasing them out entirely. As safer and loftier SUVs become top picks while cramped sedans and hatchbacks take a backseat, it no longer pays to invest in reinventing a model like the Taurus.
The Fiesta, Taurus, and C-Max Hybrid's death knell hasn't been sounded yet, but Hackett will brief investors on the matter come October 3rd. Cutting expenditures on low profit margin vehicles-especially those that aren't selling well-is the first way to bring down unneeded costs but Hackett will also have to determine Ford's long term strategy for survival in a climate that's poised to go electric and autonomous. With Ford announcing plans to rebrand itself as purveyor of transportation rather than just another car manufacturer under previous CEO Mark Fields' tenure, it remains to see whether or not Hackett will keep these changes, which include a hybrid Mustang, a self-driving car to be used by rideshare companies, and an all-electric SUV.
It'll be a sad day if the Fiesta, a European favorite, is canned after years of service. But whatever happens, please Ford, don't touch our precious Focus'.
