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focus05

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  1. Ford has suffered from very poor product planning - not just rollout schedule, but actually reading the needs of the market; their products are often too limited for broad appeal (Focus with its backseat). Their C-segment CUV is average. Their midsize car is underwhelming and standing still as competitors accelerate. Their C-segment car is not quite right for the market. They have no real B-segment CUV yet (EcoSport is a placeholder). And then, it's all behind schedule. Their initial Ecoboost boost is also fading as competitors roll out with better GTDI engines. The 1.5 3 cylinder is behind. The 1.0 is now surrounded by equals (and some better). Their hybrid tech and strategy hasn't moved in years. Their new transmission rollout is slow. Their interior design has been stuck in reverse for about 5 years. I used to be a huge fan of Mulally, but I realize now that he left the company on shaky ground with unclear operating and investment principles. Fields was unable to set them up. Let's hope Hackett gets the ball rolling. On top of all of this, Ford cannot stay out of the news for recalls or lawsuits for this or that issue. The supply chain appears to be a wreck and assembly quality appears to be below standard for mass-market manufacturers. All of which needs to get straightened out. All of this matters because the industry is starting to iterate much faster at the commodity level - software/tech, interior, powertrain. Body changes will slow and be reserved more and more for higher end vehicles where personalization can afford to go beyond colors. Ford isn't set up for this world, and they need to be in the next 2-3 years.
  2. To this, I would say, patriotism always loses to product in the end. Ford does not have the right product right now in the small car segment. In the long-run, that's the only thing that matters.
  3. I think the move is driven by something a bit deeper, which is: the preferences of American buyers at the lower end of the scale (e.g., not luxury) is closer to those of Chinese than European. And if you want scale and efficiency (ie - you don't need two sets of tools), the better to produce it in China. For example, Americans and Chinese value back seat space more than Europeans. Americans and Chinese consumers value quality (different from reliability) less than Europeans - so the return on material selection is lower for those markets, e.g., harder plastics, faker leather, etc. Foci will be produced in essentially two large locations: one in Europe that caters to more European tastes + performance vehicles and one China that caters to the rest of the world's standards. This means I expect wheelbase and dimensions to vary a bit by where the car is sourced (we'll see if I'm right). You could argue that somehow Honda manages the Civic in the US, but to that I'll say the Focus does not effectively match the needs of the average American small car consumer (yet again) - too little rear seat room, lower reliability, poorer balance on fuel and performance. As a result, the real ATP of a standard Focus (not ST and RS which have limited market appeal) is lower than a Civic while volumes are lower as well. You can imagine the fixed cost of both being similar, which means the net profit is weaker on Focus. In 10 years, depending on the market and Ford's ability to execute the right product efficiently (the real reason for Fields' departure), maybe small car production returns to our shores.
  4. I may be reading more into this than there this, but this appears to be a beta test of what you'd expect a driverless car system to do for you. In the future, even if we still *buy* as opposed to *share* driverless cars, it will be common for the car to drive you to work and then go park further away where it's easy. It could "run errands" if there is official standard for exchanging money and goods with the car. It could drive itself to servicing, to get fuel, etc. Ford may be trying to figure out what people value the most in terms of services so that they try to automate them through driverless first - thus creating higher value in the technology when it's launched.
  5. We're missing a massive trend in this, though: the rise and fall(ing price) of solar energy. The cost per watt installed now is just about equivalent to oil and has all but left coal dead (sorry West Virginia). In a few years, even with subsidies disappearing, solar undercuts everything else. Storage, one of the key challenges of renewables, is becoming vastly cheaper as well. Enough so that every new house should be built with solar installed. The drop in storage leads to the second point, which is electrification of our car fleet. I don't expect this to change. Tesla, GM, Audi and others will see to that and the only thing that will change that is some magical ICE improvements. It's not just the full efficiency plant to tail pipe, but the dynamics of an electric vehicle (torque!). On a more practical level, as storage become cheap, driverless + electrification is basically the panacea of local delivery. I guess what I'm saying is: having all this shale oil is great. Drill baby, whatever. But honestly, I would go full bore into the trend (solar + storage) and decouple ourselves from imported oil and allow our deposits to stretch as far as they can until they are eventually supplanted by biofuels altogether. You want to see our trade deficit evaporate in the next 5-7 years? There you go. That's your policy.
  6. Wow, lots of heated opinions on this topic. In general, my perception around the current gen Focus is quite negative (and I bought a loaded one in 2012). The question of whether Ford is issuing subprime vs GM is sort of beside the point. I don't compare Ford to GM. I compare them to the broader automobile market. Ford did several things well with this new car (hatchback!). But they also have several issues with the current gen that they failed to execute well on: Small interior - it is one of the tightest interiors in the class for legroom. Was from day one. That might be ok in Europe, but it doesn't fly in the US (or China) if you want to compete with the Civic/Corolla (gotta match the product) or if you want to compete on price (bang for the buck). Poor transmission - Ford completely bungled this one. It has left a negative perception around the Focus in terms of quality, meaning that you are forcing yourself out of the Civic/Corolla competition from day one. No hope going back. Econopremium - They missed the boat on interior usability in version one. The refresh was decent, though. However, they mixed premium features with poor quality bits here and there (NVH, some bad plastic moldings, low quality cloth seats) leading to a car that is neither budget nor premium. And then, failing to compete with Audi A3, they went straight to discounts on an econopremium product. Confusing options - the topic of the thread. The array of packages and combinations of tech are stupid. 97% consumers don't want to configure in detail. They want a good package, and off they go. I think Ford has also messed up some of their packaging, like how they bundle certain potentially desirable features into Sport packages that add styling features that might not appeal to mainstream buyer. I read most of this as Ford not knowing what it wants to be. They had a good product in Europe but no one who could step up and drive the ship in the US to make sure the product translated. To me it was an exercise in bean counting, just starting with a better product from across the pond. The Focus is about to have a really bad 18 months before the model change over. And even then... The grouping of options will help a lot to clarify things, but if I were the 2017 Focus product manager, I would be thinking about who buys the vehicle, where it's positioned, and do the following: Take the hatchback premium and the sedan downward Add the 1.5 turbo to the hatchback along with the 6MT and 6AT Keep the cheaper 2.0 in the sedan with the 5MT and the 6AT I would update the classes in the Sedan: Sedan would get a "Studio" with all the basics a rental car would need (LX in a Civic), an "SE" that is more like Honda's EX and an "SEL" that is more like Honda's Touring. I would create just 1-2 packages per trim + some transmission, wheel and color options. You could also give these levels names like Trend or Style or something. For the hatch, I would start at "SE", keep "SEL" and I would make the Titanium stand out a bit - minor fascia or body touches to make it feel unique and premium. Maybe even give the normal hatch the 148 hp 1.5 and Titanium the 178 hp version. Ditto the options. Of course, the ST and RS would stay. I would also spend time figuring out ways to incentivize dealers to sell small cars. Right now, they are good at trucks and SUVs. That hurts you because even if you have a good small car product, your dealer body will always view the small car as a "cheap thing." Ford, however, seems to be paralyzed when it comes to decision-making and not focused enough on the end consumer's needs. I suspect too many specific decisions are still top-down rather than being bottom up based on general guardrails or principles from the top. At least, that's what it seems like (global low-cost B car - wait no; no US Ranger - wait no; no real EV - oh wait, we'll also do 5 EVs; and now driverless!) Not disagreeing with Ford's broad priorities - they need to figure out how they fit into an electrified and driverless world where cars are a shared resources rather than an independently owned resource. But that means they need to know their Customer. If they don't want to know about the small/compact car customer, fine. But then cut the model. Don't let it hang around half formed. Seriously. Cut it. Ultimately, I think Ford should be working overtime figuring out commercial vehicles (driverless Transit and Transit Connect; interaction between drones, bikes and other small vehicles and their larger vehicles; electrification; fleet deployment technologies - e.g., Ford as a platform?). They have the connections deep into those industries. I would be going all out there.
  7. Actually, Japan has little control of its currency at the moment. They were trying to devalue it recently to help spur inflation to save their economy. However, after three years of pumping money and interest rates in negative territory, their currency has not moved. Currency manipulation has nothing to do with it. One of things that the Japanese government does do is provide significant R&D support to their industry. Toyota's hybrid program wasn't just something it cooked up and took a bath on for 10 years while the industry learned. That's the sort of investment I wish our government could have the nerve and foresight to foster.
  8. focus05

    New Fiesta This Fall?

    I agree that it is anecdotal at best. (quick check, though, there is no CRV V6). My reference point is similar to what you've pointed out: EB 3.5 in an F-150 that struggles to get 18 mpg cruising at 65-70 whereas the GM 5.3 is getting 19-20 mpg. And, yes, the 3.5 is faster, but not vastly. Bigger point: Ford has taken a really complicated path to reach these powertrain numbers which are, in my opinion, not that interesting. For all the pomp and circumstance around their powertrains, the point is that Ford still does not have differentiation in hard numbers in that department. Given how few departments they are differentiated in, that really concerns me about the future development of Ford vehicles.
  9. There are a lot of things that go into this decision. For example, protectionist policies like South American trade fights has led to Mexico, even at higher wages, being a better place to produce some vehicles. There is a zero-tariff trade scheme down there. I don't think the tier1 vs tier 2 thing is really the point either long-term. Sure lower wages in the US would keep some jobs in the US a bit longer, but automation will ultimately be the cheaper route (capital returns vs labor returns). And that's the much bigger threat to low-skill manufacturing jobs: automation! You can bet that the moment those wages in Mexico or China rise that Ford will automate as much as they can (and they can automate a lot since there is no union there). We should accept that we cost a lot, that holding back against cheap labor is not a winning strategy, and focus our energy and resources on educating more technically skilled and productive workers. Period.
  10. Higher wage producers will, in the long-run, be out-sourced to lower wage labor or be automated away. I just wish we could retrain our workforces faster. It's not globalization that we should be mad about; it's how little we (gov't, community, family, personal) do to support those who need to build new skills to get a new job and become more "productive." If I were running the UAW, I think I would make it my mission to actually train and educate workers up and out of my low-skill workforce over time. It might actually make people want to join the union and companies want to (pay to?) work with it. Sort of like the consulting companies do to new college grads - take 'em, train 'em, and then push 'em out of the nest in the hopes that business comes back in the future.
  11. focus05

    New Fiesta This Fall?

    Having GDTI across the lineup is not impressive. It's just how Ford has invested. Having a set of GDTIs that, on balance, return the same mileage and acceleration as less complex GDI engines offered by other manufacturers makes no sense to me. Ford's truck applications are a great example of this. The Fusion's 2.0 liter is poor in terms of performance and economy vs Accord or Camry. The Escape's engines provide little if any advantage vs CR-V or CX-5 (of course, both the Fusion and Escape get updates for 2017, and I hope real progress has been made with the twin scroll). I can add more thoughts about Ford's product strategy later. In general, they are obsessing about the right cars, but their boldness in those segments and against the growth of competition from below (Hyundai) and above (Audi) leaves a lot to be desired.
  12. focus05

    New Fiesta This Fall?

    Ford's adherence to One Ford while not cutting through all the organizational mess, I believe, is a core cause of the lack of direction in their small car strategy. You have 3, maybe 4, different markets when it comes to small cars - Europe (mid-scale, around 4m hatch); Emerging Market (low/mid-scale, <4m hatch for India); and NA/China (low/mid-scale, around 4.4m sedan/4.1m hatch). Honda has bridged these with the Fit/Jazz and makes a modification for India and de-contents for 3rd world. But its quality reputation carries its ATPs and it lives with lower volumes in Europe. Toyota uses the Toyota Vitz/Yaris to be sub-4m out of the box, ditto above. Hyundai has a separate car (Accent) for the US and China/Asia while providing the i20 for Europe and India all on the same platform with many shared parts but different designs. Ford is still trying to figure out what it wants to be. They like their sales volumes, but they want their ATPs. They don't have a strong enough reputation to get those higher ATPs in any country (quality, technology, German) other than with F-series. They're hoping to fill in gaps with vehicles like the Ka/Figo or Ecosport to save money when those vehicles are poorly suited for the target segments in Europe or the US. Overall, I see a mess at Ford right now other than driverless. Their engine technology seems to be lagging the field. Their electrification strategy is lagging the field now. Very little leadership on strategy. A lot of bureaucracy. No forceful and urgent bets other than driverless, and they will likely end up behind in that because they are not Google, Amazon or Tesla. Their One Ford strategy sounds great, but they have too much red tape to actually scale effectively globally. Mulally had the right idea and made some strides, but didn't do enough house-cleaning. Fields is executing it poorly and needs to clean out more mess. The best move made recently was splitting off driverless. That might save the company from itself in 5 years, but it's going to be a rough next 5 years for Ford, imo.
  13. Honestly, this is a s**t product. I'm struggling with this CUVs role in a US portfolio. It is 160" long - 7-9" shorter than other B- CUVs. It could be the first "A" CUV. Really, really small. But I'm not sure Americans want really really small. It's not an off-road product by any stretch. It won't be more fuel-efficient. It doesn't seem to out perform its peers in the UK. Ford needs to re-think their entire A/B and emerging/developed market strategy. I suppose they can bring cheap, small, compromised CUV like this to the US, but it would be dumb, imo.
  14. I noticed the cliff with my 2013 Ford Focus. 55-60 mph was the sweet spot. I could get 42-43 mpg all day driving there with low profile tires even. Get to 70, and it was down to 36. Get to 75 and it was down to 34. Get to 80, and I'm at 31, which is not much different than my 2005 Focus was at 80. For the 2012-4 Focus, I'm pretty confident it was the gearing that made the difference. Ford seems to have optimized the gearing for the EPA tests. My guess is that they would model that optimal load points in the rpm band, get the engine there around 60 in top gear for the EPA test and Bob's your uncle.
  15. focus05

    Small CUV Market and Ford

    Ford's small car strategy is pretty poor in total at a product level, although maybe, at the time, reflected appropriate investment at a business level. Their small car packaging is bottom of the industry at best with many of their product suffering from poor interior room even comparing exterior dimensions. The new Figo/Ka are relatively large in their exterior dimensions for the interior volume they deliver as they sought to re-use a platform. Same with the Fiesta as Ford pushed to stay sub-4 meter for India instead of creating two lengths like most automakers have - one for India, one for ROW - by making low cost changes after the B-pillar. The Ecosport suffers from the same sub-4 meter cramming mentality, which gains 10,000 sales in India but loses probably 100,000 elsewhere around the globe. VW has a better approach with a purpose-built city car platform underpinning the up! and spawning a CUV in India that is sub-4 meters by design instead of shoe-horned into sub-4 meters. Europe shows us that the 167-170 in length CUVs probably outperform the short and more cramped Ecosport. I believe that will be more true in the US. What's the right strategy? Not exactly sure. I don't have all the facts. But if I were Ford, I would think about a true City platform (borrowed or designed) to spawn an up! competitor and a CUV in the sub-4 realm and figuring out how to make them adaptable from India and Brazil to dense cities in Europe and China. Then, Fiesta can have its own platform and models. You can still have a sub-4 hatch, but you have more flexibility in designing the vehicle with style and space. From there, the Fiesta, B-Max and Ecosport can be better targeted at the EU, US and China markets while still service the emerging markets partly.
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