WHAT'S THE PROFIT MARGIN FOR FORD FLEX

[salsakingcpa]

I AM FORECASTING THAT FORD IS GOING TO SELL AROUND 100,000 FLEX Automobiles A YEAR minimum, and a maximum of 240,000 units. My forecast is based on the fact that its cousin Ford is sold around 10,000 units a month in 2007, and now it sold around 13,000 units in March of 2008.

 

FORD FLEX is going to have a cult following in places like California, Florida, and the East Coast so 20,000 a month is doable. Hopefully it becomes something like Ford Mustang.

 

I am forecasting that Ford Flex profit margin is about $7/10,000 per each unit; in other words, each time Ford sells a Flex, it is making $10,000 after all bills are paid. How do I come up with this conclusion? Lee Iacocca, once claimed that a Jeep makes about $10,000 net operating margin, and that was in the early nineties.

 

$7,0000 profit margin times 120,000 units equal to 840 million dollars in profits a year or 210 million a quarter for making and selling Ford Flexes.

 

If Ford Flexes become a major success like selling 20,000 units a month, then Ford is guaranteed to show around a billion dollar profits a year. If the Flexes sell around 10,000 units a month then, Ford is going to break even every year.

 

Comments welcome!!! To bad this board is full of engineers, sales people, machinists, but no bean counters.

[Big_Mack]

Well,I personally like the new Flex, but before I go making predictions I wanna see how they advertise this thing. The styling is pretty cool, but sometimes that isn't quite enough. It's either going to get a lot of attention...or nobody is gonna give a shit about it...but we will see soon!!

 

 

$7,0000 profit margin times 120,000 units equal to 840 million dollars in profits a year or 210 million a quarter for making and selling Ford Flexes.

 

Comments welcome!!! To bad this board is full of engineers, sales people, machinists, but no bean counters.

 

P.S. I think I speak for all the engineers,sales people,and machinists around when I say that "$7,0000" is an amount of money that I have never heard of before...you might wanna "bean count" the number of zeros on that one...

[salsakingcpa]

Well,I personally like the new Flex, but before I go making predictions I wanna see how they advertise this thing. The styling is pretty cool, but sometimes that isn't quite enough. It's either going to get a lot of attention...or nobody is gonna give a shit about it...but we will see soon!!P.S. I think I speak for all the engineers,sales people,and machinists around when I say that "$7,0000" is an amount of money that I have never heard of before...you might wanna "bean count" the number of zeros on that one...

 

Don't worry, Mr. Farley will do a stupendous job in marketing/advertising the Flex. As for the profit margin, it is fairly credible; if Chrysler under Lee Ia..... can do it, then Ford under Mr. Alan Mulally can do it even better/more.

 

Bold Moves? Bold Predictions.

[battyr]

Iacocca was around when? The 80's? I think the auto market is a little more competitive now. Sure, a fully loaded Flex would make $7000 plus profit each. They all won't be fully loaded.

[OAC_Sparky]

Ford has already said that they have a 50-100K goal for the Flex, there is no way we will build 240K even if the demand was there. It's just not possible for the volume the plant puts out. The top output is somewhere around 350K IIRC, and that's combined Edge, MKX, Flex and MKT. It just won't happen.

[ANTAUS]

I believe Fords sales forecast are also 100K, but I dont think they have much capacity thereafter unless another vehicle like the Taurus/Sable, sells less. I think 200K is kinda pushing it though... I personally thought that maybe 50-60K was a "decent" convervative goal.

 

I dont think the profit margins are at $10K either. I believe very few vehicles approach that target. I think the CV is one of those from what I read once, but depends how you do your math. If your taking the initialize R&D of the platform, well most of that has been spread out thru other D3 cars, so where would we start measuring, per se...

[salsakingcpa]

Ford has already said that they have a 50-100K goal for the Flex, there is no way we will build 240K even if the demand was there. It's just not possible for the volume the plant puts out. The top output is somewhere around 350K IIRC, and that's combined Edge, MKX, Flex and MKT. It just won't happen.

 

Maybe with the 3rd shift, Ford could expand its production volume, if Flex does really well, then MKT could be postponed until next year?

[salsakingcpa]

I believe Fords sales forecast are also 100K, but I dont think they have much capacity thereafter unless another vehicle like the Taurus/Sable, sells less. I think 200K is kinda pushing it though... I personally thought that maybe 50-60K was a "decent" convervative goal. I dont think the profit margins are at $10K either. I believe very few vehicles approach that target. I think the CV is one of those from what I read once, but depends how you do your math. If your taking the initialize R&D of the platform, well most of that has been spread out thru other D3 cars, so where would we start measuring, per se...

 

I concur with you 100%. With F-150+ sales plummeting by 20/30%, Ford really needs to make it up with higher production and sales of Flex, Escape, and Edge. They are the next runner up as far as profit/operating margin goes when compared to F-150/250s and Explorers. Contribution from Focus and Fusion helps, but car sales have low margin. Boggles my mind that Taurus Sedan is not advertised; I guess Ford doesn't want Taurus X to compete with the Flexes.

 

Too bad, Ford didn't bring EcoSports from Brazil because most/all R&D was paid for, but the heir apparent Mark Fields opted for a new design-Escapes. Do you think Ford Transit will be made in the US? It has to keep it union members occupied.

[silvrsvt]

Too bad, Ford didn't bring EcoSports from Brazil because most/all R&D was paid for, but the heir apparent Mark Fields opted for a new design-Escapes.

 

Once again your proving your a fucking moron, the EcoSport in no way or shape was to replace the Escape...it was going to be the B-car for Ford and Mark Field's nixed it because it was Ford trying to out Korean the Koreans...

[salsakingcpa]

Once again your proving your a fucking moron, the EcoSport in no way or shape was to replace the Escape...it was going to be the B-car for Ford and Mark Field's nixed it because it was Ford trying to out Korean the Koreans...

 

With Gas prices going so high, Escape could proved to be too large, Ford needs Cuvs that are lighter, cheaper, and smaller. Because of short sighted people like you that dominate US automobile industry, Detroit Big 3 are going belly up. Chrysler is owned by a Hedge Fund, and the same Hedge fund directly controls GMAC which indirectly controls GM, and now Tracinda, another hedge fund type of company, is getting Ford for a chop change. Why do you think FORD IS SELLING ALMOST 15/20,000 UNITS A MONTH? why do u think Mustang sales are plummeting?

 

Again, people like you and Fields only see today, and not tomorrow. SUV/Truck owners can not even trade in their gas guzzlers because most dealers wont' take them as gas guzzlers values have fallen dramatically. Now these people will be buying Kias and Hyundais.

Edited May 11, 2008 by salsakingcpa

[salsakingcpa]

Once again your proving your a fucking moron, the EcoSport in no way or shape was to replace the Escape...it was going to be the B-car for Ford and Mark Field's nixed it because it was Ford trying to out Korean the Koreans...

 

mustang guzzler, Fields is a goner before the end of this year; so you'd better enjoy quality time with your bud.

Edited May 11, 2008 by salsakingcpa

[J-150]

Once again your proving your a fucking moron, the EcoSport in no way or shape was to replace the Escape...it was going to be the B-car for Ford and Mark Field's nixed it because it was Ford trying to out Korean the Koreans...

 

 

 

agreed. Toyota couldn't sell the smaller 2 door RAV4 either. Micro SUVs have a limited market

[J-150]

mustang guzzler, Fields is a goner before the end of this year; so you'd better enjoy quality time with your bud.

 

 

why do you think that?

 

even if Fields is the moron you think, he makes a good hatchet man to execute executive directive and take the primary blame for it.

[J-150]

With Gas prices going so high, Escape could proved to be too large, Ford needs Cuvs that are lighter, cheaper, and smaller. Because of short sighted people like you that dominate US automobile industry, Detroit Big 3 are going belly up.

 

 

the reality is Salsa, that all manufacturers got caught up in bigger vehicles. Just look at Toyota, Honda and Nissan all launching trucks. Talk of Honda developing a V8.

 

 

The Detroit 3 shot themselves in the foot for reasons other than fuel economy.

 

 

I think Ford needs to launch the Verve and prove they can make a quality B-car before they launch variants.

[silvrsvt]

With Gas prices going so high, Escape could proved to be too large,

 

The market reaction has been the oppsite...the Escape keeps gaining in sales

 

why do u think Mustang sales are plummeting?

 

Mustang sales are fine....when the 05 came out, Ford was only expecting about 120K units a year to move, but the car was more successful then expectations, not to mention the car has been on the market for nearly 5 years now and hasn't had any siginfant changes to it outside of some limited editions and is now selling at its expected rates

 

Again, people like you and Fields only see today, and not tomorrow. SUV/Truck owners can not even trade in their gas guzzlers because most dealers wont' take them as gas guzzlers values have fallen dramatically. Now these people will be buying Kias and Hyundais.

 

Why should Ford be blamed for people's stupidity? People are stupid with money, esp if your making car payments on a SUV and want to trade down into something smaller. Your better off paying the damn thing off then trying to trade it in.

[salsakingcpa]

The market reaction has been the oppsite...the Escape keeps gaining in sales.

With EcoSports, Ford would sold twice as mcuh and made better profit, why don't you grow up, and start thinking like successful businessmen ala Japanese executives do. Mr. Mulally is going to unify CUVs across the Americas and the world what Mr. Mulally wants to do.

 

Fields by introducing Escapes, which cost a pretty sum of money for a fresh design and tooling, introduced another car model ala GM introducing another brand which is going to disappear in two or three years.

 

Most important of all, why do you think, Ford South American consistently make 800 million to 1 billion dollar a year with 1/10 of volume (of NA) with B rated cars like you claimed, and North America couldn't make a dime in 2007 with such non B rated cars like Escapes.

 

In the end, Escape is going away (WHAT A WASTE OF MONEY), and EcoSport which sound so much greener and fun will stay.

 

1)The market reaction has been the oppsite...the Escape keeps gaining in sales.

Mustang sales are fine....when the 05 came out, Ford was only expecting about 120K units a year to move, but the car was more successful then expectations, not to mention the car has been on the market for nearly 5 years now and hasn't had any siginfant changes to it outside of some limited editions and is now selling at its expected rates.

 

 

About Mustangs. That's not the point, the point is due to rising gas prices, sales of Mustangs are going down, and will keep going down whether an updated version comes out or not.

 

Mustangs need to be rightsized to a smaller version ala Genesis with independent rear suspension to reclaim its crown down the road with so much good competition coming. It is such a gas guzzler, Mr. Mulally would have to think about something to meet the new mpg rules down the road, and tell Fields to pick up his pink check and go to work for GM, maybe GM will hire Fields as its new CEO.

 

1)The market reaction has been the oppsite...the Escape keeps gaining in sales.

Why should Ford be blamed for people's stupidity? People are stupid with money, esp if your making car payments on a SUV and want to trade down into something smaller. Your better off paying the damn thing off then trying to trade it in.

 

Again you are missing the point, and that is the reason I say people like you really messed up Detroit. Both Detroit and People are stupid that they produced and bought SUVs and other gas guzzlers in the first place. Haven't you learned your mistakes? In the eighties, big 3 almost went belly up because their autos were so much bigger and consumed more gas than their Japanese counterparts? Now, it's the same again, instead of gas guzzling cars, Detroit produced gas guzzling SUVs.

 

Do you know how to add or substract? Since you don't remember, I'll show it to you. If your car payment is $400-600 a month, and your gas payments are 360 dollars a month; and your new car payment and gas payment is going to be much less than 760/960 dollars a month, people are thinking that they are definitely better off with a smaller car.

 

Time has come that people will be walking away from their SUVs like Explorers just like people walked away from their houses with negative amortization meaning what they owe was greater than what they could get for 'em.

 

Real losers: Detroit big 3, and their affiliates including employees. If people start walking away, Both Ford and Ford Credit will be left holding the bag, and people who walk away from the guzzlers, they can always buy cheap economic used cars down the road.

 

Alan Mulally said that Ford abdicated from producing cars and started producing gas guzzlers and that is anathema with Mr. Mulally. At Boeing he introduced and advocated Boeing 777 that consume less kerosene than its competitor Airbus version of it - A340.

Edited May 11, 2008 by salsakingcpa

[salsakingcpa]

the reality is Salsa, that all manufacturers got caught up in bigger vehicles. Just look at Toyota, Honda and Nissan all launching trucks. Talk of Honda developing a V8.The Detroit 3 shot themselves in the foot for reasons other than fuel economy.I think Ford needs to launch the Verve and prove they can make a quality B-car before they launch variants.

 

THE REALITY is that the Japanese Automakers only 20% or less of their entire fleet are made up of SUVs and Trucks, and 80% of the total production were dedicated to automobiles. On the other hand, the US automakers had 20% automobiles, and 80% SUVs. Why do you think TOYOTA #2 per some people made 20/30 billion dollars in profits, and GM LOST 20/30 billion dollars.

[salsakingcpa]

why do you think that?even if Fields is the moron you think, he makes a good hatchet man to execute executive directive and take the primary blame for it.

 

Taking blames for it is TOO LATE NOW. He was THE MAN before Mr. Mulally showed up, and Fields couldn't do jack s. Following and leading are two different and opposite things, and in Detroit there are too many of those that are not needed. For cost savings sake, he should have brought EcoSport. No, he ordered a new CUV - Escape. He should have brought Ford Transit Connect from Europe (specially since you J-150 likes to give all the credit for the European turnaround to Fields). No, he didn't do that. It took a Jet engineer, Mr. Mulally, to bring it from Europe. A few days before Mr. Mulally was hired as the CEO, Fields ordered a new billion dollar plant to be built in Mexico. THANKS GOD, Mr. MULALLY scrapped it as soon as he found out, and SHOWED FIELDS that this was not necessary because ALLIANCES WITH MAZDA and Toyota could do it much cheaper. BY THE WAY, didn't you give all the credit to FIELDS for the MAZDA TURNAROUND, and he didn't even think about an alliance with MAZDA and Toyota. THUS, Fields is incompetent to lead a major automaker like Ford. Surely he is politically competent, but when Fields take over Ford is as good as GM, by then I would sold all my Ford shares.

 

We need people like Mr. Farley and Mr. Mulally who can lead from day one. Farley instituted offsetting 50% of dealer advertisements, changed FLEX MARKET POSITIONING from families to TREND SETTERS. He quickly replaced marketing bosses, and gave more power to regional marketing managers, and came up with a plan to regain market share, talked to psychologists, and came up with Ford buy one campaigns among other types of advertising campaigns. He also increased the marketing budget for the Ford parts division (that's where the money is).

 

Truth of the matter is that Fields is in a really tight spot because he is no longer in charge of North America as he used to. Advertising is controlled by Fields, and manufacturing is controlled by Joseph .... (forgot his last name). Mr. Joseph.... is such a smart guy, he was the youngest plant manager in the history of Ford Motor.

 

We can go on and on about it.

[BORG]

Consumers in the US are different than the consumers in Sorth America, consequently their cars are different. Assuming what works in one market will work here is fundamentally wrong. Your entire argument is rubbish based on this VERY simple principle of marketing.

[salsakingcpa]

Consumers in the US are different than the consumers in Sorth America, consequently their cars are different. Assuming what works in one market will work here is fundamentally wrong. Your entire argument is rubbish based on this VERY simple principle of marketing.

 

Actually your argument is rubbish because the Japanese & European automakers were able to consistently make money with the same cars that they sell in South America as they do it here. This is the main reason that American automakers are not making any profits or they are not generating greater profits. Both Japanese and European car makers produce world cars - cars that can be sold in Europe, Asia, and Americas. However, US car markers produce gas guzzlers that only US PEOPLE & some very rich people in the world can buy.

 

This is common sense folks; you are in the business of making money. Don't you think that you would be better off making world cars that can be sold anywhere in the world rather than just in one place - USA? Both Mr. Mulally and the World Automakers think so.

Edited May 11, 2008 by salsakingcpa

[J-150]

THE REALITY is that the Japanese Automakers only 20% or less of their entire fleet are made up of SUVs and Trucks, and 80% of the total production were dedicated to automobiles. On the other hand, the US automakers had 20% automobiles, and 80% SUVs. Why do you think TOYOTA #2 per some people made 20/30 billion dollars in profits, and GM LOST 20/30 billion dollars.

 

 

because they haven't been able to make those kinds of inroads into trucks.

 

5 years ago, Toyota would have given their left nut to have 80% large pickups and SUVs (which had the highest margins at the time)

[salsakingcpa]

because they haven't been able to make those kinds of inroads into trucks. 5 years ago, Toyota would have given their left nut to have 80% large pickups and SUVs (which had the highest margins at the time)

 

J-150, you are missing the point, the POINT is the Japanese automakers, Toyota, Nissan & Honda can make so MUCH money with low margin cars, and THE US AUTOMAKERS are making ZERO PROFITS with HIGHEST MARGIN trucks.

 

So when the Japanese automakers finally make inroads into the truck market what's going to happen?

Edited May 11, 2008 by salsakingcpa

[Edstock]

Again, people like you and Fields only see today, and not tomorrow.

That's your opinion, and you're welcome to it. But, unless you have secret access to Ford's plans, that's all it is: you have no real facts to say that Fields sees "only today".

 

Cancelling the EcoSport was because the sled could not meet industry best-practice for the NA market. Instead of rushing an inferior product to market, Ford is developing a B-size CUV that will be competitive with any other.

[salsakingcpa]

UPDATE: Found out this morning that Ford Edge is proving to be a bomb!!! If this is the case, then forget about Flex having a 7-10,000 profit margin; in the end, it is going to break even at best. Ford Edges are having both transmission and front axle problems at around 13,000 miles. WTF?

 

 

I found this from a different Forum:

Posted by: Shannon | Feb 5, 2008 3:57:02 PM

Hi! I fell in love with the Ford Edge until I bought one. I am disappointed in the quality and customer service. I pray that it gets better.

 

Posted by: Susan | Feb 8, 2008 11:17:55 AM

I have a 2007 SEL Plus, and I am currently getting the entire trasmission replaced. They replaced the transfer case seal once and the trasmission fluid kept leaking. They said no matter how many times they replace the seal, it will still have a leak, so that is why they are replacing the whole transmission. I am pretty frustrated considering the car is not even a year old. Figure it out FORD!

 

Posted by: Maggie | Mar 8, 2008 1:39:56 PM

13000 miles and my transmission is done. Good thing it happened 200 miles from home on a sat night. I couldnt even get a rental. Thanks ford for the great product.

 

Posted by: tybraxx | Mar 22, 2008 8:36:45 PM

At 11,500 miles, I have a transmission leak and I am very concerned about it's future considering trouble beginning with such a low mileage, other wise, I love my 2007 SEL

 

Posted by: Amy Davis | Mar 27, 2008 10:39:47 PM

Join the club too... just took my 07 Ford Edge in for transmission leak at 11,000 miles. Drove it around the next day after it the Ford Dealership said it was fixed. A big puddle of transmission fluid in my garage. Now they say, their is a service alert to all Ford Dealers about the problem. I wonder if I can get them to consider giving me another car as from I see the problems with the transmission are ongoing.

 

http://64.233.167.104/search?q=cache:fkcwM...;cd=1&gl=us

 

 

FROM A DIFFERENT SITE:

 

#3 of 5

Ford Edge by advicepls

Jan 17, 2008 (3:04 pm)

Reply

 

My ford edge with 9k miles was smelling like exhaust inside the car. Ford found and fixed a rear axle seal. This took about 2 weeks because of the holidays and another part being defective and in short supply. The car still has this sporadic smell of exhaust or burning inside and outside the car. One time, smoke was coming in through the vent.

 

My ford dealer said to bring it back when it is making the same smell again. The problem is that it is sporadic and of short duration. Any suggestions? Anyone else experiencing this problem?

 

My dealer does not have a loaner available unless they know what the problem is.

 

* Replies to this message: goatee (Jan 17, 2008 4:24 pm)

o advicepls (Jan 18, 2008 5:43 am)

 

#4 of 5

Re: Ford Edge [advicepls] by goatee

Jan 17, 2008 (4:24 pm)

Reply

 

Replying to: advicepls (Jan 17, 2008 3:04 pm)

I am reading more about this every day. Seems to be a problem with the seals in the transmission. Please check the posts in Blueovalnews.com, go under Edge Forums then TSB's Maintenance section -scroll down and you will see what I mean. I hope they get a handle on this problem. Dont wait to get it fixed.

 

http://townhall-talk.edmunds.com/direct/view/.f179ccc

Edited May 11, 2008 by salsakingcpa

[BlackHorse]

The profit margin at the dealership level might be 7 to 10 thousand per Flex sold but you can bet the house that the profit to Ford Motor Company is a hell of a lot higher than that. You'll never know just how high that margin is because major corporations like Ford, Toyota and ohter car makers don't want you to know that information; because if the general public ever found out how badly they were getting taken to the cleaners for the cost of a new car they'd never buy one again.