fordmantpw Posted January 11, 2011 Share Posted January 11, 2011 Chrysler announced today at auto show that it spent $1 billion on updating the new 300. If Ford wants to spend that kind of money on Flex in a few years to keep it competitive with such low sales, then I guess they will do it. I don't see the business case for it, but it's their money. I'd rather see that money go to their high volume vehicles and even Lincoln that needs product badly. And I'm disappointed that Ford showed nothing new about Lincoln at this very influential show. Where the hell is the MCE MKS? So Chrysler overspending on the "new" 300 means Ford will do the same with the Flex? I'm guessing the MCE on the Flex will be much much less than a bil! Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 11, 2011 Share Posted January 11, 2011 So Chrysler overspending on the "new" 300 means Ford will do the same with the Flex? I'm guessing the MCE on the Flex will be much much less than a bil! I'm not even sure Ford spends a billion dollars on an F-150 MCE. Quote Link to comment Share on other sites More sharing options...
mackinaw Posted January 11, 2011 Author Share Posted January 11, 2011 Chrysler announced today at auto show that it spent $1 billion on updating the new 300........... Actually they spent MORE than $1 billion dollars. To quote from today's Automotive News, "Olivier Francois (CEO of Chrysler brand) said the company invested “over $1 billion” in the 300 and he expects widespread public acceptance once consumers drive the vehicle." They didn't get their money's worth. I liked the original 300 but this mid-cycle restyling is bland and boring. Quote Link to comment Share on other sites More sharing options...
PREMiERdrum Posted January 11, 2011 Share Posted January 11, 2011 I'm not even sure Ford spends a billion dollars on an F-150 MCE. I thought that the big press when the 2004 F150 debuted was that Ford spent $1Billion on the brand new, clean sheet platform. $1Billion for the underwhelming refresh on the 300? Ouch. Buyers remorse soon to follow. Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted January 11, 2011 Share Posted January 11, 2011 I thought that the big press when the 2004 F150 debuted was that Ford spent $1Billion on the brand new, clean sheet platform. $1Billion for the underwhelming refresh on the 300? Ouch. Buyers remorse soon to follow. I'm thinking you're right...but that WAS 7 years ago now! Still, if it doubled to 2 bil, for an entirely new F150, there's no way a Flex MCE would cost half (or even 1/4) that, and there is NO WAY Chrysler got there money's worth if they spent a bil on the 300! WOW! Quote Link to comment Share on other sites More sharing options...
BrewfanGRB Posted January 11, 2011 Share Posted January 11, 2011 Volume is still an important factor in profitability, especially when you are selling cars in the sub $40K arena. Sharing platforms and sharing top-hats are different things, it still costs lots of money to develop and market each and every car they pump out. If Ford doesn't see enough volume on a car, their margins go down because they didn't recover their costs. Wow, thanks for the Econ 101 lesson. Has it occurred to you that is EXACTLY why Ford continues to sell the Flex and why it plans on making the investment for an MCE to continue it in the future? This is not "Old Ford". You, me, Nick, RJ know NOTHING specifically as to amortized costs Ford incurred for the Flex, the true ATPs for the vehicle or the product mix. Therefore, the only logical conclusion must be that the vehicle is profitable. That's it. Quote Link to comment Share on other sites More sharing options...
BrewfanGRB Posted January 11, 2011 Share Posted January 11, 2011 When does Ferrari go out of business? Precisely. Occasionally, FB does come out with a reasonable post with some decent points. It's amazing to me that he doesn't yet understand why one cannot positively correlate volume to "success". Fordbuyer: Selling cars is not like signing an NFL contract. Ford doesn't get an incentive bonus for selling 100,000 Flexes. In absolute terms, they make more profit...but not necessarily a higher MARGIN. Margin is what it's all about and if you don't get that, then no conversation here will ever yield different results. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 11, 2011 Share Posted January 11, 2011 (edited) 1) If Chrysler spent $1B on the 300, they must be keeping books in the style of the old Ford: bill one platform/vehicle line for 100% of any new technology. Which leads to: 2) the Flex has a fractional cost assigned to it for dozens of technologies, and 100% of its tooling. That tooling *might* be in the $250M range, but I doubt it----even if you go $500M for it and the MKT, and carry 80% of that tooling cost for a 6 year lifespan (assuming that 20% of the tooling is replaced at the 3 year mark) for a total of 120% of $500M or $600M over 6 years, you're looking at these numbers: Tooling: $600M @ 50k units per year combined over 6 years = $600M / 300,000 or $2,000 per unit in tooling. Every other sale constitutes incremental volume toward the amortization of transmissions, engines, electronics, brakes, suspensions (shared with the Taurus & MKS), etc. Folks, the Flex & MKT don't have high break-evens. Edited January 11, 2011 by RichardJensen Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 11, 2011 Share Posted January 11, 2011 Folks, the Flex & MKT don't have high break-evens. It's gotta be far lower than it is for a vehicle like the Mustang, which really isn't selling a whole lot better right now. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 11, 2011 Share Posted January 11, 2011 It's gotta be far lower than it is for a vehicle like the Mustang, which really isn't selling a whole lot better right now. Granted, the tooling amortization for the Flex is probably in Lincoln territory, but so are its transaction prices. The math almost certainly works. Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted January 11, 2011 Share Posted January 11, 2011 Not to mention the advertising costs on the Flex are damn-neart zero! Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 11, 2011 Share Posted January 11, 2011 Not to mention the advertising costs on the Flex are damn-neart zero! ...unfortunately. They are pretty damn low on the Edge too it seems. Everyone who sees my Edge really seems to like it. When I tell people I have an Edge, they look at me somewhat confused. Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted January 11, 2011 Share Posted January 11, 2011 ...unfortunately. They are pretty damn low on the Edge too it seems. Everyone who sees my Edge really seems to like it. When I tell people I have an Edge, they look at me somewhat confused. I'm sure most people think "an Edge" is a guitarist for an Irish rock band. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 11, 2011 Share Posted January 11, 2011 They are pretty damn low on the Edge too it seems. In the first half of 2010, Americans were exposed to $63.57B in advertising. Pretty tough to make a dent in the customer's mind when you're dealing with that kind of overload. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 11, 2011 Share Posted January 11, 2011 In the first half of 2010, Americans were exposed to $63.57B in advertising. Pretty tough to make a dent in the customer's mind when you're dealing with that kind of overload. They could at least try. I don't think I have seen a print or television ad for the Edge since about 6-8 months after it was launched. Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted January 11, 2011 Share Posted January 11, 2011 They could at least try. I don't think I have seen a print or television ad for the Edge since about 6-8 months after it was launched. I saw a TV ad within the last couple of weeks. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 11, 2011 Share Posted January 11, 2011 They could at least try. I don't think I have seen a print or television ad for the Edge since about 6-8 months after it was launched. OTOH, I've seen them pretty regularly during college football--which just goes to show how hard it is to get the word out. Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted January 11, 2011 Share Posted January 11, 2011 Here you go: http://www.youtube.com/watch?v=voI59XKbqmM Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 11, 2011 Share Posted January 11, 2011 I always am . Look, the Flex and MKTs are sizable disappintments for the company with niche appeal and diminishing returns, Ford knows when they have an unsustainable prodct on their hands and future investment is a mistake. They dont' need the Flex, it's not working, lets move on and do so gracefully. The Flex is a fun footnote in Ford's history, but it was a mistake and I KNEW it would be all along, any car forced from concept to production via manipulated focus group data was bound to fail. Sizeable disappointments? So a vehicle that (from what we know) is profitable, has brought attention (mostly good) to Ford, has sold well in areas where Ford has not performed well in recent years (east, west coasts), and has has excellent conquest sales numbers is a "disappointment?" I think the Explorer may have the opposite effect on Flex sales, at least in the short term. Remember when the Windstar came out? It was supposed to replace the Aerostar, but sales increased on the Aerostar and they continued production a year longer than planned. When people go to see the Explorer, I bet a quite a few people will the "discover" the Flex and end up really liking it, especially the 2nd row room compared to the new Explorer. Then once that wears off, here comes the updated Flex to steal Explorer sales. I've had this opinion from the beginning - people are drawn in to see the new Explorer, then realize Flex exists and decide they like it better. Sales will dictate how long Flex sticks around. IMO, 2,000/month would be minimum Ford needs to stay motivated to keep it around. If and when it consistently sells like Lincoln model, Ford will let it die on vine. Ford ain't Lincoln. It's hard to imagine most Ford customers picking Flex over 2011 North American truck of year. The Explorer is basically a CUV station wagon like the Flex. I don't think a MCE will help Flex much either. And Ford would be wise to hold off on spending signficant money on comprehensive MCE on Flex until analyzing sales figures 1 year after Explorer has been in production. I suspect Flex sales will fall to 1,500/month range soon. So you've seen this MCE in your crystal ball??? Oh, and by the way, Flex sales for December......2,279 - above your magic threshold - in fact, I cannot recall a month the Flex has been below that 2,000 magic number (except perhaps the first month or two after it first came out). Hey, if it was up to me, I would have pulled the plug on the Flex already. The only Ford branded vehicle selling that low a number should be a halo car, and the Flex is no halo car. Not even close. Ford doesn't do halo cars anymore, not even Lincoln. I don't think dealers need 50 Flexes on their lot taking up space month after month. There is no sales traction with this vehicle even without competition from Explorer. Now with Explorer becoming station wagon like Flex, forget it. Who knows...maybe Explorer will help sell a few more MKT's, but it won't help sell the Flex. Ford could push the MKT as a more luxurious Explorer. The Explorer is a more luxurious Flex with better fuel mileage and same price. 50 Flexes on their lots? The entire country is not like Metro Detroit!!!!! I rarely see ANY Flexes on local Ford lots OR their get-ready lots - they're simply not there, which to me means that they cannot keep the few they have in stock. The Explorer is also 2 model years newer than the Flex, I would expect it to get better fuel economy and be somewhat more luxurious. So then tell us the facts...of the 2,000 Flexes sold/month, how many are EB's, how many Limiteds, and how many the base SE's? And how did you guys get hold of Ford's profit figures on the Flex? Assuming high ATP's on the Explorer, is if better to sell 10,000 Explorers/month or 2,000 Flexes/month? Kuzak HOPES there is room for Flex. Yeah, HOPE is the correct word. I hope about a lot of things also. Last I remember reading, it was some ridiculous percentage of Flexes sold were Limited models (50%??). And excuse me, sir! If you'd actually bother to read the article rather than assume what somebody posted and altered was correct, you'd see the word "hope" was not used in the quote. Don't worry now...we will remind you Ford slappies of Flex's demise when it does happen, and it won't be that far in future. Borg predicted 2014 I believe. I don't know about that, but it will be in that time frame give or take a year. $4-$5 gas will make it sooner. $4-5 gas will make Flex's demise sooner? How so? Why do you think no fuel economy improvements will be made - the same ones Explorer has been given to achieve it's superior (to Flex) mileage. Name me another FORD nameplate that sells in such low numbers? And not lost on me, but obviously others......Ford sales up 21% for 2010 and Flex sales down 12%. In other words, Flex is not joining in on the party. It's off by itself crying in its beer. Only Lincoln branded models "enjoy" such low sales rate. And not all Flexes sold are $40,000+ models. Many are SE's selling for around $28,000 out the door. Even with value priced SE and incentives, Ford still can't move the sales dial much. And this was before the 2011 Explorer hit dealers. You do realize the SE trim makes up the smallest percentage of Flex production and sales? Which means SEL and Limited trims are selling more, which equals higher profits. So give us your "theory" why Ford sales are up 21% and Flex sales are down 12%. What is good about that. And AGAIN, this is before 2011 Explorer hit dealers. What am I missing here? You mean Ford sales executives are not concerned about sales laggards, and vehicle that has never met sales expectations. I know some of you think Explorer will actually help Flex sales. I don't see how. I see the Flex helping Explorer sales. Lack of advertising, lack of consumer awareness, lack of dealer stock, etc. etc. As I said above and have said for months, people will come to see the brand new Explorer and then see Flex for the first time and may decide they like it better than the Explorer based on personal taste, second row room, whatever! Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 11, 2011 Share Posted January 11, 2011 Here you go: http://www.youtube.com/watch?v=voI59XKbqmM Oh yeah. Completely forgot about that one. :lol: Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted January 11, 2011 Share Posted January 11, 2011 You put a lot of work into that post RMC. Here is what FordBuyer heard (as he hears from all of us): :blah: :blah: :blah: Quote Link to comment Share on other sites More sharing options...
2005Explorer Posted January 11, 2011 Share Posted January 11, 2011 No one here really knows what is going to happen with the Flex. Of course Kuzak is not going to say, "Oh we are going to cancel it" until they see what happens with the all new Explorer sitting in the showroom next to it. As long as the Flex is making money they will keep producing it. If it starts to sell in such low numbers that it is no longer making a profit then the MCE will be cancelled and the vehicle will be discontinued. I am sure they will be watching how the Explorer does and how it is effecting Flex sales. In my opinion having the new Explorer in the showroom will hurt the Flex more then help the Flex. This is only my opinion and we will have to watch sales figures this spring to see what is going on. I will say one thing though they need to be working on a Lincoln version of the Explorer right now because the MKT is not cutting it. I am sure someone will argue with me and say that the MKT has been successful, but I disagree. A 2011 Explorer with an attractive Lincoln restyle and an available Eco-Boost engine would do much better in the marketplace then the MKT. Quote Link to comment Share on other sites More sharing options...
BrewfanGRB Posted January 11, 2011 Share Posted January 11, 2011 They could at least try. I don't think I have seen a print or television ad for the Edge since about 6-8 months after it was launched. I'm sort of tuned into looking for Ford advertising, I saw quite a bit of the Edge about a month ago or so. Right, now lots of Explorer advertising. Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 11, 2011 Share Posted January 11, 2011 You put a lot of work into that post RMC. Here is what FordBuyer heard (as he hears from all of us): :blah: :blah: :blah: LOL, I dunno why I even bothered.....I was catching up on the entire thread, and his were the only posts I felt the need to comment on.......sad thing is, he's on my ignore list! Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted January 11, 2011 Share Posted January 11, 2011 It's gotta be far lower than it is for a vehicle like the Mustang, which really isn't selling a whole lot better right now. Big difference between 6,000-8,000 Mustangs/month and 2,000-2,500 Flexes/month pre-2011 Explorer. Not even close. I know...all Flexes sold sell for $40,000 and $28,000 Flex SE's are for show only. Quote Link to comment Share on other sites More sharing options...
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