NickF1011 Posted February 14, 2012 Share Posted February 14, 2012 Combined they are profitable much like the D3s can solider by with the MKt and Flex selling in small volumes it is the economies of scales of the platform they are based on that makes them successful. global volumes of B cars make them doable. They are also imported from other plants that already produce them for other markets. To the best of my knowledge, Cuautitlan doesn't already produce the B-Max at this time. And honestly, I wouldn't be 100% certain that Toyota is making a dime on some of their worse-selling vehicles like the the Scion xD. Quote Link to comment Share on other sites More sharing options...
akirby Posted February 14, 2012 Share Posted February 14, 2012 Combined they are profitable much like the D3s can solider by with the MKt and Flex selling in small volumes it is the economies of scales of the platform they are based on that makes them successful. Question - what's the ATP of MKT and Flex compared to a B-car? Quote Link to comment Share on other sites More sharing options...
Biker16 Posted February 14, 2012 Author Share Posted February 14, 2012 (edited) Question - what's the ATP of MKT and Flex compared to a B-car? And that a great reason not to sell anything but pickup trucks. the Fiesta is proftible, not by much but it is. adding more expensive variants only increases the profitability of the Ford's B-car lineup. Assume that the ASP oft he B-max and Eco sport will be 3-4 grand more than the fiesta. If you take a second to realize that the Eco Sport is a CUV and will command a similar premium over the Fiesta as the Escape does over the Focus, it lowers the break even point for the model. The Eco sport will be produced in Brazil, and if ford wants to they could import the B-max from the lost cost plant in Romania. There are options to get these cars here. Edited February 14, 2012 by Biker16 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted February 14, 2012 Share Posted February 14, 2012 There are options to get this cars here. Nobody said there weren't but the question is what is the incremental benefit to Ford (considering it would also take some sales away from Fiesta and possibly Focus/Escape and C-Max) compared to the investment required? It's never a simple question of "will this vehicle be profitable". Quote Link to comment Share on other sites More sharing options...
Boss444 Posted February 14, 2012 Share Posted February 14, 2012 (edited) Falcon. Then ditch the Taurus. Edited February 14, 2012 by Boss444 1 Quote Link to comment Share on other sites More sharing options...
rkisler Posted February 15, 2012 Share Posted February 15, 2012 (edited) Nobody said there weren't but the question is what is the incremental benefit to Ford (considering it would also take some sales away from Fiesta and possibly Focus/Escape and C-Max) compared to the investment required? It's never a simple question of "will this vehicle be profitable". I normally agree with your posts, and this is no exception -- along with your previous post on capital allocation. It's not a question of "can we?", but "should we?" One thing that's missing from this string is what some of these products would mean from the sales/dealership perspective. In Europe, the market is generally smashed down in size compared to the U.S,. market (mainly due to fuel prices). Consumers are very keen on discerning the difference in sub-b, b, and c products. And they can tell the difference between, say, a Fiesta and a b-max. I contend that in the U.S,, to a large portion of buyers, they could't tell the difference amongst those products -- they're all small cars. If the volumes of a product are small, they don't get the advertising budget they might need, If volumes are small, they can end up being not in the showroom which has limited space, but rather "on the back 40" in the dealership and ignored or not ordered (I defer to deanh if he cares to comment). Let me put in a "however." You can't always be a follower because volume projections are based on what you know, and tend to ignore or downplay a new product that the public might latch on to. So there are some times one needs to take a guts pill and put a vehicle in the plan that might or might not catch on. With the increased emphasis on world-wide vehicles, the cost could be minimal to enter a new market (except I still have doubts on the b-max and side impact). I will say I just hate VW owning the diesel market and the wagon market, and I would like Ford to smash 'em in the nose. Very hard. Edited February 15, 2012 by Austin 3 Quote Link to comment Share on other sites More sharing options...
rkisler Posted February 15, 2012 Share Posted February 15, 2012 (edited) Oops. Went to edit and responded to my own post. Ignore Edited February 15, 2012 by Austin Quote Link to comment Share on other sites More sharing options...
akirby Posted February 15, 2012 Share Posted February 15, 2012 Let me put in a "however." You can't always be a follower because volume projections are based on what you know, and tend to ignore or downplay a new product that the public might latch on to. So there are some times one needs to take a guts pill and put a vehicle in the plan that might or might not catch on. With the increased emphasis on world-wide vehicles, the cost could be minimal to enter a new market (except I still have doubts on the b-max and side impact). I will say I just hate VW owning the diesel market and the wagon market, and I would like Ford to smash 'em in the nose. Very hard. Agreed. I was just trying to explain why Ford might decide not to bring a vehicle here for those who can't quite grasp the concept of running a business. I'd love for Ford to be in a position where they can do some niche products just for fun. I think they're close now that the next gen hybrids, PIHs and electric vehicles are almost out the door and Lincoln is on it's way. Quote Link to comment Share on other sites More sharing options...
Edstock Posted February 15, 2012 Share Posted February 15, 2012 With the increased emphasis on world-wide vehicles, the cost could be minimal to enter a new market (except I still have doubts on the b-max and side impact). I will say I just hate VW owning the diesel market and the wagon market, and I would like Ford to smash 'em in the nose. Very hard. Yes indeed. That's why IMHO, the B-Max and the EcoSport should be in North America. The B-C segment is so hot and so diverse, and along with VW, there's Hyundai/Kia. IMHO, Ford just has to be there in smaller-than-Escape sizes with something other than a Fiesta or Focus hatchback. Personally, the new Escape is bigger than what I need, either the B-Max or the ES will do fine with crappy city roads. 1 Quote Link to comment Share on other sites More sharing options...
SoonerLS Posted February 15, 2012 Share Posted February 15, 2012 Falcon. Then ditch the Taurus. That's what I'd like to see--drop the D3 sedans and replace them with RWD sedans. I have no illusions about that being realistic at this time, since the D3 sedans have the other D3s to subsidize their development, but that's still what I'd like to see. I like RWD, dammit! 1 Quote Link to comment Share on other sites More sharing options...
Biker16 Posted February 15, 2012 Author Share Posted February 15, 2012 (edited) Nobody said there weren't but the question is what is the incremental benefit to Ford (considering it would also take some sales away from Fiesta and possibly Focus/Escape and C-Max) compared to the investment required? It's never a simple question of "will this vehicle be profitable". your question cannot be answered in this forum. My qustion to you would be would you give up 7000 fiesta sales for 30,000 higher margin Bmax sales? Ford sold 68,000 fiestas in 2011, would you be okay with replaceing 10% of those sales with a sales of a higher margin vehicle? i would think you would want to, as long as it improves profits. would you risk selling fewer Focuses in order to raise the ASP of the focus. by your logic we should never risk selling any product that duplicates the function of another product, We should not sell the Flex becuase We have the explorer, or a minvan becuase we have the explorer, or my favorite never sell another performance coupe because we have the mustang. unless you know the investment required you cannot make an assumption on the potential motivations that determine the feasibility of a product. MY question is simple which product should Ford sell in the US, not based upon hypothetical ROI or crash-worthiness, but simply would it sell in the US. quantity to be sold is not important because we do not know the breakeven point of the products. price is irrelevant because we don't know the cost of production. so how can anyone but ford make go or no go for a product? Would the EcoSport sell in the US? would the B-max sell in the US? Would the C-max sell in the US? Without knowing the cost, it would be impossible to know what to sell and what not to sell. It is easier to say no to a product than yes. Edited February 15, 2012 by Biker16 1 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 15, 2012 Share Posted February 15, 2012 your question cannot be answered in this forum. would it sell in the US Dang. Hoist with his own petard. Quote Link to comment Share on other sites More sharing options...
akirby Posted February 15, 2012 Share Posted February 15, 2012 MY question is simple which product should Ford sell in the US, not based upon hypothetical ROI or crash-worthiness, but simply would it sell in the US. quantity to be sold is not important because we do not know the breakeven point of the products. price is irrelevant because we don't know the cost of production. so how can anyone but ford make go or no go for a product? Without knowing the cost, it would be impossible to know what to sell and what not to sell. Yet that's exactly the question you asked - which car should Ford bring to the states? Should Ford bring a car that brings down their profitability? It sounds like what you really MEANT to ask is which cars would consumers buy. But that's not what you asked. 1 Quote Link to comment Share on other sites More sharing options...
Biker16 Posted February 17, 2012 Author Share Posted February 17, 2012 Should Ford bring a car that brings down their profitability? there is no way to know how profitable and vehelce will or won't be. If you would have stated 5 years ago that the ASP of the 2012 focus would be $20,500 no one would have ever taken you seriously. things can change in way we cannot not forsee. It sounds like what you really MEANT to ask is which cars would consumers buy. But that's not what you asked. you are right. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted February 17, 2012 Share Posted February 17, 2012 there is no way to know how profitable and vehelce will or won't be. If you would have stated 5 years ago that the ASP of the 2012 focus would be $20,500 no one would have ever taken you seriously. things can change in way we cannot not forsee. So by that logic Ford should bring back the Excursion just in case gas drops to $1/gallon? Quote Link to comment Share on other sites More sharing options...
Biker16 Posted February 17, 2012 Author Share Posted February 17, 2012 So by that logic Ford should bring back the Excursion just in case gas drops to $1/gallon? no I am suggesting that no one on BON has the information needed to determine profitability of any potential product. It is a waste of time to argue about profitability when there are so many factors that determine profitability few of which are able to be ascertained by members of this forum. how is the Mustang profitable? how is the Ka profitable? how is the Falcon profitable? when making ASSumptions about costs you have to consider life cycle costs, and that there may not be a profit for an all new platform like GRWD for 5 years but because the life cycle of the architecture could last for decades,like Fox platform or the Falcon platform, we cannot simply make decisions based upon short or medium term ROI. We have debted the ROI of the Mondeo, 6 billion dollars spent on one car, but in relaity the 6 billion dollars paid for the retooling of 2 assembly plants, 2 new engine architectures, 2 trans-axles, and numerous other components and capital ininvestments still being utilized to this day,. Did the Mondeo have a good ROI? I would say it did, it just took over a decade to realize it,. there are too many unknown variables to determine the costs involved with these products. 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 17, 2012 Share Posted February 17, 2012 (edited) Providing products that fill perceived gaps gaps in a showroom (compared to others) is the realm of a car maker merely maintaining the status quo. Providing products that creates a new customer base is the realm of a company leading the competition...but only if it works... Edited February 17, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 17, 2012 Share Posted February 17, 2012 no I am suggesting that no one on BON has the information needed to determine profitability of any potential product. But we can project sales? If you object to predictions about profit, then don't ask for predictions about sales. Quote Link to comment Share on other sites More sharing options...
akirby Posted February 17, 2012 Share Posted February 17, 2012 but simply would it sell in the US. quantity to be sold is not important because we do not know the breakeven point of the products. price is irrelevant because we don't know the cost of production. That's the problem. If it can't turn a profit then Ford would never sell it here, so what customers want is totally irrelevant in that case. Now there are cases where you might take an initial loss on a vehicle but only if it provided some other strategic advantage (getting a foothold in an emerging market e.g.) or if it was part of a longer term strategy (such as meeting future CAFE). But even that is calculated as a net positive for the business. I honestly don't understand what you're trying to accomplish here. If quantity and price are irrelevant then I want a Porsche 911 GT3 RS. And a Ferrari 458 Italia. Quote Link to comment Share on other sites More sharing options...
Biker16 Posted February 17, 2012 Author Share Posted February 17, 2012 But we can project sales? If you object to predictions about profit, then don't ask for predictions about sales. you can try to anticipate demand, and possible sales, but with marginal products with no established market it is difficult to predict success, cost for a manufacture is must easier to determine than sales. There is also the intagibles of induced demand by brand association, I.E. Sales of the Matrix vs the Vibe. The Toyota brand and buyer can make or break a product. The fusion out sells the mazda6 by 10 to 1 or the focus vs the mazda3 2 to 1. It could also be brand identity that holds a product back, example could have been ford cars in the 90s. today with the success of the fiesta fusion and focus I thing ford could pivot towards MPVs like the B-max, C-max, and eventually a minivan. I think we can agree that the segment could use reinvention ford could do that IMO. 1 Quote Link to comment Share on other sites More sharing options...
Biker16 Posted February 17, 2012 Author Share Posted February 17, 2012 That's the problem. If it can't turn a profit then Ford would never sell it here, so what customers want is totally irrelevant in that case. Now there are cases where you might take an initial loss on a vehicle but only if it provided some other strategic advantage (getting a foothold in an emerging market e.g.) or if it was part of a longer term strategy (such as meeting future CAFE). But even that is calculated as a net positive for the business. I honestly don't understand what you're trying to accomplish here. If quantity and price are irrelevant then I want a Porsche 911 GT3 RS. And a Ferrari 458 Italia. i don't know what i am trying to do, i guess trying to anser the question why every threads on the ranger and every thread about a imagined product become a quagmire about theoretical profitability. When no one knows for certian what the profitability will would be. you are right, why should fordmake another GT? profitability concerns, can sometimes be used to hide laziness. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 17, 2012 Share Posted February 17, 2012 (edited) i don't know what i am trying to do, i guess trying to anser the question why every threads on the ranger and every thread about a imagined product become a quagmire about theoretical profitability. When no one knows for certian what the profitability will would be. you are right, why should fordmake another GT? profitability concerns, can sometimes be used to hide laziness. Laziness or stubborn conservative accountancy? Don't forget that corporate managers are legally bound to maximize profit of the companies they work for, Edit, It would be risky to invest in products without supportive research and a valid business plan.. Edited February 17, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 17, 2012 Share Posted February 17, 2012 theoretical profitability. We're discussing a business. At what point in time is profitability not a concern? When no one knows for certian what the profitability will would be And we know what sales volume will be? This is bizarre. You want wild speculation about sales, but not wild speculation about profitability? On what planet does that make sense? Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 17, 2012 Share Posted February 17, 2012 I think we can agree that the segment could use reinvention ford could do that IMO. The minivan segment needs a reinvention? I can't agree with that. What minivan customers are being poorly served by minivans on the market? It, like the full size truck segment, is incredibly competitive. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 18, 2012 Share Posted February 18, 2012 The minivan segment needs a reinvention? I can't agree with that. What minivan customers are being poorly served by minivans on the market? It, like the full size truck segment, is incredibly competitive. And the reason why Ford opted out of the minivan market and invested in other sectors, why knock yourself out producing low profit vehicles, invest in other sectors with better returns... Quote Link to comment Share on other sites More sharing options...
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