Ford can't make money on small cars

[Joe771476]

For decades the auto companies were in bed with the oil companies. Now, the oil companies are Ford's worst enemy! Because of fixed cost such as labor, pension, medical etc., I don't think Ford makes anything on small cars. They probably lose money! If Ford sells 10 million small vehicles and loses $ .01 a piece, they lose! Like I said before, market share will adjust over time and Ford, GM and Toyota and the rest will have to be happy with a small percentage of the pie! There's simply too many players today. Toyota might overtake GM, but after that they won't gain much more. Eventually Toyota will have hit their peak! I hope they can handle it!

[jaydez]

I'm no expert here. But I think most companies make almost nothing if anythting at all on small cars. The reason they sell at a loss is to get repeat business. If the customer Likes the car and how they were treated during the life of the car then they will come back and buy a bigger one next time where the company will actually make money.

[DCK]

I'm no expert here. But I think most companies make almost nothing if anythting at all on small cars. The reason they sell at a loss is to get repeat business. If the customer Likes the car and how they were treated during the life of the car then they will come back and buy a bigger one next time where the company will actually make money.

Believe me Honda, Toyota and Nissan do not sell any vehicles at a loss. Especially Honda.

[NickF1011]

Believe me Honda, Toyota and Nissan do not sell any vehicles at a loss. Especially Honda.

 

Oh yeah...those Insights, Preludes, and NSX's were moneymakers all the way.

[IPITYDAFOOL VIRUSFREE]

Oh yeah...those Insights, Preludes, and NSX's were moneymakers all the way.

:angrymirror:

[Traveler]

More has to be implemented to improve truck and SUV sales for Ford and GM. Steps to deliver better fuel mileage and even perhaps alternative fuels like biodiesels, natural gas or hydrogen. Smaller, more efficient gasoline powered trucks and SUVs are a necessity as well. I think small hybrid SUVs would be a good idea to find greater mass appeal for Ford as well as a larger family sedan capable of using less considerably less gasoline.

 

Ford's bread and butter sedan sales look to have the company in trouble. Lots of people just figure that a Toyota or Honda is more innovative, more refined, more desirable, more power and gets better mileage. They see others flocking to them and they likewise want to be counted in with the majority. A guy I know has a Toyota Corolla 4 cylinder automatic and he said that he gets 35 mpg on the highway. Well, heck a Crown Victoria can get close to 30 mpg on the road and I'd much rather have something bigger. People have just bought into the myth that a large American car offers less quality, less reliability and gets less mileage than its Japanese counterparts. Its shameful that buyers will pay near sticker for a Camry, Accord or Civic and Ford and GM have to offer gimmicks like 0% financing, cash incentives and employee pricing just to even get consideration. Furthermore, people will practically buy cars like the Civic off the truck and a Fusion or Five-Hundred will have to sit on a dealer's lot for a few weeks.

 

Its the perception of Japanese superiority in the mainstream sedans along with foreign oil dependency and rising oil prices that are killing Ford and GM. If we can not depend upon our own petroleum resources, then I feel that we absolutely must become more reliant on alternative means of fuel and a means of delivering the fuel more conveniently to the American public.

Edited July 26, 2006 by Traveler

[Explorer4X4]

The Fusion is pretty good selling, and the Crown Victoria rules in the commercial sedan market (for now). But Ford probably sells more trucks and SUVs then smaller cars. Same with Chevrolet.

[wescoent]

The truck market isn't going anywhere, but Ford just needs to build better trucks. Ford is not going to sell as many trucks as it did in the 1990's, and needs to revise its cost structure to make everything much more homogenized and modular to save on cost. They need one frame for the Ranger, Explorer, Sport-Trac, and Mountaineer, and one frame for the F-150 and Expedition, and thats it. Their engine/transmissions need to be brought up to date as well. They need a 4.0L version of the 3.5L V6 for the Explorer, Ranger, and base F-150. They need a midlevel 4.6L motor with 300hp for all their trucks. They need an uplevel 5.4L V8 with 360hp. And finally, the 6.2L to replace the V10 and serve as an top-dog option for the F-150. They need a 4.4L diesel V8 for the F-150 and Expedition, and a V6 diesel for the Explorer and Ranger. And 6-speed automatics all around. And an optional, modular hydraulic launch assist system for use in all BOF vehicles.

 

Once Ford gets this base down, then they can just continually improve everything into the future, just like Toyota has done. Share as many parts as possible, so when one part is upgraded, all vehicles benefit from it.

[silvrsvt]

They need one frame for the Ranger, Explorer, Sport-Trac, and Mountaineer, and one frame for the F-150 and Expedition, and thats it.

 

Uh they are pretty much doing that already and it will be complete with the lanuch of the new F-150 in 2008/9

 

I also thought I read that the newish 05 Explorer was based off the T1 platform or shared parts of it.

 

The Ranger is the blackhole right now, but there are alot of rumors of a F-100 based on the current Explorer frame.

[ANTAUS]

I have read supposedly, that the Camry hardly makes a profit for Toyota. But they count on that vehicles to bring people in for the first time, with the hopes they'll buy something profittable thereafter. I believe this article was on Autoweek, maybe about a year, to a year and a half ago.

[Biker16]

For decades the auto companies were in bed with the oil companies. Now, the oil companies are Ford's worst enemy! Because of fixed cost such as labor, pension, medical etc., I don't think Ford makes anything on small cars. They probably lose money! If Ford sells 10 million small vehicles and loses $ .01 a piece, they lose! Like I said before, market share will adjust over time and Ford, GM and Toyota and the rest will have to be happy with a small percentage of the pie! There's simply too many players today. Toyota might overtake GM, but after that they won't gain much more. Eventually Toyota will have hit their peak! I hope they can handle it!

If they could sell cars at the prices the forgien comptition charge they would make money. The problem is that thye need more expensive small cars. Small CUV and MPV would more than makeup for the small profits of mainstream small cars.

 

there are 3 things for a US maker to profit on small cars.

 

Quality prodcuts

Diverse products

high-end features.

 

Quality products start with a quality modern archtechture. the archtechture sets the foundation for you benchmarks For NVH, ride, handing, performance, and allows for cost to be built in or built out, wher the consumer won't see it.

 

Diverse product spread your risks and afordablity allow for low-volume high profit products,with less risk if they fail. more importantly mainstream Sedans and coupes are mainstream and face alot of comptition and that lowers the profitabilty, the market for small CUV, has not been fully expolited, and the Small MPV hasn't been touched and the right product at the right time will explode that market. with extensive parts sharing and combined economies of Scale, you have a high low mix of products and hedged gaisnt a drastic change in customer tastes.

 

High-end Features are what will set your miantream products away from the competition, though a shared archtechture, you afordablity have features not normally found in small Car. Like AWD, ASC, Sat/NAV, engine technology, these options which cannot on alot of our comptition, will allow us to command a higher price, and more profitable mainstream small cars.

 

In the end Small cars will never be as profitable as larger cars. larger cars are the key to breaking the dependence on Trucks. we need lincoln to deliver, and expensive Ford and mercury cars to deliver the profit need to moderate the business cycle.

Edited July 26, 2006 by Biker16

[wescoent]

If they could sell cars at the prices the forgien comptition charge they would make money. The problem is that thye need more expensive small cars. Small CUV and MPV would more than makeup for the small profits of mainstream small cars.

 

there are 3 things for a US maker to profit on small cars.

 

Quality prodcuts

Diverse products

high-end features.

 

Quality products start with a quality modern archtechture. the archtechture sets the foundation for you benchmarks For NVH, ride, handing, performance, and allows for cost to be built in or built out, wher the consumer won't see it.

 

Diverse product spread your risks and afordablity allow for low-volume high profit products,with less risk if they fail. more importantly mainstream Sedans and coupes are mainstream and face alot of comptition and that lowers the profitabilty, the market for small CUV, has not been fully expolited, and the Small MPV hasn't been touched and the right product at the right time will explode that market. with extensive parts sharing and combined economies of Scale, you have a high low mix of products and hedged gaisnt a drastic change in customer tastes.

 

High-end Features are what will set your miantream products away from the competition, though a shared archtechture, you afordablity have features not normally found in small Car. Like AWD, ASC, Sat/NAV, engine technology, these options which cannot on alot of our comptition, will allow us to command a higher price, and more profitable mainstream small cars.

 

In the end Small cars will never be as profitable as larger cars. larger cars are the key to breaking the dependence on Trucks. we need lincoln to deliver, and expensive Ford and mercury cars to deliver the profit need to moderate the business cycle.

 

To be fair, Mazda has dipped its feet into the MPV market with the Mazda5, which has sold horrendously since launch. Ford is also contemplating bringing in a small minivan for 2010 to supplement the Fairlane, which leads me to believe we ARE getting the C2 Focus, with its C-Max variant being built on the same assembly line.

 

I'm of the opinion that Ford should stop trying to make the Focus the one-size fits all small car. They need to break that segment up into various specialty vehicles:

 

Fiesta- roomy, conventional small car picking up the cheapos who just want inexpensive, reliably, efficient transportation

 

Reflex- Ford 2+2 sports car slotting under the Mustang and Fusion coupe as a direct competitor with the Scion tC

 

Bronco- 5-place mini SUV slotting under the Escape, with available 4WD and priced alongside the Focus

 

Focus- upscale small car... basically the same as it is today, but moved upmarket a little bit

 

Ford also needs to make top-dog special editions to grab people's attention. A Focus and Fiesta RS rally-type car. A super-beefy offroading Bronco. An SVT Reflex with a big turbo. Something cheap and simple to make, but cool enough to get magazines and people talking about the cars.

[ANTAUS]

The Mazda5 has been selling horribly? I have a friend who just bought one, every lot we went to just had about 2-3 of them to choose from. Not many were willing to bargain, and no incentives applied towards it.

[silvrsvt]

The Mazda5 has been selling horribly? I have a friend who just bought one, every lot we went to just had about 2-3 of them to choose from. Not many were willing to bargain, and no incentives applied towards it.

 

The Mazda 5 has never had high expectations..I thought I read that Mazda was looking at only 20-25K sales a year in the US.

[swenson88]

The Mazda 5 has never had high expectations..I thought I read that Mazda was looking at only 20-25K sales a year in the US.

 

They must not have enough production capacity or something, I've never even seen an ad for one. I have seen a couple on the road, but if they were really concerned with selling them they'd be advertising them like they do the new CX-7.

[DRyanC]

They use to have commercials for the Mazda3 and 5 together. I see Mazda5 everywhere, up here in Canada that is. Alot less Maxtrix's, maybe evreyone jump there to get the extra seat

 

DryanC

[hofffam]

The truck market isn't going anywhere, but Ford just needs to build better trucks. Ford is not going to sell as many trucks as it did in the 1990's, and needs to revise its cost structure to make everything much more homogenized and modular to save on cost. They need one frame for the Ranger, Explorer, Sport-Trac, and Mountaineer, and one frame for the F-150 and Expedition, and thats it. Their engine/transmissions need to be brought up to date as well. They need a 4.0L version of the 3.5L V6 for the Explorer, Ranger, and base F-150. They need a midlevel 4.6L motor with 300hp for all their trucks. They need an uplevel 5.4L V8 with 360hp. And finally, the 6.2L to replace the V10 and serve as an top-dog option for the F-150. They need a 4.4L diesel V8 for the F-150 and Expedition, and a V6 diesel for the Explorer and Ranger. And 6-speed automatics all around. And an optional, modular hydraulic launch assist system for use in all BOF vehicles.

 

Once Ford gets this base down, then they can just continually improve everything into the future, just like Toyota has done. Share as many parts as possible, so when one part is upgraded, all vehicles benefit from it.

 

I agree with a few things you said - like build better trucks. But why does Ford need a 300hp 4.6 and a 360hp 5.4? Do current F150 owners say they want more hp? That won't improve mileage at all. I like the idea of 4L V6 as the base engine. I say no more hp at all. Improve efficiency and MAINTAIN hp and torque. If an F150 gets 3MPG better than a Silverado or Tundra at the same power, it will make a difference in the market.

 

Smaller diesels would be a winner. They gotta be quieter than the current one for SUV owners to drive them.

[waymondospiff]

To be fair, Mazda has dipped its feet into the MPV market with the Mazda5, which has sold horrendously since launch. Ford is also contemplating bringing in a small minivan for 2010 to supplement the Fairlane, which leads me to believe we ARE getting the C2 Focus, with its C-Max variant being built on the same assembly line.

 

As a very happy Mazda5 owner I feel I need to correct this. Mazda originally targeted 15-20K per annum and sales are on track for around 18-19K. Mazda knew it wasn't going to be a high-volume vehicle, but rather a more interesting "niche" auto that would drive sales (competes with what?) and cost very little (nearly identical to overseas markets' models and uses the same factory.)

 

Part of this low cost was minimal advertising, instead focusing ad dollars on "competitive" cars, such as the 3 & 6 and the upcoming CX-7 & CX-9. People are constantly asking about me about fuel economy, comfort, price, and room. Few people have believed me when they hear the answers: 23-27 mpg (a/c on, automatic, 50/50 city/hwy), sits like a van/suv, $20K, and cargo room on par with a midsize SUV. Thes types of vehicles, especially with gas prices at $3.00+/gal., have a huge potential in the future. If a "mainstream" manufacturer introduced a "C-Class Van" here in the US with a big dealer body & big ad push, they could move some serious volume.

 

I think Ford is missing a big opportunity to be the leader in the Compact People Mover market by not bringing the S-Max/Galaxy/C-Max to the US. Like Mazda, they already have paid for the development of the cars, unless the factories are running at 100%, why not import a limited number of S-Max/Galaxy/C-Max to the US and test the market. Even if they fail, how much is Ford out?

 

Scott

Edited July 27, 2006 by waymondospiff

[630land]

Toyota doesn't sell Corollas "high priced" or at sticker anymore.

 

Civics were going for cheap until the current re-design, and even at that, they don't command premium pricing.

 

With non UAW plants, low fixed costs, and importing, they can under cut Ford. If Ford brought the C1, H-T would still be cheaper, and no one would pay a higher price for a Ford compact.

Edited July 27, 2006 by 630land

[silvrsvt]

I think Ford is missing a big opportunity to be the leader in the Compact People Mover market by not bringing the S-Max/Galaxy/C-Max to the US. Like Mazda, they already have paid for the development of the cars, unless the factories are running at 100%, why not import a limited number of S-Max/Galaxy/C-Max to the US and test the market. Even if they fail, how much is Ford out?

 

I agree with you since Ford doesnt have a direct HHR/PT Cruiser type car in its line up. The biggest problem with Importing those Euro Spec vechciles is that in no shape or form can Ford sell them and make a profit with the way exchange rates are. Last time I checked it was a $1.25 to 1 Euro.

 

Thats why its so important that Wanye or the Brand new plant rumor in Texas gets the C2 come 2010 or so..then they would be able to sell them in the states.

Edited July 27, 2006 by silvrsvt

[630land]

So many think that in the blink of an eye, Ford can ship European or Aussie cars here to 'save them'. Forgetting about $$$$, labor, time, and reality.

 

Best thing they could do is make C1 Focuses in same Japanese plant that makes MZ3's. But CAFE laws force them to make small 'domestic' cars here, and the UAW keeps costs high. So what the F can they do?

 

Only if the US was a Socialist counrty that had 'state owned' plants and no imports allowed, maybe could sell more "domestic small cars". Then we would still have new Pintos to look at.

[Biker16]

So many think that in the blink of an eye, Ford can ship European or Aussie cars here to 'save them'. Forgetting about $$$$, labor, time, and reality.

 

Best thing they could do is make C1 Focuses in same Japanese plant that makes MZ3's. But CAFE laws force them to make small 'domestic' cars here, and the UAW keeps costs high. So what the F can they do?

 

Only if the US was a Socialist counrty that had 'state owned' plants and no imports allowed, maybe could sell more "domestic small cars". Then we would still have new Pintos to look at.

thats a defeatest additude, and is not based in truth.

 

It just mauch easier to ship something to Mexico, than to do the hard work needed to make a american made small car work.

 

BTW Does anyone think my plan won't work?

[Edstock]

"Then we would still have new Pintos to look at."

 

Hmmmm . . . you could do worse.

 

 

From http://www.mustangii.org/gallery/mikeparente/

 

The PANGRA was a dealer built Pinto sportscar created and marketed by Huntington Ford in Arcadia, CA. Dealer prepared cars were stock 1973 Pintos with modifications that included a fiberglass slantnose front end that was lower and 10" longer then a stock Pinto. The front end also featured pop-up headlights. The interior included Recaro bucket seats, wood steering wheel, and a custom center console with full gauges and a digital tach. A full "Can Am" suspension was added which lowered the car 3" and included Koni shocks, and front and rear sway bars. The real difference came under the hood with an AK Miller turbo charger and performance exhaust. The Pangra was also available in kit form and ledgend has it that even a few Pangra wagons were built by Pinto owners. Less then 200 original dealer prepared Pangras built. This is one of only a handful know to exist.

 

BTW, Ak Miller was a serious hotrodder that has faded to invisibility in Ford history.

[Aqeel Mahesri]

I have read supposedly, that the Camry hardly makes a profit for Toyota. But they count on that vehicles to bring people in for the first time, with the hopes they'll buy something profittable thereafter. I believe this article was on Autoweek, maybe about a year, to a year and a half ago.

 

This is completely wrong. In fact they make about $3000-$4000 on every one.

[Biker16]

This is completely wrong. In fact they make about $3000-$4000 on every one.

the dea;lers don't mkae money on the camry.

 

I dobut they make 3000 on each car.