Ford Motor Company March 2015 sales down 3%

[RichardJensen]

Now, I know that it's fashionable to talk about weight savings in press releases.

 

But, again, I would like to see someone demonstrate a correlation between curb weight and any metric that is meaningful either to companies or to customers.

 

Yes, there is a correlation between weight and fuel economy, but as sales figures demonstrate, and as P&L statements demonstrate, the significant (~15%) advantage that the 2015 Malibu has over the 2015 Fusion in average FE has not translated into either sales success, or by extension, greater profitability for the Malibu.

Edited April 7, 2015 by RichardJensen

[RichardJensen]

GM is going to sell more new Malibu and make an extra $1500 profit each

 

This seems to be an incredible reach on GM's part.

 

$1,500 represents 5% of an ATP of $30k.

 

I do not see a way for GM to easily obtain another 5% of net out of a car in this segment. In fact, it seems flatly impossible to deliver that kind of net margin increase in a segment this competitive.

 

--

 

I would also caution that a plant manager likely has a solid grasp on the gross margins his plant generates, but I would be surprised if he knew the net after adjusting for SG&A, as well as depreciation/amortization expensing.

 

Sales costs especially present issues where the ATP to revenue conversion is being masked by subvented financing (e.g. GM sells a vehicle for $70k but subvents the financing to the tune of 5% over 6 years).

 

I suspect that product line & plant level profitability is available to C-levels and eVPs and nobody else.

Edited April 7, 2015 by RichardJensen

[jpd80]

 

This seems to be an incredible reach on GM's part.

 

$1,500 represents 5% of an ATP of $30k.

 

I do not see a way for GM to easily obtain another 5% of net out of a car in this segment. In fact, it seems flatly impossible to deliver that kind of net margin increase in a segment this competitive.

I think the other shoe will drop when you read this passage:

 

LINK

GM declined to discuss forecasts, but last fall the company told analysts it was targeting 2016 sales of 225,000 Malibus a year.

Company officials say they expect the new Malibu to deliver $1,500 a car more profit than its predecessors. Taken together,

the projections indicate GM is hoping for at least $450 million in additional profit from the car, which will be formally unveiled

at the New York auto show next week. That profit would be equal to 41 percent of GM's most recent quarterly net income.

 

To win over skeptical consumers, GM's ads for the new Malibu will tout the car's quality, styling, fuel-efficiency, and a myriad

of safety and connectivity features.

 

GM's sales goals for the Malibu are important, because the car is a key piece of GM Chief Executive Mary Barra's strategy for delivering 10 percent

profit margins in North America, and return on capital of 20 percent globally.

An additional $450 million profit from Malibu each year?

I know that GM didn't directly say that but based on expected annual sales and expected profit increase per car,

it's only logical to assume that was what was behind the $1,500/car extra profit figures shorthanded to the press.

 

If any of this is true, it gives us a window into some very dubious and astonishing planning and accounting based on top

down executive goals to meet 10% return in North America.

 

One last thing, could GM possibly be including the effect of $1,500 less in incentives?

That seems to be the only way this plan works..

Edited April 7, 2015 by jpd80

[Edstock]

One last thing, could GM possibly be including the effect of $1,500 less in incentives?

That seems to be the only way this plan works..

 

That makes sense. Time will tell.

[jpd80]

 

That makes sense. Time will tell.

 

Thanks Ed, the other thing GM has not counted on is the internal competition with Impala,

and if GM gets this next Malibu right, I can see a lot of impala buyers switching over...

[RichardJensen]

If any of this is true, it gives us a window into some very dubious and astonishing planning and accounting based on top

down executive goals to meet 10% return in North America.

Geez. That is just depressing.

 

Tens of thousands of employees, paying their mortgages and buying their groceries based on the premise that the company that employs them is competently run.

 

 

 

 

 

 

And then you read this.

 

Geez.

 

 

Geez.

 

 

Their budget people think that they can simultaneously increase sales to 300k units and increase profit $1,500 per unit.

 

 

 

 

Geez. That's just terrible. That's just so irresponsible.

 

I mean those numbers look like they were taken directly off a cocktail napkin during a seven or eight martini lunch.

 

Geez.

[RichardJensen]

I have seen more realistic numbers on this forum.

 

I have seen a more competent view of the industry from people who work in IT, who live in Australia, or who suffer from other unnamed debilitating conditions.

[jpd80]

This is GM trying to be Ford without all the necessary ground wok...

 

Can we deduce that a similar thought process was applied to ATS and CTS?

 

Could explain a lot.....

Edited April 8, 2015 by jpd80

[Biker16]

 

I don't get it.

 

Of course you don't

[probowler]

I love months like this.... gives me some room to increase my F holdings... Keep it up (Down?) Ford!

[351cid]

 

Wow, I didn't realize the current Fusion is so porky. No wonder it's such a laggard when it comes to performance and fuel economy.

 

My 2010 Fusion SE has a curb weight of approx. 3,285 lbs.

My 2013 Fusion has a lifetime fuel average of 26 mpg. It's not too shabby in the stop light Gran Prix either. It does weigh 3760 with a full tank of fuel and me in the driver's seat (3520 without my 240 lbs). We have a certified truck scale on our property, so this isn't from any published weights. You should get an actual weight on your car.

 

Spend some time with a 2.0L Fusion before making these blanket statements. It's a great ride, and several folks that have ridden in mine sent them to Ford dealers to look at their next vehicle.

[RichardJensen]

Of course you don't

 

Again, is it possible for you to contribute to this board in a civil manner?

[Biker16]

"Hard choices?"

 

Which sells better? Malibu or Fusion? Obviously the customers appreciate the more refined feel and options of the Fusion.

 

the Altima weighs 3,177lbs and it outsells the Fusion.

[Biker16]

 

Again, is it possible for you to contribute to this board in a civil manner?

 

That was Civil.

 

why are you so uptight, it was a joke.

[RichardJensen]

If it's a joke, use an emoticon.

 

And given that your signature continues to display an out-of-context quote from me, you'll forgive me if I remain "uptight", per your standards.

[fuzzymoomoo]

 

the Altima weighs 3,177lbs and it outsells the Fusion.

It's been pretty well established that most of those sales are to fleets

[papilgee4evaeva]

the Altima weighs 3,177lbs and it outsells the Fusion.

 

It's been pretty well established that most of those sales are to fleets

 

Rental fleets, in particular. At least as of the end of '13 (the most recent data I can find for free), the Altima was sold more to rental fleets than every other midsize nameplate on the market.

Edited April 8, 2015 by papilgee4evaeva

[rmc523]

 

the Altima weighs 3,177lbs and it outsells the Fusion.

Doesn't Nissan fleet dump like crazy and run crazy low prices to bump up volume?

[Deanh]

rmc...YUUUUUUUUUUUUUUUUUP!......Altimas and Versa.....and lets not forget to mention due to their lack of noise suppression, read sound insulation ( keeps the curb weight down ) their road noise is atrocious....

Edited April 8, 2015 by Deanh

[Biker16]

If it's a joke, use an emoticon.

 

And given that your signature continues to display an out-of-context quote from me, you'll forgive me if I remain "uptight", per your standards.

 

so now its only a joke if an Emoticon is used?

[Biker16]

It's been pretty well established that most of those sales are to fleets

 

 

 

 

Rental fleets, in particular. At least as of the end of '13 (the most recent data I can find for free), the Altima was sold more to rental fleets than every other midsize nameplate on the market.

 

 

Doesn't Nissan fleet dump like crazy and run crazy low prices to bump up volume?

 

 

rmc...YUUUUUUUUUUUUUUUUUP!......Altimas and Versa.....and lets not forget to mention due to their lack of noise suppression, read sound insulation ( keeps the curb weight down ) their road noise is atrocious....

 

 

The Accord's curb weight is only 3,192 MT 3,254 CVT.

 

Sonata 3,252lbs

 

Camry 3,240lbs

 

Did I mention the hybrid Malibu will be rated at 47/47/47 mpg, which sounds really familiar.

 

EDIT!!

 

I forgot to add a

Edited April 8, 2015 by Biker16

[rmc523]

What are we even debating here?

 

Less weight = more sales?

 

 

How many generations of Accord owners are there that keep buying new ones? Obviously it's going to outsell Fusion.

Edited April 8, 2015 by rmc523

[Biker16]

What are we even debating here?

 

Less weight = more sales?

 

 

How many generations of Accord owners are there that keep buying new ones? Obviously it's going to outsell Fusion.

 

There is always an excuse, for why the Fusion is so heavy.

 

DYK the 2011 Mondeo Weighed closer to 3200lbs too.

[Deanh]

I don't know what we are debating...seems Biker is transfixed on curbweights while skipping over the fact that some get there in ways detrimental to driving experience, Mazdas are a scribes darling, but go drive one...road noise galore, me, Id rather HAVE a heavier car if its somewhat quieter and has superior NVH....could the fusion be lighter, probably, but at what cost?...also, Biker, cars have gotten heavier over the years for one reason....think a 2011 Mondeo would pass crash testing as well as a 2015 Fusion...standards seemingly change YEARLY...

[fuzzymoomoo]

My fiance's dad has a Mazda CX-5. It's not bad on the road noise front, and not much engine noise for being a manual either.