So Cars Don't Sell?

[Bob Rosadini]

Well it seems Ford for sure is on the "cars are history" bandwagon. Yet looking at the top 20 sellers list for March YTD I see the following cars and their respective position; No. 6 Toyota Camry, No 8.-Honda Civic, No.9 Honda CRV -(it is a car right?), No. 10 Toyota Corolla, No. 12 Nissan Altima, No. 13 Honda Accord, No. 14 Nissan Sentra, No. 20 Hyundai Elantra.

 

Good thing we have F series huh?

 

In Saturday's WSJ, Dan Neil covers the new Kia Stinger. This is a RWD 4 door that is in the $50,000 range, has a turbo V-6 that puts out 365 Hp and drives through an 8 speed auto. 0-60 @ 4.7 seconds and EPA numbers of 19/25/21. My sons were talking about this car today and one of them saw one last week that was parked next to a Maserati Quattroporte and the Kia for sure did not look like something that was half the price of the Maserati-at least in his opinion.

 

Now I guess this is Kia's "halo" car and the only thing that comes to my mind, is what COULD the SHO have been? Or the Continental for that matter. And when you look at the sales figures populated by these Japanese and one Korean car, I say-"Ford can't compete? No one wants a sedan?"

 

Apparently others-in particular Toyota- aren't quite ready to write off the sedan market. Since the "new" Taurus was introduced in 2010, how many new Camry's have we seen? How often do we see TV spots pushing Camry?

 

When Farley was lured away from Toyota, I thought he was going to put Ford back on the map in terms of cars. Or was that an Alan Mulally vision that left when he did? Or was Farley held back by Fields???

 

By the way, no argument that the suv/crossover tide is rising, but when you look at the respective success of those who hold the top 20 positions in terms of cars, you would hope that Ford could at least grab one or two of those spots.

 

And if anything, how often have we seen dramatic swings in the mood of the consumer? Seems like a balance in the product slate might be a good thing. But I know, a minority view and for sure history will not repeat itself or so Hackett, Barra, and Sergio hope as they are all reading the same script.

 

 

[akirby]

They’re not getting rid of Focus or Mustang, and Fusion is only going away because they don’t have enough factory space to launch all the new vehicles. Most of those car sales (CR-V is a crossover not a car) are cheap models with a lot of competition so even though there is a lot of volume, there isn’t a lot of profit compared to utilities, trucks, vans and luxury vehicles.

 

I think Ford screwed up by not being able to continue Focus and Fusion manufacturing in Mexico while still bringing in new models and for not updating those vehicles. But given where they find themselves I think they’re doing the right thing. And in the big picture it won’t hurt too much.

[Fgts]

I do note Toyota push their their cars in advertising as much as their trucks despite their market is mostly cars. GM somewhat push cars (mostly Chevy) in ads but domestics shortsighted push nothing but big, dumb trucks. FCA just won't do fwd cars anymore as the majority of their cars will remain rwd.

[jpd80]

Or maybe Ford should look at what Chrysler is achieving with Charger + Challenger + 300,

Last month, combined sales were over 22,000.

[snooter]

Throw a V8 in a fusion..not cause it makes any sense but because it would be cool.....take a few risks ford and surprise us...thinking many of us will buy your crap chinesse built cars is not the risk i am talking about though..

[coupe3w]

No Ford would rather build a $400+K Super car with a V6 and get its ass handed to it by $125+K Corvette ZR1.

[silvrsvt]

 

And if anything, how often have we seen dramatic swings in the mood of the consumer? Seems like a balance in the product slate might be a good thing. But I know, a minority view and for sure history will not repeat itself or so Hackett, Barra, and Sergio hope as they are all reading the same script.

 

 

 

Cars still sell but the market has been shrinking by 20-25% in the past 4 years

 

 

 

Even the stalwart Accord and Camry have seen 10-20% drop in sales.

 

Ford has always done well with its CUV and Truck offerings and they are going with what works with their customers that are buying them

 

And no increased gas prices aren't going to impact CUV sales as much as they did 10 years ago-People still bought 210K Explorers when gas was $4 bucks a gallon in 2014

[silvrsvt]

No Ford would rather build a $400+K Super car with a V6 and get its ass handed to it by $125+K Corvette ZR1.

 

 

In what way? Its a halo car that will 1000 of them made or so- not exactly the same market

[Fgts]

 

Cars still sell but the market has been shrinking by 20-25% in the past 4 years

 

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Even the stalwart Accord and Camry have seen 10-20% drop in sales.

 

Ford has always done well with its CUV and Truck offerings and they are going with what works with their customers that are buying them

 

And no increased gas prices aren't going to impact CUV sales as much as they did 10 years ago-People still bought 210K Explorers when gas was $4 bucks a gallon in 2014

The same excuse was used in the 00's, that don't mean you "white flag" your way out of car sales. The Rav4, CRV, Highlander, Rogue, etc will (if not already) Toyandasins best sellers but that doesn't mean they put-out POS or end production of CamCorders because Wall St. says so, the stupidity of pre-BK SUV Detroit is sinking back in. My hope for Ford is CD6 is what's it crack-up to be and offer affordable to desirable fwd/rwd sedans and coupes because not everyone want some "Fall-Guy" truck.

[Tico]

The Kia sports car is a niche product. Also to point out the obvious, it has less HP and costs more than a Mustang GT. When it sell more volume than Mustang call me otherwise what is the point of mentioning that car?

 

The comment about putting a V8 in Ford sedan misses the point. Mopars Sedans are long ago paid for and haven't been meaningfully updated in forever. They fill a niche but it is doubtful there is room for that niche to grow much. The sedans that are in the top 15 sellers are all basic appliances and are selling on three things: price, MPG and perceived quality / value. That is people who still buy sedans overwhelming do so because they cost a bit less than a similar crossover. They get a little better MPG. Finally they buy the Asian brands because of perceived quality over Detroit brands.

 

I am not sure what Detroit can do to be successful in that shrinking market. Taking on Camry/Corrola and Accords/Civic has always been tough. Now it is even harder as you have to spend the money to make a top quality, gas sipper, at cut throat prices, that you need to refresh often and try to make a profit when you are starting out as number 5 or 6 or way less in a shrinking market segment. Very difficult challenge.

 

Don't get me wrong, I like cars. I don't think most people need 4wd. I think some of the new tiny cross overs have so little room behind the back seat they are more like tall hatch backs than SUVs. But whatever, the world wants 4wd rectangles on wheels so be it. The best Detroit can do is make sure some of them get awesome MPG and have really stellar quality so they don't get caught with their pants down if political events cause gas prices to spike.

 

In the 1920s didn't everything look like rectangle on wheels? I am thinking Elliot Ness era. What's old and forgotten is now new and different again...

[Assimilator]

Cars sell...cheaply and to fleets.

[akirby]

The same excuse was used in the 00's, that don't mean you "white flag" your way out of car sales. The Rav4, CRV, Highlander, Rogue, etc will (if not already) Toyandasins best sellers but that doesn't mean they put-out POS or end production of CamCorders because Wall St. says so, the stupidity of pre-BK SUV Detroit is sinking back in. My hope for Ford is CD6 is what's it crack-up to be and offer affordable to desirable fwd/rwd sedans and coupes because not everyone want some "Fall-Guy" truck.

 

What you're missing is that they're not just stopping production of cars and building more SUVs. They're introducing new platforms and new vehicles at the same time which also includes Ranger and Bronco and a whole host of hybrids. You don't see Toyota making those kinds of changes in the same timeframe.

 

When you do that much stuff all at the same time and you're not building new factories, something has to give. It's not ideal but it's probably the right long term strategy.

[silvrsvt]

Cars sell...cheaply and to fleets.

 

 

Exactly- Automakers can up-charge Trucks and CUVs...and people will buy them still.

 

There is no demand for a sedan in the marketplace now. People buy them because they are cheaper or they got to fleets like you said.

[Fgts]

The Kia sports car is a niche product. Also to point out the obvious, it has less HP and costs more than a Mustang GT. When it sell more volume than Mustang call me otherwise what is the point of mentioning that car?

 

The comment about putting a V8 in Ford sedan misses the point. Mopars Sedans are long ago paid for and haven't been meaningfully updated in forever. They fill a niche but it is doubtful there is room for that niche to grow much. The sedans that are in the top 15 sellers are all basic appliances and are selling on three things: price, MPG and perceived quality / value. That is people who still buy sedans overwhelming do so because they cost a bit less than a similar crossover. They get a little better MPG. Finally they buy the Asian brands because of perceived quality over Detroit brands.

 

I am not sure what Detroit can do to be successful in that shrinking market. Taking on Camry/Corrola and Accords/Civic has always been tough. Now it is even harder as you have to spend the money to make a top quality, gas sipper, at cut throat prices, that you need to refresh often and try to make a profit when you are starting out as number 5 or 6 or way less in a shrinking market segment. Very difficult challenge.

 

 

In FCAs case they redoing all their full-size cars with one mid-size sedan on one platform. Turbo 4-6 for most people, V8s for the muscle crowd with all engines,electronics shared with the profitable SUV/trucks.

 

Detroit at this point can still run with their fwd cars and rwd sporty coupes/sedans and marry them with CUV platforms to cut development cost and run with it.

 

The imports still bang thier head to offer a Truck/SUV in the US to sell in those numbers but least they try, seems like Ford/GM really is giving up in cars.

[Assimilator]

FWIW, Jeep Compass and Renegade outsell Fiesta, Focus, and EcoSport combined with room to spare. We're talking about economy Jeeps outselling Ford cars now.

Edited April 9, 2018 by Assimilator

[fuzzymoomoo]

FWIW, Jeep Compass and Renegade outsell Fiesta, Focus, and EcoSport combined with room to spare.

IMO they sell on name, not because theres anything inherently better or worse about them

 

Also its not really fair to throw EcoSport in there yet, it hasnt been on sale here that long.

[akirby]

IMO they sell on name, not because theres anything inherently better or worse about them

Also its not really fair to throw EcoSport in there yet, it hasnt been on sale here that long.

I bet most of those Compass and Renegade sales are Jeep loyalists buying their kids’ first vehicles and/or folks buying cheap (assuming these are on the cheaper end of the market). Neither of which would really consider an upmarket Escape, Fiesta or Focus.

 

Being #1 in sales (or trying to be #1) isn’t always the best business decision. Ask 2007 GM.

[akirby]

Not to say Ford hasn’t dropped the ball here - clearly they have. But those Jeep sales numbers aren’t necessarily the result.

[fuzzymoomoo]

Being #1 in sales (or trying to be #1) isnt always the best business decision. Ask 2007 GM.

At least they finally have a CEO that understands that

[jpd80]

At least they finally have a CEO that understands that

Or at least allows his team to make the right decisions....

[akirby]

Or at least allows his team to make the right decisions....

 

Sounds like that's what hurt Ford before and after Mulally - allowing lower level managers to do their own thing.

[Assimilator]

I bet most of those Compass and Renegade sales are Jeep loyalists buying their kids’ first vehicles and/or folks buying cheap (assuming these are on the cheaper end of the market). Neither of which would really consider an upmarket Escape, Fiesta or Focus.

 

Being #1 in sales (or trying to be #1) isn’t always the best business decision. Ask 2007 GM.

 

 

It's unlikely that Fiesta and Focus could be considered "upmarket" in relation to the Jeep Utilities since the Ford economy cars are priced lower than the Jeeps. Actually, Fiesta and Focus offer the lowest price point in their class. EcoSport is somewhere in the middle at just under $20K, but Ford is also facing some overhead because of the Indian transit time. EcoSport probably doesn't have the volume potential of other competitors because it's such an unusual product in many ways, but they should be able to get it up to 6,000-8,000 monthly sales.

 

Ford has largely surrendered these economy car customers and will be shedding them fairly rapidly over the next year or two, but they've been able to do it fairly quietly since they've grown in other very profitable areas. Ford will probably look like the struggler for awhile because of flat or declining sales, but they are richer sales. I'm not sure in what way Ford will rebuild these customers but right now it's going to remain a low priority for a few more years until they have all their pieces in place and can start launching their economical utilities.

Edited April 9, 2018 by Assimilator

[jpd80]

 

Sounds like that's what hurt Ford before and after Mulally - allowing lower level managers to do their own thing.

As opposed to slowing down projects and delaying implementation of new products,

that was all on Fields interfering with projects already in the pipe....

 

Remember, Hackett challenged his senior staff to come up with the solutions themselves...

Edited April 9, 2018 by jpd80

[jpd80]

Toyota is already on record as expecting more of its Camry customers to move to RAV4

and is preparing to manage that transition in the next few years.

 

Toyota is not immune to change, just the last to feel the effects.

[fuzzymoomoo]

Or at least allows his team to make the right decisions....

Didnt know Mary Barra is a dude