akirby Posted June 1, 2018 Share Posted June 1, 2018 As an example - a few years back Nissan put super lease deals on the Leaf using the tax rebates. I think you could lease one for $179/month with nothing down (or close to that). Add in not having to buy gas and it had to be the cheapest vehicle available at the time. A large community of a certain ethnicity near our old neighborhood leased them like crazy. You could drive 3 miles to the store and back and see 6-8 of them every time. Fast forward 3 years when those leases ran out and you hardly saw any at all because they were no longer the cheap transportation option. Loss leaders make sense in a store where you have a chance of selling other things in the same visit but that doesn't work well for cars. Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted June 1, 2018 Share Posted June 1, 2018 There’s no proof that “cheap” car buyers (and the Fusion is not a cheap car) are any more disloyal than buyers of more expensive vehicles. If they are, then Ford’s in trouble with their strategy of moving buyers upmarket as they will need to attract wealthier customers that are currently buying something else. There is actually a ton of data that proves this (Even when I worked at Ford 20 years ago, we had this data), it doesn't just apply to automobiles but general consumerism as well. Ford isn't in trouble and that is the reason they are going upmarket, mid to upper end of the market are more financially stable than the price consumer.(Some people are going to flip out because there is no $13,000 2wd regular Ranger, but that isn't a good customer) It is a very smart move for a developed market like the US and Europe, where you may not be the cheapest car, but you provide the best value to the consumer. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted June 1, 2018 Share Posted June 1, 2018 There is actually a ton of data that proves this (Even when I worked at Ford 20 years ago, we had this data), it doesn't just apply to automobiles but general consumerism as well. Ford isn't in trouble and that is the reason they are going upmarket, mid to upper end of the market are more financially stable than the price consumer.(Some people are going to flip out because there is no $13,000 2wd regular Ranger, but that isn't a good customer) It is a very smart move for a developed market like the US and Europe, where you may not be the cheapest car, but you provide the best value to the consumer. It's been a big issue in the cell phone market for years now. If you keep chasing those customers with cheap pricing you end up with lots of turnover because somebody at some point will have a better price and they'll leave you for the other guys and then you have to cut your margins even more to get them back. That type of churn on the low end of the pricing scale just isn't worth the effort for the larger players. They'd rather have a more stable base spending more money and giving them more value with bundles, etc. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted June 1, 2018 Share Posted June 1, 2018 (edited) They'd rather have a more stable base spending more money and giving them more value with bundles, etc. And that is something Ford still struggles with. Their option packages still don't make much sense and some are a little overpriced for what they are. Clearly they're trying to address it with this simplification they're trying with the 2019 Fusion. Hopefully they get it right and can apply it to the rest of the lineup effectively. Edited June 1, 2018 by fuzzymoomoo 1 Quote Link to comment Share on other sites More sharing options...
630land Posted June 1, 2018 Share Posted June 1, 2018 Someone looking for a "cheap sedan" can get an S model, usually discounted. Who looking for a cheap car would even look at the Titanium anyway? Quote Link to comment Share on other sites More sharing options...
akirby Posted June 1, 2018 Share Posted June 1, 2018 And that is something Ford still struggles with. Their option packages still dont make much sense and some are a little overpriced for what they are. Clearly theyre trying to address it with this simplification theyre trying with the 2019 Fusion. Hopefully they get it right and can apply it to the rest of the lineup effectively. That example was more about bundling other products, not just options. E.g. cell phone, home phone, internet and TV service. Makes you less likely to change your cell phone provider. The option bundling will help with dealer inventory and ordering for sure. Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted June 1, 2018 Share Posted June 1, 2018 (edited) And that is something Ford still struggles with. Their option packages still dont make much sense and some are a little overpriced for what they are. Clearly theyre trying to address it with this simplification theyre trying with the 2019 Fusion. Hopefully they get it right and can apply it to the rest of the lineup effectively. Will be interesting when the Edge order guide comes out in 2 weeks how they have changed it. I like the Fusion order guide seem to have improved some things with logic; you get heated mirrors and seats on the SE when you get AWD, some things are starting to make sense! Even BMW and Mercedes are drastically cutting configurations on their vehicles. While the new X3 looks to still have options and packages they have reduced combinations by almost 70%. I fully suspect the F-Series is going to go though a reduction as well, but I could see 20% of the available build combinations going away, or moving them just sold to customer orders not stock. Edited June 1, 2018 by jasonj80 1 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted June 1, 2018 Share Posted June 1, 2018 (edited) Will be interesting when the Edge order guide comes out in 2 weeks how they have changed it. I like the Fusion order guide seem to have improved some things with logic; you get heated mirrors and seats on the SE when you get AWD, some things are starting to make sense! but still have to go up a trim level for a heated steering whee and even then its AWD only. That is dumb. At least its standard on Titanium like it should be. Edited June 1, 2018 by fuzzymoomoo Quote Link to comment Share on other sites More sharing options...
Sevensecondsuv Posted June 1, 2018 Share Posted June 1, 2018 (edited) I'm not looking to buy a fusion, but if I was, I'd be annoyed that I can't get the heated mirrors and wheel without AWD. Why should I shell out the extra bucks and put up with reduced gas mileage, faster tire wear, increased number of maintenance parts, etc just because I like heated mirrors and wheel? It's not like a $400 set of snow tires won't allow a FWD fusion to confidently drive thru pretty much any road conditions I'll ever encounter in the lower 48... Edited June 1, 2018 by Sevensecondsuv 2 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted June 1, 2018 Share Posted June 1, 2018 I'm not looking to buy a fusion, but if I was, I'd be annoyed that I can't get the heated mirrors and wheel without AWD. Why should I shell out the extra bucks and put up with reduced gas mileage, faster tire wear, increased number of maintenance parts, etc just because I like heated mirrors and wheel? It's not like a $400 set of snow tires won't allow a FWD fusion to confidently drive thru pretty much any road conditions I'll ever encounter in the lower 48... You can.... On a Titanium 1 Quote Link to comment Share on other sites More sharing options...
snooter Posted June 1, 2018 Share Posted June 1, 2018 So, inspiration for pricing and marketing for ford products comes from the likes of worldcom and enron...got it..should be interesting going forward Quote Link to comment Share on other sites More sharing options...
akirby Posted June 1, 2018 Share Posted June 1, 2018 I'm not looking to buy a fusion, but if I was, I'd be annoyed that I can't get the heated mirrors and wheel without AWD. Why should I shell out the extra bucks and put up with reduced gas mileage, faster tire wear, increased number of maintenance parts, etc just because I like heated mirrors and wheel? It's not like a $400 set of snow tires won't allow a FWD fusion to confidently drive thru pretty much any road conditions I'll ever encounter in the lower 48... Probably because 80% of Fusions sold with heated steering wheels also had AWD (I'm just guessing but I think that's a reasonable guess for Northern buyers). They're just playing the odds. If you don't want to upgrade to a Titanium or get AWD then you can find another brand and they're ok with that. Quote Link to comment Share on other sites More sharing options...
Sevensecondsuv Posted June 1, 2018 Share Posted June 1, 2018 (edited) Probably because 80% of Fusions sold with heated steering wheels also had AWD (I'm just guessing but I think that's a reasonable guess for Northern buyers). They're just playing the odds. If you don't want to upgrade to a Titanium or get AWD then you can find another brand and they're ok with that. You're probably correct. Hard to find much of anything that isn't 4wd or AWD on dealer lots up here anymore. A few weeks back I was trying to find a co-worker a non-fleet-special 2wd F150 and they don't exist in dealer stock without going at least 500 miles south. It was a real eye-opener for me. I used to be part of the "4wd/AWD is mandatory for snow" crowd until I put a set of General Altimax Arctic tires on an old 2wd Ranger I had and it completely changed my mind on the matter. Now I just kinda feel sorry for all the people paying extra MSRP/gas/tires/maintenance for AWD that they don't realize they don't actually need. Edited June 1, 2018 by Sevensecondsuv Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted June 1, 2018 Share Posted June 1, 2018 Probably because 80% of Fusions sold with heated steering wheels also had AWD (I'm just guessing but I think that's a reasonable guess for Northern buyers). They're just playing the odds. If you don't want to upgrade to a Titanium or get AWD then you can find another brand and they're ok with that. I havent seen very many AWD Fusions around that arent wearing M plates. Quote Link to comment Share on other sites More sharing options...
Assimilator Posted June 1, 2018 Share Posted June 1, 2018 I've always felt they've long undersold the AWD capabilities of the Fusion, it's almost never noticed. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 1, 2018 Share Posted June 1, 2018 I've always felt they've long undersold the AWD capabilities of the Fusion, it's almost never noticed. Unlike Utilities, it doesn't seem to be a strongly desirable feature with car buyers. FWD is seen as enough with sales leaders like Camry and Accord, Quote Link to comment Share on other sites More sharing options...
630land Posted June 2, 2018 Share Posted June 2, 2018 Regarding the buyers looking for a "cheap sedan", there isn't much time. They'll have to get another brand or used Fusion soon. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 2, 2018 Share Posted June 2, 2018 With this upgrade but no 8-speed auto, Fusion will be staying for another year or so. Quote Link to comment Share on other sites More sharing options...
probowler Posted June 2, 2018 Share Posted June 2, 2018 (edited) Sure there is. Let's call them "value" shoppers. Value shoppers don't care about brands or features - they buy based almost strictly on cost. This means that they usually buy base models or lightly optioned models which don't provide as much profit for the mfr to begin with. On top of that they tend to shop sales and whoever has the most incentives or subsidized leases usually wins. So on top of selling a low end model to begin with you have to put cash on the hood. It's a race to the bottom going after those kinds of customers. For some mfrs who don't have the option of selling more high end vehicles (like Kia/Hyundai) that might be ok. Ford has good conquest numbers for their utilities and for the newer Lincolns, so attracting new buyers isn't a problem as long as you've got good products. The fallacy is thinking that selling a dirt cheap Focus or Fusion at a loss or break even gets you a future customer that will spend more money. It might in some cases but by and large that's not how it works. I think it's interesting that manufactures can't make a profit from those "value models". It's not free, or cheap to add all that extra wiring and equipment for various sensors, cameras, seat heaters, etc.... it costs money which costs ford . The stripper models lack all that, so shouldn't they be cheaper to build and thus still able to turn a profit? Or are auto manufacturers able to extract profit from these options far exceeding their manufacturing cost? And people that are just looking for a cheap car do nothing to improve the bottom line for a manufacture and are not loyal customers. They will just go buy the next cheap thing when they need a car. Which is totally fair game by Ford... I just don't think pretending it's not a price increase is the right wording, It is, and we should acknowledge that and explain why it's necessary to attract those upmarket buyers. Edited June 2, 2018 by probowler Quote Link to comment Share on other sites More sharing options...
SoonerLS Posted June 2, 2018 Share Posted June 2, 2018 I think it's interesting that manufactures can't make a profit from those "value models". It's not free, or cheap to add all that extra wiring and equipment for various sensors, cameras, seat heaters, etc.... it costs money which costs ford . The stripper models lack all that, so shouldn't they be cheaper to build and thus still able to turn a profit? Or are auto manufacturers able to extract profit from these options far exceeding their manufacturing cost? It probably doesn't cost all that much more to add the amenities of a high-end model over a base model; the difference is that the people buying the higher-end models are willing to pay for them. The people buying the Sally Rand Edition Fusion are are primarily buying on price--they either don't want or can't afford the options, so they're going to pay as little as they can. The folks buying the higher trims are more likely to say, "well, Momma wants that Sony stereo, and it doesn't move the needle on the payment, so Momma gets what Momma wants" and pay that extra $650. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted June 2, 2018 Share Posted June 2, 2018 There is a huge markup on those higher end options. Base price is what you advertise and that gets compared to other brands so they keep it as low as possible for advertising. The labor to build a Fusion S and a Titanium is close to the same. I’d be willing to bet that Ford makes several times more profit on a Titanium over a S. 1 Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted June 2, 2018 Share Posted June 2, 2018 I've always felt they've long undersold the AWD capabilities of the Fusion, it's almost never noticed. They do in some markets, Denver, Pittsburgh, upstate ny. Part of the problem is that dealers dont stock the units in a lot of other areas, and the few that do load it up on titaniums with everything, rather than an SE with a few options. They do stock those type of units in the mentioned markets and they do sell. Quote Link to comment Share on other sites More sharing options...
ice-capades Posted June 3, 2018 Share Posted June 3, 2018 The SE AWD is a very good seller at a very reasonable price point. The problem is getting them scheduled! Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 3, 2018 Share Posted June 3, 2018 The SE AWD is a very good seller at a very reasonable price point. The problem is getting them scheduled! Is it more a snow belt specific car? Quote Link to comment Share on other sites More sharing options...
ice-capades Posted June 3, 2018 Share Posted June 3, 2018 Is it more a snow belt specific car? Maybe but we're also in a market that has very strong Subaru sales. Quote Link to comment Share on other sites More sharing options...
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