bzcat Posted July 31, 2018 Share Posted July 31, 2018 Good article summarizing how Detroit 3 is losing ground on CUVs like they did with cars. It specifically singled out Ford for not adding more capacity to Escape, something I've been saying for a long time on these forums. To Ford's credit, it is adding more CUV nameplate in the near future. But the article put in very clear term what I've been saying for many years. Honda is about to add a 4th CR-V production line in North America... plus the ability to ship in more from Japan. Meanwhile Ford still not sure if it wants to add a second line in Mexico and continues to have problem sourcing enough Escape to sell in a market that can clearly support probably 20~25% more volume. A bit of a caution on the article... it doesn't explain what the analyst used as criteria for "crossover". For example, did he consider Explorer or Grand Cherokee? https://www.bloomberg.com/news/articles/2018-07-31/after-car-collapse-detroit-is-losing-more-ground-in-crossovers The advertisements were for crossover vehicles that are crucial to automakers’ success in the U.S., with consumers buying them in droves at the expense of sedans. GM was dangling a hefty 18 percent discount on most Buick Encore models. Ford was hitting back with an ad in which the narrator opened: “Considering Buick Encore? You should look at the all-new Ford EcoSport.” But the dueling commercials highlighted an all-too-familiar story. In a sequel to Detroit’s virtual capitulation of the still-sizable U.S. passenger-car market, GM and Ford are trying to pick off one another’s customers as they struggle to go toe-to-toe with the likes of Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. The ground they’re giving up to Japanese automakers now is with the crossovers that boast better handling and fuel economy than truck-based sport utility vehicles. ~~~ “The Asians and the Europeans are taking over crossovers in the U.S. by adding new models and more manufacturing capacity. They did the same thing in cars 10 or 20 years ago,” he said. “In Detroit, this puts even more pressure on trucks.’’ ~~~ As Detroit automakers come to grips with the softening market, models like the Ford Escape illustrate their uphill challenge. An assembly plant in Louisville, Kentucky, is the company’s lone source of the crossover model for North America, with the capacity to build about 350,000 a year, Baum said. Honda, by contrast, is about to have four North American plants building its CR-V model. The company gets about 200,000 units annually from each of its factories in East Liberty, Ohio, and Alliston, Ontario. About 70,000 are built in Greensburg, Indiana, and its plant in Marysville, Ohio, will chip in an additional 40,000 units a year starting next month. All those plants add up to capacity for more than half a million CR-Vs a year in North American factories that also produce a smorgasbord of other models -- and can adjust relatively quickly as consumer tastes evolve. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted July 31, 2018 Share Posted July 31, 2018 Well yeah, the big 3 are too stupid to break out of the stupid battle amongst themselves instead of acknowledging the Asians as actual competition, then cry and bitch when all of a sudden their market share is half of what it once was. 1 Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted July 31, 2018 Share Posted July 31, 2018 Well yeah, the big 3 are too stupid to break out of the stupid battle amongst themselves instead of acknowledging the Asians as actual competition, then cry and bitch when all of a sudden their market share is half of what it once was. That's what happens when you have a bunch of people that sit around and stroke the 60 year old executive who has never left Ford and don't want to upset him; telling him that GM/FCA is only your competition in Full size trucks. Every other segment you're in it is the Asians. The Asians are making huge in roads in Europe as well. You almost never saw an Asian car and now it seems like every other new one is one. It also helps that the Finance people don't run Asian companies the way they do American ones. No one at Honda would go "well it is the last year of the CR-V, lets eliminate the LED taillights and save a dollar on each unit". But someone made their cost cutting goal at Ford so they did it. The new Escape better be an amazing vehicle and about the size of the Current CR-V/Mazda CX-5 if it hopes to stand up. Lately the Asians seems to be doing more updates year to year than Ford/GM do at a MCE. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted July 31, 2018 Share Posted July 31, 2018 While I agree Ford and GM are a little behind, they’re certainly not ignoring crossovers. But Ford has other more important things that they have to invest in like F150, F250, F350, F450, etc. etc. plus Ranger, Bronco, Transit, Transit Connect, Explorer/Aviator and Expedition/Navigator. All of those stand to generate a lot more profit than a RAV4. And Toyota only has a couple of contenders in those segments and they’re not that important. The same is true for the Korean brands too. Cars and crossovers are their main business - of course they’re more focused on those products. Since the US truck market is growing, why aren’t they making the same statements about the Asian and European brands not keeping up with the domestics on trucks? Typical double standard. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted July 31, 2018 Share Posted July 31, 2018 (edited) A bit of a caution on the article... it doesn't explain what the analyst used as criteria for "crossover". For example, did he consider Explorer or Grand Cherokee? Baum and Associates categorizes any SUV or SUV like vehicle that's not truck based as a crossover. Based on their definition, current generation Explorer and Grand Cherokee are both crossovers. Edited August 3, 2018 by rperez817 Quote Link to comment Share on other sites More sharing options...
Deanh Posted July 31, 2018 Share Posted July 31, 2018 hmmmm, criticized for "leaving" the sedan market...and criticized for not having enough CUVs.... Quote Link to comment Share on other sites More sharing options...
rperez817 Posted July 31, 2018 Share Posted July 31, 2018 (edited) Since the US truck market is growing, why aren’t they making the same statements about the Asian and European brands not keeping up with the domestics on trucks? Typical double standard. No double standard sir. Those two segments are very different in terms of current players and barriers to entry for new players. Crossover market in the U.S. is extremely competitive and broad. Every automotive brand with a presence here has at least 1 crossover offering. Competition will only intensify in the coming years. By contrast, U.S. pickup truck market is narrow and distorted due in large part to chicken tariff and decades of domination by GM and Ford. Only 6 automakers offer at least one pickup truck model in the U.S. 2 domestic and 4 foreign. Only 1 company without a current pickup truck offering is planning to introduce one in the next few years, Tesla. Until chicken tariff is repealed, Asian and European automakers other than the 4 already here (Nissan, Toyota, Honda and FCA) aren't going to bother introducing new pickup truck models here. Edited July 31, 2018 by rperez817 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted July 31, 2018 Share Posted July 31, 2018 (edited) Good article summarizing how Detroit 3 is losing ground on CUVs like they did with cars. It specifically singled out Ford for not adding more capacity to Escape, something I've been saying for a long time on these forums. To Ford's credit, it is adding more CUV nameplate in the near future. But the article put in very clear term what I've been saying for many years. Honda is about to add a 4th CR-V production line in North America... plus the ability to ship in more from Japan. Meanwhile Ford still not sure if it wants to add a second line in Mexico and continues to have problem sourcing enough Escape to sell in a market that can clearly support probably 20~25% more volume. A bit of a caution on the article... it doesn't explain what the analyst used as criteria for "crossover". For example, did he consider Explorer or Grand Cherokee? https://www.bloomberg.com/news/articles/2018-07-31/after-car-collapse-detroit-is-losing-more-ground-in-crossovers There's a bit of flawed logic in all of this criticism of Ford not increasing Escape production, they actually dd that a few years ago to the point where Lousiville is now capable of producing over 41,000 combined Escape and MKC per month even though sales of Escape rarely exceed 30,000 a month. Adding to this is Escape's 1 July inventory was 70,400. Ford does have a plan to increase production and sales compact Utilities, it's just that some in the media aren't paying attention. Edited July 31, 2018 by jpd80 1 Quote Link to comment Share on other sites More sharing options...
92merc Posted July 31, 2018 Share Posted July 31, 2018 No double standard sir. It's a double standard in that they are only reporting where the Big three are falling short. Where is the report on how the Asians have NOT taken over the bigger SUV or pickup markets? Where is the article on how they are falling behind and falling much shorter than the Big 3? The article is a worthwhile kick in the pants to Ford. They should have done more in the Escape refresh. But what's done is done. Ford better move forward with the CUV's like we've been rumoring for awhile. 1 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted July 31, 2018 Share Posted July 31, 2018 (edited) That's what happens when you have a bunch of people that sit around and stroke the 60 year old executive who has never left Ford and don't want to upset him; telling him that GM/FCA is only your competition in Full size trucks. Every other segment you're in it is the Asians. The Asians are making huge in roads in Europe as well. You almost never saw an Asian car and now it seems like every other new one is one. It also helps that the Finance people don't run Asian companies the way they do American ones. No one at Honda would go "well it is the last year of the CR-V, lets eliminate the LED taillights and save a dollar on each unit". But someone made their cost cutting goal at Ford so they did it. The new Escape better be an amazing vehicle and about the size of the Current CR-V/Mazda CX-5 if it hopes to stand up. Lately the Asians seems to be doing more updates year to year than Ford/GM do at a MCE. The full size truck market is a terrible example though. GM and FCA are the only competition, especially in the 2500/3500 class. Toyota and Nissan have both tried (especially Toyota) and barely made a dent, and neither has a HD offering. And dont give me the a Titan XD, thats not a true HD truck. Edited July 31, 2018 by fuzzymoomoo Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted July 31, 2018 Share Posted July 31, 2018 (edited) No double standard sir. Those two segments are very different in terms of current players and barriers to entry for new players. Crossover market in the U.S. is extremely competitive and broad. Every automotive brand with a presence here has at least 1 crossover offering. Competition will only intensify in the coming years. By contrast, U.S. pickup truck market is narrow and distorted due in large part to chicken tariff and decades of domination by GM and Ford. Only 6 automakers offer at least one pickup truck model in the U.S. 2 domestic and 4 foreign. Only 1 company without a current pickup truck offering is planning to introduce one in the next few years, Tesla. Until chicken tariff is repealed, Asian and European automakers other than the 4 already here (Nissan, Toyota, Honda and FCA) aren't going to bother introducing new pickup truck models here. Do you honestly believe that Tesla is capable of launching a full size truck in both a timely manner and profitably? Edited July 31, 2018 by fuzzymoomoo 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted July 31, 2018 Share Posted July 31, 2018 Do you honestly believe that Tesla is capable of launching a full size truck in both a timely manner and profitably? Profitably, yes. Timely manner, not so sure. I think that will depend on how well they sort out production issues with Model 3 and launching Model Y. Tesla hasn't yet announced a firm time frame for when their pickup truck will go into production. I'm guessing it won't happen before 2020. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted July 31, 2018 Share Posted July 31, 2018 (edited) Producing a full sized Electric truck is not the problem, it's the infrastructure that's needed once those trucks begin leaving the plant. Edited July 31, 2018 by jpd80 Quote Link to comment Share on other sites More sharing options...
bzcat Posted July 31, 2018 Author Share Posted July 31, 2018 (edited) hmmmm, criticized for "leaving" the sedan market...and criticized for not having enough CUVs.... Car company the size of Ford should be able to walk and chew gum at the same time. Ford is slow to add CUVs, that's not up to debate. Ford misread the market on C-Max and allowed competitors to fill the short C CUV segment; Ford bungled the EcoSport in both timing and design and now playing desperate catch up; and Ford passed on midsize 7 seat CUV and allowed Toyota and Hyundai to expand in the segment. Ford has made some good decisions also... switching Explorer from SUV to CUV, selling 5 seat midsize CUV (Edge) when the market was unproven, pioneering hybrid SUV (Escape hybrid) etc. But I think we can agree that for the most part, Ford is playing defense in these area. We have yet to see the offense. Let's see what CD6 Explorer, CX430, CX758, and new EcoSport will do... But the point of the article is that Asian and European competitors have already added those models and filled those niche and becoming big and dominant in CUVs like they did with cars. Edited July 31, 2018 by bzcat Quote Link to comment Share on other sites More sharing options...
jcartwright99 Posted July 31, 2018 Share Posted July 31, 2018 (edited) The last sentence of the article was ridiculous. “Detroit isn’t any less dependent on pickups now than it was in 2007,” Noble said. “Pickups are great when America is booming, but they’re horrible in a downturn.” Excuse me!!! I'm pretty sure in the last recession that the Toyota Camry didn't top the F series in production. Everyone took a hit, but full sized trucks still sold in higher volumes. Full size trucks equals more margin than a Camry. The fact that the writer doesn't understand that Toyota and Nissan have both tried and failed (both multiple times) to make even the slightest dent in the full size market. Yet, the big 3 (2.5) easily retain their dominant market shared is completely ignored. People buy full size trucks in this country, period. I don't know exactly why but they do and I don't see that changing anytime soon. If anything, this writer could say the Asian makers are missing out on the biggest profit generators in the auto industry but that wouldn't follow the narrative they are trying to convey. Edited July 31, 2018 by jcartwright99 Quote Link to comment Share on other sites More sharing options...
akirby Posted July 31, 2018 Share Posted July 31, 2018 If Nissan and Toyota can do it then so can the others. I'm not saying they should or that it's a problem they don't, just pointing out that Ford and GM aren't just sitting idly - they're aggressively investing in their truck, van and commercial businesses. It's just as valid to say that the Asian brands weren't aggressively pursuing the growing truck and full sized SUV market as it is to say the same about Ford and GM not aggressively pursuing crossovers. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted July 31, 2018 Share Posted July 31, 2018 Profitably, yes. They haven't yet made a profit on vehicle production. Why do you think trucks will be different? 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted July 31, 2018 Share Posted July 31, 2018 The full size truck market is a terrible example though. GM and FCA are the only competition, especially in the 2500/3500 class. The point is Ford and GM and FCA are investing HEAVILY in trucks and vans because they're profitable. The Asian brands are investing more in cars and crossovers because that's where their profits are. Quote Link to comment Share on other sites More sharing options...
jcartwright99 Posted July 31, 2018 Share Posted July 31, 2018 If Nissan and Toyota can do it then so can the others. I'm not saying they should or that it's a problem they don't, just pointing out that Ford and GM aren't just sitting idly - they're aggressively investing in their truck, van and commercial businesses. It's just as valid to say that the Asian brands weren't aggressively pursuing the growing truck and full sized SUV market as it is to say the same about Ford and GM not aggressively pursuing crossovers. Absolutely agree! I would also say, that Ford hasn't ignored CUV's. Are some getting old and not class leading. Yes. Are we going to see those being replace soon. Yes. The only area I see them as being a laggard was with the EcoSport. The should had that on the market 3 years ago. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted July 31, 2018 Share Posted July 31, 2018 They haven't yet made a profit on vehicle production. Why do you think trucks will be different? Sandy Munro did a teardown analysis of Tesla Model 3 and says it should deliver 30% net profit. That's for a sedan EV. A Tesla pickup truck should be even more profitable. https://electrek.co/2018/07/16/tesla-model-3-teardown-profitability/ Quote Link to comment Share on other sites More sharing options...
rmc523 Posted July 31, 2018 Share Posted July 31, 2018 Sandy Munro did a teardown analysis of Tesla Model 3 and says it should deliver 30% net profit. That's for a sedan EV. A Tesla pickup truck should be even more profitable. https://electrek.co/2018/07/16/tesla-model-3-teardown-profitability/ That's great.....except they're not making money... 2 Quote Link to comment Share on other sites More sharing options...
jcartwright99 Posted July 31, 2018 Share Posted July 31, 2018 Sandy Munro did a teardown analysis of Tesla Model 3 and says it should deliver 30% net profit. That's for a sedan EV. A Tesla pickup truck should be even more profitable. https://electrek.co/2018/07/16/tesla-model-3-teardown-profitability/ I would bet that if Tesla last long enough to actually make a pick-up, they will end up like the Tundra and Titan. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted July 31, 2018 Share Posted July 31, 2018 (edited) The last sentence of the article was ridiculous. “Detroit isn’t any less dependent on pickups now than it was in 2007,” Noble said. “Pickups are great when America is booming, but they’re horrible in a downturn.” That sentence from consultant Eric Noble is absolutely correct. Several economists say that in the U.S., pickup truck sales are an unofficial barometer of the economy. Cars.com said "When the economy is healthy, contractors, landscapers and other businesses that carry tools and cargo have more business. The better they’re doing, the quicker they are to expand fleets or replace aging trucks with new ones. The more homes getting built, heating and cooling systems installed or lawns landscaped, the more these companies will need trucks for the jobs." The reverse is true in an economic downturn. Less business = fewer new pickup trucks sold. Plus, a lot of the new pickup trucks sold these days are high-end models bought by people who don't need one. They're big boy toys. When the next economic downturn hits, a lot of those personal use status seeking pickup truck buyers are going to resell them. Many will switch to regular cars and crossovers. Sales trends of popular cars and pickup trucks in U.S., from 2004 (healthy economy) to 2009 (recession). Ford F-150, down 56% Chevy Silverado, down 54% Toyota Camry, down 16% Honda Civic, down 16% Edited July 31, 2018 by rperez817 1 Quote Link to comment Share on other sites More sharing options...
rmc523 Posted July 31, 2018 Share Posted July 31, 2018 That sentence from consultant Eric Noble is absolutely correct. Several economists say that in the U.S., pickup truck sales are an unofficial barometer of the economy. Cars.com said "When the economy is healthy, contractors, landscapers and other businesses that carry tools and cargo have more business. The better they’re doing, the quicker they are to expand fleets or replace aging trucks with new ones. The more homes getting built, heating and cooling systems installed or lawns landscaped, the more these companies will need trucks for the jobs." The reverse is true in an economic downturn. Less business = fewer new pickup trucks sold. Plus, a lot of the new pickup trucks sold these days are high-end models bought by people who don't need one. They're big boy toys. When the next economic downturn hits, a lot of those personal use status seeking pickup truck buyers are going to resell them. Many will switch to regular cars and crossovers. Sales trends of popular cars and pickup trucks in U.S., from 2004 (healthy economy) to 2009 (recession). Ford F-150, down 56% Chevy Silverado, down 54% Toyota Camry, down 16% Honda Civic, down 16% Maybe cars are hit less, but they're still not as profitable. 1 Quote Link to comment Share on other sites More sharing options...
92merc Posted July 31, 2018 Share Posted July 31, 2018 Getting back on topic, the one area I don't get with the Escape sized market is how none of them compare to the 2.0 EB torque Ford has with their engine. As an Escape owner, I love the torque of my 2.0EB. The only vehicle I've seen come close to that power in this size of a vehicle is the new BMW X3. And that's from a full V6 sized engine. And that CUV costs a lot more than Ford. To me, I'd rather spend the money on a Lincoln with the 2.3EB. 1 Quote Link to comment Share on other sites More sharing options...
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