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Is Ford leaving South and Latin America soon?


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I saw this coming.

 

Ford has gone from top 3 player in South America to a minor player outpaced by recent entrants like Hyundai and Honda. But I'm not sure why FCA or VW would want the business. They are both doing just fine as is and they don't need the extra manufacturing capacity. I can only see a Chinese car company buying Ford's South America operation. Chinese cars are making inroads in South America and one of the company could really use Ford's existing products and distribution network in vault itself into a credible player.

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I saw this coming.

 

Ford has gone from top 3 player in South America to a minor player outpaced by recent entrants like Hyundai and Honda. But I'm not sure why FCA or VW would want the business. They are both doing just fine as is and they don't need the extra manufacturing capacity. I can only see a Chinese car company buying Ford's South America operation. Chinese cars are making inroads in South America and one of the company could really use Ford's existing products and distribution network in vault itself into a credible player.

I'm Brazilian. Most Brazilians have a prejudice with Chinese cars. Several Chinese brands are experiencing trouble in Brazil. It would be better for Ford to give up or try to get back on his feet. I do not know how Ford Brasil is able to be so dumb as to maintain cars with powershift, after the huge negative repercussions of this gearbox in the media Edited by RadicalX
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Ford could move to a commercial and a premium brand position in South America as well. I don't think they will exit totally, but will move to a different place in the market.

 

It all depends on what the long term plan is with entry level cheap cars.

I get the feeling theyre leaving that to the Koreans and Nissan, not just here but globally except for key markets like India and China.
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What exactly would they be selling besides factories? They can't sell any of their IP to a 3rd party. Ford also has Troller in Brazil which is just a subsidiary, not sure how that would be handled.

Ford and VW have been linked to commercial vehicle agreements, sharing Ranger with VW as Amarok,

maybe Transit and Transit Connect too? perhaps some of VW's cars are shared with Ford....

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Many, many years ago, when Ford actually made profit in Brazil, there was no way to directly send that money back to Dearborn without incurring some very heavy taxes. Back then, the solution was to make radios and other simple electronics and sell them to Ford US at a loss. This worked well for a number of years until electronics got more complicated and required a much higher level of automation. Basically, Chinese manufacturing killed the whole idea.

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Ford could move to a commercial and a premium brand position in South America as well. I don't think they will exit totally, but will move to a different place in the market.

 

It all depends on what the long term plan is with entry level cheap cars.

 

South America is all about entry level cheap cars.

 

Ford can't crack South America for the same reason it can't crack Southeast Asia or India... its expertise is in larger cars and bigger trucks.

 

Ford did well in South America when the market was dominated by midsize sedans (Corcel in Brazil, Sierra in Argentina). It started to go south on Ford when the market moved to C-cars (Escort and then Focus). Now the market is basically just B-cars and Ford has struggled with Fiesta while competitors flooded the market with cheaper B-cars (some of them are downright scary death traps earning 0 or 1 start on NCAP). What worked for Ford was the original Ka, and later EcoSport. But it's likely that Ford never really made much money (if at all) on either.

 

Ford also has medium and heavy truck business in Brazil... I don't know if it is profitable.

Edited by bzcat
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South America is all about entry level cheap cars.

 

Ford can't crack South America for the same reason it can't crack Southeast Asia or India... its expertise is in larger cars and bigger trucks.

 

Ford did well in South America when the market was dominated by midsize sedans (Corcel in Brazil, Sierra in Argentina). It started to go south on Ford when the market moved to C-cars (Escort and then Focus). Now the market is basically just B-cars and Ford has struggled with Fiesta while competitors flooded the market with cheaper B-cars (some of them are downright scary death traps earning 0 or 1 start on NCAP). What worked for Ford was the original Ka, and later EcoSport. But it's likely that Ford never really made much money (if at all) on either.

 

Ford also has medium and heavy truck business in Brazil... I don't know if it is profitable.

The problem with Ford in Asia is that it's trying to sell decontented German designed cars and Utilities

without having a genuine appreciation of different needs and preferences of the region.and I suspect

that Brazil and South America in general is treated the same - a product of Mulally's One Ford.

 

So this is very much a case of Ford selling products it already has in other markets as opposed to

developing more specific vehicles for Brazil, Russia, India and China. instead of lumping them

together and saying Job done....but,

where is the Figo for South America?

why wasn't the Courier pick up renewed?

Where are the vehicles South Americans prefer?

Edited by jpd80
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Probably comes down to Ford's apparent preference to focus on higher profit vehicles (trucks and SUV/CUVs) vs the high volumes required to sustain a business case for lower profit vehicles (small sedans) the same way it seems to be planned for most if not all other markets. If any market can't support that plan then why even be there? The 600 lb gorilla is what happens when the economy goes into a recession (as it eventually always does) and fewer customers can justify those higher cost vehicles...

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Probably comes down to Ford's apparent preference to focus on higher profit vehicles (trucks and SUV/CUVs) vs the high volumes required to sustain a business case for lower profit vehicles (small sedans) the same way it seems to be planned for most if not all other markets. If any market can't support that plan then why even be there? The 600 lb gorilla is what happens when the economy goes into a recession (as it eventually always does) and fewer customers can justify those higher cost vehicles...

 

 

What it boils down to is pricing demands-Do you really think the Escape is all that more expensive to make vs a Focus? The Escape starts at almost $24K and has a 1K rebate plus 72 month interest free financing on it. The Focus starts at $18K and has a $4K rebate plus 0% 60 month financing on it-Not exactly a apple to apples comparison, but helps explain why they aren't making $$$ on a sub 20K product, unless its made overseas (at least I'm hoping with the Ecosport)

 

The only way a Focus would be profitable in the US is if they sold TI models like they where expecting to when it launched, but everyone instead went to SUVs...so why keep a money losing product when the market demands something else entirely?

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Probably comes down to Ford's apparent preference to focus on higher profit vehicles (trucks and SUV/CUVs) vs the high volumes required to sustain a business case for lower profit vehicles (small sedans) the same way it seems to be planned for most if not all other markets. If any market can't support that plan then why even be there? The 600 lb gorilla is what happens when the economy goes into a recession (as it eventually always does) and fewer customers can justify those higher cost vehicles...

 

I think Ford would be content with lower volumes on the higher priced, higher profit margin vehicles. Also a Focus Active doesn't have to be super expensive to be profitable. It won't be competing against regular Corollas and Civics so there won't be as much of a price war and they won't have to sell stripped down models to compete.

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I think Ford would be content with lower volumes on the higher priced, higher profit margin vehicles. Also a Focus Active doesn't have to be super expensive to be profitable. It won't be competing against regular Corollas and Civics so there won't be as much of a price war and they won't have to sell stripped down models to compete.

Assuming Trumps ridiculous trade war doesnt negate whatever profitability is gained by building it in China
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I dont either, but Ford does, or at least Hackett and crew.

 

That's today because the Mexican factories have not yet converted to C2. Once they're building C2 utilities in North America they should be able to easily add Focus or Fusion Active.

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What is missing is Ford Brasil is a medium SUV that runs on the Jeep Compass (model that is among the 10 best-selling cars in Brazil). It would be the Ford Escape, but that name is bad in Portuguese. Kuga would be another bad name. Ford seems to be creating an outlet for emerging countries. The Escape and the new Courier would be the salvation of Ford in Brazil. Remove Fiesta, Fusion, Edge and Focus. These cars don't sell anything in Brazil. The Fiesta was practically replaced by Ka

Edited by RadicalX
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