Ford CEO Jim Farley Says Company Lost Billions on Sedans

[joseodiaga4]

19 hours ago, The Handler said:

Lincoln needs something more interesting and exciting than another front-drive sedan. Maybe they need to dip their toes into performance. How about a supercharged 6.8L in the Navigator? lol

I think that they should use the 5.8l in the Navi to have a Escalade V competitor, just to bring some excitement lol

[ice-capades]

1 hour ago, akirby said:

As a 2013 Fusion Titanium owner I agree it was a great vehicle.  Only downside was weight and mpg compared to the imports.  The problem was not many people were willing to pay a premium for a Titanium.  I hardly ever saw another Titanium model.  They were 90% cheap SE models.  Same for Escape.  Nothing but SEs.  Cheap transportation.

 

BMW’s heritage is performance cars.  Lincoln’s heritage is Town Cars.  BMW and MB are mfrs.  Lincoln is a small division of Ford.  Huge difference in resources and potential buyers.  

 

BMW's heritage is performance cars? Really? 

[akirby]

12 minutes ago, ice-capades said:

 

BMW's heritage is performance cars? Really? 

Absolutely starting with the 02 series in 1966 followed by 3 series and M models.

[brucelinc]

10 minutes ago, akirby said:

Absolutely starting with the 02 series in 1966 followed by 3 series and M models.

 

Yeah, I would say their heritage is performance...specifically sharp handling.   They promote their vehicles as "ultimate driving machines."    That moniker does not apply to all of their products, anymore.    My 5 series does handle well but I was most impressed with the soft ride and how quiet interior was compared to my Continental.   Many BMW purists are not so happy with the direction BMW has taken with some of their models.   I would not have considered a BMW of 30 or so years ago.   My boss had a 7 series back then and it was as harsh riding as a truck.   

[Andrew L]

I can think of 1 heritage BMW that does not fit that bill  🤪

 

[twintornados]

So, how much did Ford lose on mini-van sales.

[jpd80]

With regards to  Farley’s claim of Ford losing billions on sedans in North America, that would be more believable if Ford had more than just a few of them. Between 2011 and 2020, they mainly had Americanised versions Fiesta, Focus and Mondeo plus the CD4 derived MKZ and Continental. D3 Taurus was the standout and twinned with the Explorer, became the police vehicles of choice by many departments.

 

While it’s probably true that Ford spent a fortune developing the CD4 MKZ and  Continental, Lincoln dealers were begging for a 3-row utilities  Navigator and an  Aviator. So apart from from trying to make European Mondeo, Focus and Fiesta work in North America, I don’t see much beyond modest, controlled investment in cars.

 

I wonder if a lot of the perceived losses with sedans is opportunity cost, maybe Farley regrets that Ford didn’t move more quickly to utilities in the twenty tens, we still don’t know how much funding was burned by Mark Fields on developing Lincoln cars including the RWD plans..

 

Edited June 14, 2024 by jpd80

[ausrutherford]

Sedans are not just dying in the US market, but globally.

 

From Europe to China to Southeast Asia to Australia and South America, more Top 20 lists will have crossover, SUVs, and Trucks year after year.

 

In the US, Camry, Corolla, Accord, and Civic used to sell 100's of 1000's more than they do now. And that is with less competition. They all keep investing in them, and yet, sell less and less.

 

I think the 2025 "all-new" Camry shows the issues with sedans. Even Toyota is admitting they can't invest into an all-new Camry since it is just a re-skin. That would have never happened in the 90s/2000s.

[morgan20]

44 minutes ago, ausrutherford said:

Sedans are not just dying in the US market, but globally.

 

Currently Ford only sells sedans in China and parts of the Middle East. Everywhere else, sedans are gone from the Ford and Lincoln lineup.

[ausrutherford]

39 minutes ago, morgan20 said:

 

Currently Ford only sells sedans in China and parts of the Middle East. Everywhere else, sedans are gone from the Ford and Lincoln lineup.

 

Ford China can afford sedans due to the low manufacturing costs.

 

Many automakers produce sedans in China that they do not offer elsewhere for this same reason. GM, BMW, Stellantis, VW, Toyota, Honda, etc. 

[jpd80]

Also with regards to North American car sales, the EPA virtually made it impossible to sell profitable small cars, the rules of required fuel economy were overly tough compared the easier pass given to trucks/utilities (non-cars).

 

Even today, it makes little sense to produce sedans when that production capacity can and is being used

to make more profitable Utilities or trucks. Toyota even admits that the Camry makes little sense and will

eventually give way to more RAV4 sales.

[morgan20]

12 hours ago, ausrutherford said:

Many automakers produce sedans in China that they do not offer elsewhere for this same reason. GM, BMW, Stellantis, VW, Toyota, Honda, etc. 

 

Those companies also produce sedans in North America, Latin America, Europe, and Asia outside China, regions where Ford has given up on sedans. Ford doesn't know how to build sedans profitably no matter where. The sedans Ford makes with Changan in China are probably unprofitable.

[fuzzymoomoo]

22 hours ago, morgan20 said:

When I worked at Ford & Visteon, high volume Ford, Mercury, and Lincoln sedans were considered loss leaders. Profit margins on Ford trucks, vans, and SUVs more than made up for that.

Thats similar to the point I was going to make. Why not use sedans as loss leaders to get people in your products then upsell them for the next one. Isn’t that kind of the whole justification for Lincoln’s entire existence? 

[akirby]

1 minute ago, fuzzymoomoo said:

Thats similar to the point I was going to make. Why not use sedans as loss leaders to get people in your products then upsell them for the next one. Isn’t that kind of the whole justification for Lincoln’s entire existence? 

Why do that if you build vehicles that sell on their own instead?  Maverick and Bronco Sport are even more effective at bringing in new customers and they’re far more profitable.

[Bob Rosadini]

hmnn..are we  horse back or afoot?  Did I just not read that Farley was talking about the possibility of a sedan?  I guess it is a good thing that he is keeping his eye on changing trends.

 

I drive through a parking lot and what do I see..new Accords, Camrys, Corollas, etc.

Again, Honda and Toyota must have the worst product planners

[Bob Rosadini]

Just now, Bob Rosadini said:

hmnn..are we  horse back or afoot?  Did I just not read that Farley was talking about the possibility of a sedan?  I guess it is a good thing that he is keeping his eye on changing trends.

 

I drive through a parking lot and what do I see..new Accords, Camrys, Corollas, etc.

Again, Honda and Toyota must have the worst product planners

PS..  Love my MKZ 3.0.  A "best kept secret" that Ford refused to market.  I was looking to replace my SHO that hit 100,000 trouble free miles with a CPO SHO with little luck-unless I wanted to go to Michigan, when I believe somone here (TT?) suggested I look for a Fusion Sport or a 3.0 MKZ.    I started searching You Tube and found all sorts of glowing endorsements for the 3.0 MKZ.

 

Another example of Ford spending money and not capitalizing on what they created

IMO

 

[HotRunrGuy]

46 minutes ago, akirby said:

Why do that if you build vehicles that sell on their own instead?  Maverick and Bronco Sport are even more effective at bringing in new customers and they’re far more profitable.

 

I never thought I'd live to see the day when you are praising sub-$50K vehicles, and the lower ATP's they generate.

 

HRG

[fuzzymoomoo]

50 minutes ago, akirby said:

Why do that if you build vehicles that sell on their own instead?  Maverick and Bronco Sport are even more effective at bringing in new customers and they’re far more profitable.

Who says you can’t do both? I understand production capacity needs to be taken into account, but we also know ford has at least 2 plants in North America that aren’t at full capacity (Flat Rock and Louisville). Hell, ship it over from China if you must, at this point I don’t care. 

Edited June 15, 2024 by fuzzymoomoo

[DeluxeStang]

1 hour ago, Bob Rosadini said:

hmnn..are we  horse back or afoot?  Did I just not read that Farley was talking about the possibility of a sedan?  I guess it is a good thing that he is keeping his eye on changing trends.

 

I drive through a parking lot and what do I see..new Accords, Camrys, Corollas, etc.

Again, Honda and Toyota must have the worst product planners

I see more new broncos, bronco sports, and mavericks where I live than I do new Camry or civics. But to each their own. Everyone in my neighborhood is buying mavericks right now, it's almost comical how many bronco sport and mavericks are parked in our neighborhood. We're at 5 and counting. 

[DeluxeStang]

1 hour ago, fuzzymoomoo said:

Who says you can’t do both? I understand production capacity needs to be taken into account, but we also know ford has at least 2 plants in North America that aren’t at full capacity (Flat Rock and Louisville). Hell, ship it over from China if you must, at this point I don’t care. 

A CE1 based car form factor would be perfect for flat rock, or a new mustang body style like a sedan or mid-engine model. Something that generates a healthy profit, but sells in lower volumes than a traditional crossover or truck would be very beneficial for flat rock. But it doesn't appear to be in the cards. 

 

We can talk about profitability and consumer demand all day long. But the fact of the matter is, making a new sedan, or some other car at flat rock seems to make way more sense financially than leaving that plant underutilized for the foreseeable future. C2 was almost instant profitable I bet, whatever sedan program they do based on it could be done for almost nothing. Hell, they literally have a c2 fusion as we speak, a competitive product that they refuse to bring here because "Oh it won't sell 300k units a year at 100 thousand dollars" it's just maddening. 

[joseodiaga4]

2 hours ago, fuzzymoomoo said:

Who says you can’t do both? I understand production capacity needs to be taken into account, but we also know ford has at least 2 plants in North America that aren’t at full capacity (Flat Rock and Louisville). Hell, ship it over from China if you must, at this point I don’t care. 

The problem is that it seems Ford doesn’t know to do both or a lot of things at once

[Sherminator98]

2 hours ago, Bob Rosadini said:

Again, Honda and Toyota must have the worst product planners

 

Again they aren't selling 60-80K pickup trucks in nearly double the number of what the Camry does either. 

[Sherminator98]

39 minutes ago, DeluxeStang said:

can talk about profitability and consumer demand all day long. But the fact of the matter is, making a new sedan, or some other car at flat rock seems to make way more sense financially than leaving that plant underutilized for the foreseeable future. C2 was almost instant profitable I bet, whatever sedan program they do based on it could be done for almost nothing. Hell, they literally have a c2 fusion as we speak, a competitive product that they refuse to bring here because "Oh it won't sell 300k units a year at 100 thousand dollars" it's just maddening. 

 

But here lies the issue-the development work might be "free" but you still need to make new tooling, subassembly production (power plants, interiors) and whatever else to put it into production and then make a profit off it. 

If it was that simple and profitable to do it, I think Ford would be doing it already. 

 

Plus I'd venture to say that nearly every non luxury sedan has some sort of sub leaned financing and discounts on top of a lower MSRP (vs a CUV) to make money off it. 

 

[Sherminator98]

2 hours ago, HotRunrGuy said:

I never thought I'd live to see the day when you are praising sub-$50K vehicles, and the lower ATP's they generate.

 

What the hell are you talking about? 

 

Just looking at the Maverick as an example-starting price is just under $24K. 

 

I did a search on Ford's website and there are roughly 100+ of them apparently in the area where I live with in 20 miles (dealer stock and enroute)

Out of that 100+, only 3 of them where less then 27K

 

The vast majority of the Mavericks are in the mid 30K range, which means they are already 10K over their start price and some models go as high as $41K, which is 17K over starting list price. 

 

So being a product that was designed to be "cheap" there is a huge amount of profit that is being made off it, esp since it doesn't have discounts or subleaned financing on it either. 

[akirby]

2 hours ago, HotRunrGuy said:

 

I never thought I'd live to see the day when you are praising sub-$50K vehicles, and the lower ATP's they generate.

 

HRG

That’s because you misinterpret half of what I say.  There is a huge difference in a $25k focus that needs $3k incentives plus dealer discounts and a $25K Maverick that sells at MSRP and over.  It’s not about absolute ATPs but profit margins and ROI.  Plenty of room for less expensive products if they’re desirable and profitable.