Ford CEO Jim Farley Says People Need To Embrace Small Cars

[Biker16]

😆 

 

“We have to start to get back in love with smaller vehicles. It’s super important for our society and for EV adoption,” Farley told the Guardian. “We are just in love with these monster vehicles, and I love them, too, but it’s a major issue with weight.”

 

https://jalopnik.com/we-have-to-start-to-get-back-in-love-with-smaller-vehic-1851575187

[tbone]

“We have to start to get back in love with smaller vehicles,” Farley said in a recent interview with NBC News. “It’s super important for our society and for EV adoption. We are just in love with these monster vehicles, and I love them too. But it’s a major issue with weight.” 

 

What is Farley thinking making a statement like that when large vehicles, ie. F Series, generate all the profits for the company. “Let them eat cake” statements like that don’t tend to sit well with people, especially when he can afford to buy literally any vehicle he wants to buy.  Americans don’t typically like to be told what to do, so it’s not a good look when I see those headlines popping up. Just because he wants people to adopt EVs since they have spent Billions on them doesn’t mean the people want or have to. I’m beginning to question some of his judgment.  
 

 https://fordauthority.com/2024/07/ford-ceo-jim-farley-says-people-need-to-embrace-small-cars/

[DeluxeStang]

He's not wrong. The maverick is arguably the best truck on sale dollar for dollar, and that's because it gives you everything you want with none of the excess or waste. Smaller cars are what most people actually need, and in this day and age. 

 

We need, and want small, affordable, reliable and exciting vehicles. When brands knock it out of the park on all fronts, they're generally rewarded, like with maverick and bronco sport which excel in all of those areas. Give us more of that please. 

[akirby]

His statements have nothing to do with F150 - he’s talking about EVs and European vehicles.

[jpd80]

Yes, Ford is looking down the tubes in Europe as it tries to transfer to electric vehicles,

that’s the real reason why Dearborn is taking closer control of European product decisions.

The more they cut, the more buyers just leave and go to other brands, that’s gotta stop…….

 

On the up side, I like what Ford is doing with BEV Puma and tiny BEV Transit van they are

two good examples of right thinking. I’m worried about sales volume of BEV Explorer/Capri twins.

Mach E sells better in Europe than North America but will that hold up as it ages…….

Edited July 4 by jpd80

[Chrisgb]

I perceive a cooling or change in lifestyle starting to gain traction. As we travel throughout the Midwest, I'm seeing an increase in the number of RVs of all types for sale in people's yards; they can't all be upgrading. What I'm hearing from neighbors and acquaintances that own RV's ranging from van conversions and single axle hitch mounts and larger is, that it's getting harder to find or reserve camping spots, and insurance has gone up like auto insurance has. All this will have an effect on large van and Super Duty-type truck sales, new and used. Maybe a tandem axle, twin pull-out yanked with a 13mpg dually isn't as relaxing as it first seemed. I think economics and logistics are beginning to have as much impact, more or less, as government programs aimed at electrification. A PHEV and hotel points might be worth considering for some.

 

Included hot breakfast and somebody else does the dishes and makes the bed. Works for me.

[HotRunrGuy]

Just got back from a quick trip to western Germany, it's amazing how much smaller the overall size of vehicles is.  Even my Maverick would be a bit on the large (long) side.  Towing a small utility trailer seems to be the common answer for extra capacity when needed.

 

HRG

[akirby]

43 minutes ago, HotRunrGuy said:

Just got back from a quick trip to western Germany, it's amazing how much smaller the overall size of vehicles is.  Even my Maverick would be a bit on the large (long) side.  Towing a small utility trailer seems to be the common answer for extra capacity when needed.

 

HRG

Thats the difference in 75 yr old roads vs 500 year old roads.

[GearheadGrrrl]

Older US cities copied Europe's glorified alleys, and many newly built single and multifamily developments are sized for something like an Explorer or smaller.

[rmc523]

This comment by him all depends on the market that is being referred to.  In Europe, or perhaps a larger US city, sure, smaller cars make sense.  In more rural parts of the country, bigger cars make more sense.

 

They need to offer a fuller lineup to appeal to all parts of the market.

[AM222]

3 hours ago, rmc523 said:

This comment by him all depends on the market that is being referred to.  In Europe, or perhaps a larger US city, sure, smaller cars make sense.  In more rural parts of the country, bigger cars make more sense.

 

They need to offer a fuller lineup to appeal to all parts of the market.

In the US, many find B-segment subcompacts as too small despite the fact that they've grown larger over the decades.

It's funny that the current subcompact Nissan Versa is about the size of a Ford Tempo or late 80s Toyota Camry.

...and a subcompact Kia Seltos is nearly as big as the original 2000s Ford Escape.

Of course, during their time, a Ford Tempo, late 80s Camry, or 2000s Escape weren't considered "too small".

Developing small cars (both ICE or EV) won't be an issue as long they are global. Small vehicles are important in majority of the markets outside the USA & Canada.

Edited July 5 by AM222

[rmc523]

4 minutes ago, AM222 said:

In the US, many find B-segment subcompacts as too small despite the fact that they've grown larger over the decades.

It's funny that the current subcompact Nissan Versa is about the size of a Ford Tempo or late 80s Toyota Camry.

...and a subcompact Kia Seltos is nearly as big as the original 2000s Ford Escape.

Of course, during their time, a Tempo or Escape wasn't considered "too small".

Developing small cars (both ICE or EV) won't be in issue as long they are global. Small vehicles are important in majority of the markets outside the USA & Canada.

 

Correct.  The new Trax seems to be doing very well, so at least for the US market, whatever size it its seems to have hit a sweet spot in size, price, and style.

[akirby]

Small car sales aren’t a problem if they’re priced low enough.  The problem is making any decent profit margin.  They should take C2 and downsize it with 1.0 and 1.5 ecoboosts and maybe a small diesel if that’s required.

[ice-capades]

1 hour ago, akirby said:

Small car sales aren’t a problem if they’re priced low enough.  The problem is making any decent profit margin.  They should take C2 and downsize it with 1.0 and 1.5 ecoboosts and maybe a small diesel if that’s required.

 

No question that smaller vehicles are more price sensitive and under more pressure to achieve the desired profit margins. Ford's problem is that management makes short sighted decisions, abandons market segments to the competition, and then years later realizes that it needs to re-enter a market segment and then struggles to achieve positive results to any degree because customers have defected to the competition. 

 

Part of the problem is that Ford prices the smaller entry level vehicles at prices that leave the Dealer margin at less than $200 per vehicle, leaving little profit incentives at the dealership level. Add in the floorplan costs and the inventory costs raise to a whole different level. 

[akirby]

41 minutes ago, ice-capades said:

 

No question that smaller vehicles are more price sensitive and under more pressure to achieve the desired profit margins. Ford's problem is that management makes short sighted decisions, abandons market segments to the competition, and then years later realizes that it needs to re-enter a market segment and then struggles to achieve positive results to any degree because customers have defected to the competition. 

 

Part of the problem is that Ford prices the smaller entry level vehicles at prices that leave the Dealer margin at less than $200 per vehicle, leaving little profit incentives at the dealership level. Add in the floorplan costs and the inventory costs raise to a whole different level. 

I think the big root cause there goes back to higher cost basis especially in Europe.  I think that led to a lot of the other bad decisions.  When your costs are low you have far more options

[atomcat68]

2 hours ago, akirby said:

Small car sales aren’t a problem if they’re priced low enough.  The problem is making any decent profit margin.  They should take C2 and downsize it with 1.0 and 1.5 ecoboosts and maybe a small diesel if that’s required.

They should strive to get as much margin as possible out of a small car, but I feel it is also important to realize that they won't make as much of a percentage of a profit as a large car. The lower priced car is important as an ambassador to a brand to a first time buyer. If it is built correctly and with quality, then that buyer will come back and buy higher priced cars and keep buying the brand. Toyota and Honda managed this flawlessly and Hyundai has accomplished this as well.

[akirby]

1 hour ago, atomcat68 said:

They should strive to get as much margin as possible out of a small car, but I feel it is also important to realize that they won't make as much of a percentage of a profit as a large car.

I agree it won’t be a huge margin but 4% on a $25K vehicle is only $1K.    Below that you might as well just invest in bonds.

 

1 hour ago, atomcat68 said:

They should strive to get as much margin as possible out of a small car, but I feel it is also important to realize that they won't make as much of a percentage of a profit as a large car. The lower priced car is important as an ambassador to a brand to a first time buyer. If it is built correctly and with quality, then that buyer will come back and buy higher priced cars and keep buying the brand. Toyota and Honda managed this flawlessly and Hyundai has accomplished this as well.

 

I think this was true in the past for some vehicles (especially commodities) but I don’t think it’s prevalent any more and it certainly doesn’t apply to vehicles like Maverick, Bronco, Bronco Sport, F150, Mustang, etc.   Buyers today seem to care more about the individual vehicles and less about the brand.  

[jpd80]

2 hours ago, akirby said:

I think the big root cause there goes back to higher cost basis especially in Europe.  I think that led to a lot of the other bad decisions.  When your costs are low you have far more options

This. The flexibility of the modern C2 should be allowing Ford to tailor whatever vehicles are needed 

in Europe and ROW markets. A well designed Electric vehicle platform that can do the same thing

shouldnt be so hard. I wonder if the issue is looking at one or two vehicle developments instead 

of looking at a whole family of vehicles. 
 

Another big impediment I Europe is countries like Germany insist on production of Focus in order 

to guarantee support from German buyers, it’s a rather parochial place and when ford stated 

consolidating production in Valencia Spain it save a lot of money, the plant building up to

six different types of vehicles. Good idea but again, Europe is a tricky place to do business.

[jpd80]

9 minutes ago, akirby said:

I agree it won’t be a huge margin but 4% on a $25K vehicle is only $1K.    Below that you might as well just invest in bonds.

 

 

I think this was true in the past for some vehicles (especially commodities) but I don’t think it’s prevalent any more and it certainly doesn’t apply to vehicles like Maverick, Bronco, Bronco Sport, F150, Mustang, etc.   Buyers today seem to care more about the individual vehicles and less about the brand.  

Yes, it’s gives a sense of custom build, something Ford makes just for you. The kind of thinking behind

the Maverick development is perhaps whats  needed to reset buyer perception of other volume sellers.

I was just thinking about the original Taurus launch, back then it was a revolutionary vehicles but a lot

of buyers loved it too…..not sure how Ford recaptures that type of response..maybe extended range EV?

Edited July 5 by jpd80