Investors care about bottom line profit not so much where it comes from with the exception of diversification. There is no reason to believe making new more affordable vehicles would compromise profitability of other vehicles to the point that it's a net loss. But to answer your other question affordable doesn't mean cheap - these won't be the absolute cheapest vehicle but would still be in the lower tier of pricing. Think previous Focus not Nissan Versa. This, combined with lower costs (remember ce1 brings a completely different design and manufacturing process) should allow Ford to still turn a healthy profit as opposed to the previous situation where they were only good for CAFE compliance.
This also represents an opportunity for revenue growth. It's not going to displace higher profit sales - those sales are already going to Hyundai, Nissan and Toyota already.
What you see as corporate greed with automakers dropping small cars is the direct result of too stringent CAFE rules - the opposite of what was intended.
Tariffs are only there to ensure a level playing field. Trump offered to drop ours if they drop theirs. Why should we allow other countries to put our producers at a disadvantage with tariffs while we let them export here for free? And we've already seen commitments for moving production to the US in response.
They also showed an LFA "concept" that's EV....it's a closer to production version of that concept from a few months back.
The Lexus LFA Returns, But You’re Not Going To Like What They Did | Carscoops
Cheap is basically built to the lowest standard possible, to be as cheap to buy as a new car could be. Affordable is basically making a car great value for what it offers, but not necessarily the lowest price.
Like using cars I've owned as an example, I had a 2009 Kia Rio. That was a car that was like 11 grand brand new, but frankly was a shit box. It wasn't super unreliable, the powertrain didn't have a single issue in 13 years and 110k miles. But it had a lot of smaller issues like if you parked and turned it off with the wheels turned, the key wouldn't turn in the ignition when you went to restart it. So you'd have to wrestle the wheel as straight as possible and then try to start it. Basically just a lot of issues over time that made you say "Wow they cheaped out on everything". Like hand crank windows and door locks, my entire door was about as thick as the door panel on my 2017 explorer, just didn't feel safe. The steering wheel would shake back and forth violently at highway speeds. Just not a great ownership experience.
Whereas my maverick hybrid, I would call that an affordable car. It wasn't cheap, it was significantly more expensive than my Rio, I bought one of the first hybrids and it was about 28k for my XLT after registration and sales tax with a few options. Despite being more than twice the price of the rio, it feels like better value. Like a maverick doesn't feel like a shit box. It doesn't feel like a luxury car, but I feel like I'm getting more dollar for dollar in terms of value than I did with my Rio.
Had this discussion on another site....what was once an American hallmark, we shopped for what is "good".... in the late 70's early 80's...that began to change and Americans shopped for what is "good enough"...there is a fine line drawn between the two but the quality gap between what is considered "good" as opposed to what is accepted as "good enough" is huge.
To be clear, the industry can build affordable cars, but the stock market and investors are not incentivizing them to do so. There aren't groups of investors clamoring for Ford to make affordable cars, but there is a large group of investors clamoring for Ford to continue to make high-margin, large fuel-guzzling vehicles. That have driven company profits for the better part of four decades.
Every financial report from Ford in the last two decades have highlighted average selling price as a key fundamental for the company. ASP growth has led to profit growth, affordability will do the opposite unless structural changes are made to reduce the cost structure. Which is challenging in a high tariff environment.
They left it open ended when asked at that reveal event if it could accommodate other kinds of powertrains which implies they're at least thinking about it.
Hi Monics. I second akirby's recommendations, and would also add Zeigler Automotive to his list: https://www.zeiglerfordesp.com/warranty_plans/?plan_id=2130&gad_source=1&gad_campaignid=1702246218&gclid=EAIaIQobChMIkfyc3fSmkQMVAUX_AR0DLgz2EAAYASAAEgJ3bfD_BwE
Check out all three, and sign with the one offering the best price. Also, be sure to compare apples to apples, since there are various plans and options ... i.e.:
- A basic powertrain plan up to the full Lincoln Protect PremiumCare plan).
- Year/mileage limits.
- Deductibles (from $0 and up).
- Optional coverage choices, such as LED lighting, Key Coverage, Extended Rental Coverage etc.
Let us know how you make out and good luck.