Automotive News
June 26, 2017
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June 26, 2017
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If you want to know how Ford Motor Co. feels about the car segment in North America, look no further than the Focus.
In the span of 15 months, the automaker went from planning to build the next-generation Focus in a new $1.6 billion plant in Mexico to canceling those plans and wedging production in an already-established plant in Hermosillo, Mexico, to shipping the compact car off the continent entirely by consolidating production in China as part of a cost-cutting effort announced last week.
The move is a sharp fall for the small, fuel-efficient sedan/hatchback that was once a major part of Ford's U.S. product plans. Slumping sales that show no sign of picking back up have turned the car into an imported afterthought.
Starting next year, Ford will go about a year without building a single Focus for North America — and the market may not even notice. Production for North America will end in Michigan in mid-2018 and won't begin in China until mid- to late 2019, the automaker said.
"We'd prefer not to have that large of a gap, admittedly," Joe Hinrichs, Ford's president of global operations, told Automotive News. "We think we'll be able to bridge that gap with a combination of stockpiling, and the EcoSport [subcompact crossover] coming in, which will help us have another product in that price band."
As of June 1, Ford had 37,400 Focuses in stock, a 54-day supply, according to the Automotive News Data Center. Sales, however, have plummeted, down 20 percent through the first five months of the year to 67,146.
Analysts say the decision is purely financial, allowing Ford to cut costs on a vehicle that fewer and fewer U.S. customers seem to want.
"If you don't need the capacity of two plants to support the product, you're saving money," Stephanie Brinley, senior analyst at IHS Markit, said in an interview. "It's a matter of matching production to demand."
About four years ago gas prices were about $4.00 a gallon, and I leased a Chevy Volt. I now have a car on order rated for 16 miles per gallon, so I am as guilty as anyone else ignoring this type of vehicle.Starting next year, Ford will go about a year without building a single Focus for North America — and the market may not even notice.
About four years ago gas prices were about $4.00 a gallon, and I leased a Chevy Volt. I now have a car on order rated for 16 miles per gallon, so I am as guilty as anyone else ignoring this type of vehicle.
I drove a manual "SE" Focus about two years ago - it's a great vehicle, and usually gets great reviews. But times have changed.
I think this headline says it all:
Chattanooga gas prices drop another 3.8 cents per gallon to $1.90
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What I don't get is how much cheaper can it be to manufacture in China vs. Mexico. As I recall the automakers pay something like a dollar an hour for Mexican labor, meaning I assume Mexican labor is cheaper than Chinese labor. Then add to it the cost of shipping from China to the Americas....Cheap gas and consumers want SUVs/CUVs. Market has shifted - I get it. It's a shame more production is shifting to China. Rather see production in Mexico.
I think the day will come when GM and Ford seriously regret releasing that particular Jeannie from the bottle. The biggest hurdle for Chinese cars being sold in the US is consumer confidence and GM/Ford decided to take that financial risk for them. Once people are used to the idea that China sourced cars are reliable the floodgates will open, but hey, GM and Ford will have milked that cow for a couple years before their demise.I think GM paved the way for Ford to move the Focus to China when they built a vehicle entirely in China to be sold here. The customers didn't reject the car and GM didn't get a lot of grief from it. I expect we will see more of it and it's won't be long until China enters our market in their own name.
Classic Ed753 on Ford. You love Ford, Ed. A lot. lol.Interesting approach, I suspect there is a bit of calculate brilliance wrapped-up under what on the surface seems catastrophic.............
Already have them, crossovers and pickups.You hate to hear this. Maybe......America might be ready for a line of large cars again? Maybe not.
Domestic automakers have always been terrible at long term plans. Everything is a short-term, knee-jerk reaction, and usually they are late to the party with changes in the market. Remember the original Escalade? Cadillac's ongoing lack of crossovers is embarrassingly delinquent. As for the Focus, it can't help matters that the current model is ancient. Who would buy a Focus when newer chief competitors like the Civic, Cruze and Mazda3 are out there??Consumers are fickle. We are one Middle Eastern crackpot away from a spike in gas prices and the return of the small car. When that happens (you know it's not an if, just a when), Detroit will again be caught with their proverbial pants down.
Why is it that Detroit has to compromise one type of vehicle to push another when everyone else on the planet seem able to strike a balance among different types of products?
Two words "Eco Sport"
Lets be honest, just as the Trax has stole Spark Sales, so will the Eco Sport.
Unless gas prices Skyrocket, I don't see the need for both.
+1even if oil prices spiked, there is little likelihood that car sales would return,
Utility buyers would simply demand more efficient versions of their vehicles.
I still say vehicles sales (types/sizes) has more to do with employment (and the affordability that allows) than actual price of gas; sure higher prices will put some people on the edge over the edge, but the fuel spend isn't that much difference.So short sighted. Gas prices don't stay low, in addition the Focus isn't selling because it hasn't been updated in a long long time and there are better choices out there.
Is Honda going to stop selling the Civic? Toyota the Corolla? Subaru updated the Impreza, etc etc. Those cars are selling.
How about building a Compact that people want?
Manufacturing in China is yet another demerit. Subaru just started building the Impreza in the U.S.
Ford and GM are just poorly managed companies
When gas prices move, they will shift towards more efficient crossovers.So short sighted. Gas prices don't stay low, in addition the Focus isn't selling because it hasn't been updated in a long long time and there are better choices out there.
Is Honda going to stop selling the Civic? Toyota the Corolla? Subaru updated the Impreza, etc etc. Those cars are selling.
How about building a Compact that people want?
Manufacturing in China is yet another demerit. Subaru just started building the Impreza in the U.S.
Ford and GM are just poorly managed companies
We don't know the profit level of any specific line for any make. We assume Toyota is making money on the Corolla, but perhaps presumed higher profits are based on its ancient mechanicals and chassis and relying on its quality image to sell (that other brands don't have) vs. any real magic. And perhaps Ford can make a profit building the Focus in the USA, but they might be able to make MORE profits building in China.So my question is: Why can't Ford profitably produce the Focus in the US when GM builds the Cruze here (profitably I believe) and Toyota builds the Corolla in the US as well (very profitably). What gives with Ford? Is Toyota really that much more efficient in designing/building cars?
1 Year isn't leaving the market!You people forget quickly. Gm is well aware that small cars are not selling great however they made a statement months ago that they are not dropping out of the market of building them. They realized someday gas will go back up and you need have a decent small car line up which they do have. The cruze and sonic are made in plants that have been around for years so the infrastructure is paid for. Yes it cost money to retool for new designs. But you still may new car buyers who can only afford a small car and not a cuv/suv. Ford is basically giving GM a gift by letting the focus lag like they did before and Gm has the cruze which competes well with cars in its price range. If gas prices staly low I do see a resurgance of larger car based vehicles.
This is so very true. The CUV's of today resemble the late 1930's and 1940's cars almost to a "T" with a much shorter hood length (don't have to fit those straight 8's anymore). That's what is going on. The market is going back to cars that are easy to get in and out of. Function has almost totally eradicated form.I would agree the CUV/Suv craze is more of just going back to cars back in the 40's and 50's more upright and were easier to get into. Actual passenger space in cuv/suv compared to a regular sedan is not much bigger except in maybe head room.
However a bigger issue is people think that because you can put more in them that you should. None of thes cuv/suv have a much of a higher cargo weight than cars. Just because it can fit doesn't mean you should stuff it full.
Them are getting harder to find than a Full Size Sedan.Right, if people really needed/wanted the room, they'd buy a minivan.