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Why Does Ford Even Build Cars?


Razors Edge

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...for the US market.  I get building the Mustang since it sells well and is iconic, but EVERY other car they make seemingly makes no money for them, so, from a financial perspective, WTF?

Same with the others like GM or maybe Chrysler?  VW, Honda, Mazda, Nissan, Hyundai, and Toyota can carry the small car market. Add in BMW, Jag, Volvo, and Mercedes for the mids and large cars, and there really is no need for the "US" makers to produce & sell cars that don't make a profit. Seems like they keep beating themselves up wasting resources when they could just build the SUVs and trucks that they are good at building and marketing.

Considering car also play by stricter rules than light trucks regarding CAFE standards, and the steady progression of increased efficiency/MPG reqs of CAFE standards are less dramatic for light trucks vs cars, it seems like they (Ford, GM, Chrysler) ought to play to their strengths???

Tom

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Just now, jsharr said:

fleet sales would be my guess.

That seems like a "band-aid fix" for their problem - can't sell cars, so offload to rental agencies at "cost".  I don't hear that they are making bank on fleet sales.  Heck, many cop cars I see now are SUVs rather than the Taurus(?) based Interceptor Sedan.

Tom

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4 minutes ago, Razors Edge said:

That seems like a "band-aid fix" for their problem - can't sell cars, so offload to rental agencies at "cost".  I don't hear that they are making bank on fleet sales.  Heck, many cop cars I see now are SUVs rather than the Taurus(?) based Interceptor Sedan.

Tom

Law Enforcement like front engine / rear drive configuration.  Very few cars have this any more, hence the switch to SUVS for many departments.  

Many US companies want their sales / field people in US made cars, so fleet sales of sedans works for them as well.

The sedan is a dying breed sadly.  

I am enjoying my big front engine, rear drive land yatch.

In fact, I may name her The Black Pearl

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6 minutes ago, jsharr said:

Law Enforcement like front engine / rear drive configuration.  Very few cars have this any more, hence the switch to SUVS for many departments.  

Many US companies want their sales / field people in US made cars, so fleet sales of sedans works for them as well.

The sedan is a dying breed sadly.  

I am enjoying my big front engine, rear drive land yatch.

In fact, I may name her The Black Pearl

Corolla, Civic, Accord, and Camry all come as sedans and all were in the top 10 last year.  There were more in the 11-20 ranks as well (including the Ford Fusion).  But if Ford can't make money on the Fusion, leave it to the folks who can and actually plan to and want to make/sell those cars.

Accords and Camrys are made in the USA (often), but if they want "American", then give the staff/sales folks what they want - SUVs/CUVs instead of cars - Escape, Equinox, Explorer, etc..

Tom

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42 minutes ago, Razors Edge said:

Corolla, Civic, Accord, and Camry all come as sedans and all were in the top 10 last year. 

Maybe this is a simplistic view but these four models have nearly bombproof reputations for reliability and durability.  If you want a compact or midsize sedan that you're going to keep for 5+ years, and you buy something outside these four, I think you're rolling the dice. 

(signed, happy 2014 Accord owner)

If Ford says they're not going to sell sedans anymore I think that's really just them throwing up their hands, or throwing in the towel, whichever idiom you prefer.

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18 minutes ago, Kzoo said:

This...

...was the reason for the post.

So, then, why does Form make cars for the US?  This not-making-a-profit storyline is not a new one.  Only the weird "make it in America so you can keep selling them" emphasizes the issue that cars, for whatever reason, continue to be in the Ford or Chevy line-up even though they make no money for them. Perhaps they even lose money for them.  And it isn't like they are loss leaders to get folks in the showroom. At this point, folks seemingly head to a dealer knowing they want either a car, SUV, or a truck.  Maybe some are a little wishy washy on the hatch/wagon vs small SUV, but can't say that's a big portion of sales.

Anyway, I guess folks might want to answer "Why has Ford been selling cars in the US the past few years" instead.

Tom

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1 hour ago, maddmaxx said:

Ford isn't going to be making cars in the future except for the Mustang.  They announced that decision a while ago.

That means built in the USA.  They're still making cars in Mexico and China.  I wonder if they want to stay in the forefront of the car market in case tastes change.

Personally, my first new car, in 1977, was an AMC Gremlin, an SUV that did not include the clever designs that are in today's SUV's.  After that, I had sedans until I bought a Honda Fit in 2013.  I don't think I'll ever go back to a sedan.

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Showroom traffic, brand identity, plenty of marketing reasons to offer loss leaders so you can make money on your overpriced stuff.  Many industries do this.  As the population moves away from sedans into SUVs, it's a less effective approach, so no more cars.  My prediction is a few years into this new approach, they'll be making cars again.

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Gas prices are expected to go up, in a year or so. When ships have to switch to low sulfur diesel.

Prices will spike, Americans freak out.

In europe, they just kill the gas tax for a while, and it's not really a big deal. For us it could be a very big deal, revealing underlying weaknesses in the economy.

Companies that make small cars outside the US will have a great time.

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23 hours ago, Razors Edge said:

Corolla, Civic, Accord, and Camry all come as sedans and all were in the top 10 last year.  There were more in the 11-20 ranks as well (including the Ford Fusion).  But if Ford can't make money on the Fusion, leave it to the folks who can and actually plan to and want to make/sell those cars.

Accords and Camrys are made in the USA (often), but if they want "American", then give the staff/sales folks what they want - SUVs/CUVs instead of cars - Escape, Equinox, Explorer, etc..

Tom

Honda has said they are struggling as the Accord isn't selling well.

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And if you want to really know how ludicrous the car market is.  The Jeep Wrangler is one of the top selling vehicles out there right now.  A vehicle that is actually horrible to drive on the road compared to most and that is where most of them will always live.  People want big vehicles they think are cool, not something that is actually fun to drive and comfortable.

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33 minutes ago, TrentonMakes said:

I had no idea, but I UTFG and your story checks out.  I'm really surprised.

I LOVE my Accord, but.....

...I am not buying another one as my next car.  I think they remain the best choice for "buy it and forget about it", but Accords are not known for their towing prowess, and my next vehicle will need that as a strength. But I will likely keep the current Accord along with my new choice.

Tom

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2 minutes ago, Razors Edge said:

I LOVE my Accord, but.....

...I am not buying another one as my next car.  I think they remain the best choice for "buy it and forget about it", but Accords are not known for their towing prowess, and my next vehicle will need that as a strength. But I will likely keep the current Accord along with my new choice.

Tom

That's why my wife is looking at an Armada.

 

She works from home now, so not to worried about the gas mileage hit since she doesn't drive much.

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