Ford and The Disappearing Market for Sedan Models

By Michael W.R. “Mike” Davis, Veteran Arcadia Author

Why did Ford Motor Company announce in April that they would discontinue selling their sedan models in North America, including the highly-praised Fusion, the compact Focus, the sub-compact Fiesta, and the standard Taurus? Choosing to maintain only their highly successful Mustang sporty coupe, the company has announced a new high-performance version of the Mustang coupe for the coming model year.

The answers lies not in the stars or hearts of man, but rather in the cold numbers upon which Ford executives must rely for their product strategies.

In brief, the entire automotive sales industry in North America has experienced sharp reductions in sedan sales in the last couple of years, while retail customers scoop up vehicles classified as trucks: pickups, vans, and “sport” SUV models set up for deep snow, or cross-country off-road driving, similar to the Jeep descendants of World War II military people-movers.

Ford’s Mexican-assembled Fusion competes directly with Chevrolet’s Malibu, Toyota’s Camry (the best-selling car in the USA), Honda’s Accord, the Nissan Altima, Hyundai’s Elantra, and others of the same size and (generally) price. The compact Focus faces such sedans as the Chevy Cruze, Toyota Corolla (which is supposedly the largest-selling car in the world, though it is not in the US), Honda Civic, Nissan Sentra, Hyundai Elantra, and others. The sub-compact (“B-class”) Ford Fiesta is Ford’s best-seller in Europe, but not in the States, where it faces off against the Chevy Sonic, Toyota Yaris, and Honda Fit. With such high competition, it can be difficult for Ford to turn a profit on any of its various sedan models.

Other body styles of conventional passenger cars, such as coupes, club coupes, coaches (two-door sedans), and station wagons have mostly disappeared from the American marketplace. “The dogs aren’t eating the dog food,” is the common explanation amongst auto company insiders for such market and product changes in public taste.

Even the highly touted (especially by federal officials and the environmental lobby) electric vehicles (EVs) aren’t doing that well, though their sales numbers are hidden within overall sedan sales for models offering both electric and conventional power. But the industry EV leader, Toyota’s Prius, so far has retailed only 38,327 units during the first five months of 2018, compared to 46,366 a year ago, and 75,098 in the same period of 2016, before Ford and Chevy entered that niche market with competitive sedans.

Ford isn’t the first car brand to make a move away from sedans in the North American market, either. Fiat-Chrysler largely withdrew from the American five-passenger sedan market a couple of years ago, discontinuing the Chrysler 200 Models and the Dodge Dart – a step largely ignored by the automotive press.

To appreciate the dilemma facing Detroit and transplant auto marketers, consider that the Fusion, Ford’s standard-sized sedan, racked up only 71,300 sales in the first five months of this year, down from 127,749 in 2016, while Chevrolet’s Malibu sales dropped from 104,187 units to 59,850 units. All sales figures cited here are from tables in the industry’s trade paper, Automotive News, based on self-reported by automakers.

So what’s next? First, it will be many months before Ford dealers no longer have Focus and Fusion models to sell. Some observers think Ford’s April announcement was mainly directed at Wall Street, to show investors that Ford is serious about improving profits. Next, I would expect to see General Motors take a hard look at their own sedan models.

Ford has said that next year, probably in advance of the 2020 model year, it will introduce a new Focus model dubbed “Active,” with a higher, truck-like silhouette, focusing on more road clearance, elevated seating positions, and better driver vision – similar to older car models, before low-slung models became popular in the 1950s.
Posted: 6/27/2018

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