Ford to stop making sedans for North America by 2022
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The automaker said the changes, meant to improve profitability, include getting rid of all cars for the North American market except for the Mustang sports car and Focus crossover.
Automaker Ford Motor Co. will shed the vast majority of its North American car lineup as part of an ambitious plan to save money and make the company more competitive.
As reported on April 26 by the Associated Press, the changes include getting rid of all cars in the region during the next four years except for the Mustang sports car and a compact Focus crossover vehicle, CEO Jim Hackett said as the company released first-quarter earnings.
According to Hackett, the decision was due to declining demand and profitability. It means that Ford will no longer sell the Fusion midsize car, Taurus large car, CMax hybrid compact and Fiesta subcompact in Canada, the U.S., and Mexico.
Exiting most of the car business comes as the U.S. market continues a dramatic shift toward trucks and SUVs. Ford could also exit or restructure low-performing areas of its business, Hackett said.
Detroit, Mich.-based Ford has found another US$11.5 billion in cost cuts and efficiencies, bringing the total savings to US$25.5 billion expected by 2022, chief financial officer Bob Shanks told the Associated Press. Savings will come from engineering, product development, marketing, materials and manufacturing. The company previously predicted US$14 billion in cuts by 2022.
Ford also plans to optimize digital marketing and offer greater discounts on vehicles, as well as putting multiple vehicles on five flexible global architectures in the next few years. The company currently builds vehicles on nine platforms that aren’t as flexible.
One-third of Ford’s belt-tightening will come by the end of 2020, Ford said. Ford also promised to raise its operating profit margin from 5.2 per cent to 8 per cent by 2020, two years earlier than a previous forecast. That includes a 10 per cent pretax margin in North America.
The company said its first-quarter net income rose 9 per cent due largely to a lower income tax rate.