Ford will drop Focus, Fusion and other sedans for North American market

27 April, 2018, 01:16 | Author: Corey Lynch
  • Ford to report earnings after the bell — here's what Wall Street expects

DETROIT - Ford Motor Co. on Wednesday said it plans to stop selling all Ford brand sedans in North America and that it is almost doubling its cost-cutting target by 2022 from the plan it laid out.

Ford plans to no longer sell the Fiesta, Taurus, Fusion and the regular Focus in the US and Canada. The 9% increase in quarterly profit can be nearly entirely attributed to a drop in the automaker's effective tax rate to 9% from 28.6%, Ford officials said.

Wall Street applauded the move, sending Ford shares 2.5 percent higher in early Thursday trading.

The announcement came as Ford said it earned a first-quarter profit of $1.7 billion, a 9% increase compared to the same period previous year.

For example, a Fusion starts a little above $22,000 and gets 21 miles per gallon in the city and 32 miles per gallon on the highway, Ford's website says.

Ford Motor Co (F.N) on Wednesday outlined a plan to cut costs and boost profit margins at a faster pace than previously announced, which includes dropping traditional sedan models in North America that have become increasingly unpopular with consumers. Which means outside of trucks, utility and commercial vehicles (which Ford reckons will take up 90 per cent of Ford's North American portfolio by 2020), there'll be just two actual cars in Ford USA's range.

"We're not going to invest where it doesn't make sense", CFO Bob Shanks said.




It will enable the company to cut $25.5billion in costs by 2022, up from $14 billion in cuts it announced last fall.

"We have seen the trend go where Ford and even preowned sales are gearing towards the truck and SUV more so than the sedan".

Executives say Ford could also exit or restructure low-performing areas of its business, in an aggressive effort to save costs.

Ford Motor Co.is pretty much getting out of the auto business. The Asia Pacific region will probably lose money in the second quarter before returning to profit in the back half of the year.

The decision was made after a long decline in sales for cars like hatchbacks and sedans.

Joe Hinrichs, president of global operations, said Ford plans to build a new product its Hermosillo plant in Mexico when it quits production of the Fusion sedan, and will also build a new battery electric vehicle in Mexico.

Ford finds itself on a road similar to the route Fiat Chrysler Automobiles NV followed to pass Ford in North American profitability.

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