OT: Ford is basically giving up on US car business, and GM is not far behind
Papi_Chulo
Miami, FL (or the nearest big-booty club)
Ford's plan to reduce its passenger car lineup to just two models, and GM's difficulty selling passenger cars in the U.S. show how much tastes are drifting toward trucks, SUVs and crossovers.
Ford will only update the Focus Active crossover and Mustang for the U.S. market, while GM called out a challenging passenger car environment.
So is it really the end of the American car on its home turf?
From the way Detroit's major executives are talking, it would seem so.
Ford said Wednesday it will only offer two new cars in North America over the coming years — its iconic Mustang and the Focus Active, a rugged-looking hatchback that has already debuted in Europe, and somewhat resembles the Subaru Crosstrek or the Buick Regal TourX.
GM is moving along the same lines.
"I think we have been on this path for a number of years," GM CFO Chuck Stevens said on a call with reporters on Thursday, after the largest U.S. automaker released first-quarter earnings.
Many of Fiat-Chrysler's biggest successes have been SUVs in recent years, evidenced by the growth of its Jeep brand.
"Virtually eliminating Ford's NA car portfolio makes a lot of sense, in our view," said Adam Jonas, an analyst at Morgan Stanley. "No more Fusion. No more Focus. No more Fiesta. No more Taurus."
GM still makes quite a few cars. For now, Chevrolet alone still sells somewhere around 12 car models if you count Corvette, although there have been rumors and news it will cut or end production of at least some of those. Buick has some sedans and a crossover that looks a lot like a wagon, and Cadillac has so many sedans industry observers and dealers say it missed the crossover trend.
And despite the fact that American companies are reshaping their lineups, sedans will still form a substantial portion of the vehicles sold in the U.S. for the foreseeable future.
"Although passenger car segments have declined over the last number of years, they are still very important," GM's Stevens said Thursday. "Small cars are important internationally, and they still make up a chunk of sales in the United States."
But crossover sales were largely what drove GM's earnings beat on Thursday, and the automaker's income was down because it had spent a lot of time retooling its factories — to build more trucks. Buick's best-selling model is the subcompact Encore crossover, and Cadillac's biggest debut this year has been the XT4, a model the company is making to finally catch up with rivals already in the luxury crossover segment.
Throughout the rest of 2018, GM's crossover sales should be strong enough to support margins despite costs from new truck launches, CFRA analyst Efraim Levy said in a note Thursday.
By 2022, almost 73 percent of all consumer vehicle sales in the United States are expected to be utility vehicles of some sort, and about 27 percent will be cars, according to auto industry forecasting firm LMC Automotive.
By that same time, LMC automotive expects 84 percent of GM's U.S. sales volume will be SUVs, crossover and trucks. Ford will be at 90 percent, and Chrysler at 97 percent.
So sedans and other cars are expected to still form more than a quarter of all consumer vehicle sales in the U.S., but the overall trend appears to be that American companies especially are giving up trying to sell cars to Americans.
What will they sell instead?
Detroit is already strong in pickups and large SUVs, such as the Cadillac Escalade and Lincoln Navigator, which is enjoying remarkably brisk sales after its first complete redesign in more than a decade. The Big 3 control almost 85 percent of the domestic pickup market, according to LMC Automotive, despite competitive products from foreign brands such as Toyota and Nissan.
And Ford, for example, will also double down on "authentic off-roaders," Ford President of Global Markets Jim Farley said on a conference call Wednesday. This includes trucks like the Raptor, and the upcoming reintroduced Ford Bronco, and an unnamed SUV. GM and Chrysler are entering this segment, too.
The second-largest U.S. automaker also plans to refresh its current lineup of SUVs and crossovers and create new products that fill "white spaces" in the market, essentially meaning the company will try to combine or tweak various designs or combinations of features to find new segments no other company is targeting yet. This means combining various elements of both cars and SUVs in ways that distinguish Ford's vehicles from what is already out there.
"We will have a very diverse passenger car business," Farley said on the call. "It just won't be traditional silhouetted sedans that tend to be commoditized."
In ditching cars and pursuing this strategy, Ford made a difficult choice, said Kelley Blue Book analyst Rebecca Lindland.
"I think this is one of the challenges that the Big 3 has faced, that they really had a tough time finding their way on the car side," Lindland told CNBC. "They have struggled for too long to be profitable, to be a full-line manufacturer, and they have made the hard decision to start over. The problem is they are so far behind."
Farley is very smart, Lindland said, and Ford has a catalog of vehicle platforms around the world they can search through to quickly develop some products. But it will be challenging.
"Even though they are starting fresh, they have to accelerate their timeline to get their products as soon as possible," she said. "I am driving a Toyota C-HR right now, which I believe is the kind of car they are thinking about making."
https://www.cnbc.com/2018/04/26/ford-is-…
Ford will only update the Focus Active crossover and Mustang for the U.S. market, while GM called out a challenging passenger car environment.
So is it really the end of the American car on its home turf?
From the way Detroit's major executives are talking, it would seem so.
Ford said Wednesday it will only offer two new cars in North America over the coming years — its iconic Mustang and the Focus Active, a rugged-looking hatchback that has already debuted in Europe, and somewhat resembles the Subaru Crosstrek or the Buick Regal TourX.
GM is moving along the same lines.
"I think we have been on this path for a number of years," GM CFO Chuck Stevens said on a call with reporters on Thursday, after the largest U.S. automaker released first-quarter earnings.
Many of Fiat-Chrysler's biggest successes have been SUVs in recent years, evidenced by the growth of its Jeep brand.
"Virtually eliminating Ford's NA car portfolio makes a lot of sense, in our view," said Adam Jonas, an analyst at Morgan Stanley. "No more Fusion. No more Focus. No more Fiesta. No more Taurus."
GM still makes quite a few cars. For now, Chevrolet alone still sells somewhere around 12 car models if you count Corvette, although there have been rumors and news it will cut or end production of at least some of those. Buick has some sedans and a crossover that looks a lot like a wagon, and Cadillac has so many sedans industry observers and dealers say it missed the crossover trend.
And despite the fact that American companies are reshaping their lineups, sedans will still form a substantial portion of the vehicles sold in the U.S. for the foreseeable future.
"Although passenger car segments have declined over the last number of years, they are still very important," GM's Stevens said Thursday. "Small cars are important internationally, and they still make up a chunk of sales in the United States."
But crossover sales were largely what drove GM's earnings beat on Thursday, and the automaker's income was down because it had spent a lot of time retooling its factories — to build more trucks. Buick's best-selling model is the subcompact Encore crossover, and Cadillac's biggest debut this year has been the XT4, a model the company is making to finally catch up with rivals already in the luxury crossover segment.
Throughout the rest of 2018, GM's crossover sales should be strong enough to support margins despite costs from new truck launches, CFRA analyst Efraim Levy said in a note Thursday.
By 2022, almost 73 percent of all consumer vehicle sales in the United States are expected to be utility vehicles of some sort, and about 27 percent will be cars, according to auto industry forecasting firm LMC Automotive.
By that same time, LMC automotive expects 84 percent of GM's U.S. sales volume will be SUVs, crossover and trucks. Ford will be at 90 percent, and Chrysler at 97 percent.
So sedans and other cars are expected to still form more than a quarter of all consumer vehicle sales in the U.S., but the overall trend appears to be that American companies especially are giving up trying to sell cars to Americans.
What will they sell instead?
Detroit is already strong in pickups and large SUVs, such as the Cadillac Escalade and Lincoln Navigator, which is enjoying remarkably brisk sales after its first complete redesign in more than a decade. The Big 3 control almost 85 percent of the domestic pickup market, according to LMC Automotive, despite competitive products from foreign brands such as Toyota and Nissan.
And Ford, for example, will also double down on "authentic off-roaders," Ford President of Global Markets Jim Farley said on a conference call Wednesday. This includes trucks like the Raptor, and the upcoming reintroduced Ford Bronco, and an unnamed SUV. GM and Chrysler are entering this segment, too.
The second-largest U.S. automaker also plans to refresh its current lineup of SUVs and crossovers and create new products that fill "white spaces" in the market, essentially meaning the company will try to combine or tweak various designs or combinations of features to find new segments no other company is targeting yet. This means combining various elements of both cars and SUVs in ways that distinguish Ford's vehicles from what is already out there.
"We will have a very diverse passenger car business," Farley said on the call. "It just won't be traditional silhouetted sedans that tend to be commoditized."
In ditching cars and pursuing this strategy, Ford made a difficult choice, said Kelley Blue Book analyst Rebecca Lindland.
"I think this is one of the challenges that the Big 3 has faced, that they really had a tough time finding their way on the car side," Lindland told CNBC. "They have struggled for too long to be profitable, to be a full-line manufacturer, and they have made the hard decision to start over. The problem is they are so far behind."
Farley is very smart, Lindland said, and Ford has a catalog of vehicle platforms around the world they can search through to quickly develop some products. But it will be challenging.
"Even though they are starting fresh, they have to accelerate their timeline to get their products as soon as possible," she said. "I am driving a Toyota C-HR right now, which I believe is the kind of car they are thinking about making."
https://www.cnbc.com/2018/04/26/ford-is-…
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41 comments
Good thing is the government just gave the 1%'s a huge tax break while, at the same time, increasing spending. Good times for them. Bad times for anyone needing a stable SS or Medicare in the long term. Time to party.
i have a couple of old suburbans that i would prefer to be driving most all the time if gas were a lot cheaper.
Poof! problem solved.
I think it will collapse soon. Either on its own. Or via a Koch-brothers Constitutional Amendment to require a balanced federal budget. If so, kiss non payroll SS, medicare, medicaid, and pensions goodbye.
reference:
https://www.prwatch.org/news/2017/06/132…
https://www.economist.com/news/briefing/…
http://bba4usa.org/
https://en.wikipedia.org/wiki/Convention…
With Ford expect the same thing. The cuts come first --the new cars will be more global in design when they come to market.......and no it isn't good for the USA.
I'm mostly a Toyota guy and have been for years--I owned a Ford T Bird which was a great car but the last couple of GM's ( all prior to going Toyota) should have been painted yellow with little texture bumps all over them...........
I hate SUVs. I'm sure they're big and comfortable, but they're also slow, hard to maneuver and not nearly as good in bad weather as everyone thinks. My Cruze corners at speed, uses far less gas and has more than enough space for everything I carry around. My only annoyance is that I can't see over all of you folks driving cars way bigger than you need, and can't get around you when you're clogging lanes and going five under the speed limit because you're afraid you'll tip over at the next turn. I've got places to go, the club included.
Buy smaller cars, people.
But I'm now considering buying a small-SUV (the 2018 Honda CRV) b/c it's easier to get in and out of - I look after my 88 y/o mom and my 81 y/o aunt and these days they have a harder time squatting down to get in and out of a sedan which is a bit lower - the small SUVs like the CRV have the seat more or less at hip/butt-level so just slide in and out.
BTW my dad as you might remember sadly passed on less than two months after I purchased the vehicle.
I checked out the Honda CRV small SUV at the recent Ft Lauderdale autoshow - def not a chick-magnet but seems pretty-practical for what i need - I practiced getting in and out of it and found it easier than anything else I saw (car or SUV) - it's very roomy for a small-SUV and the doors open at 90-degrees like it was the door to a house/home
I'd suggest driving a Toyota/Lexus SUV and then commenting on how slow and sluggish they are compared to AB-POS. The last two I bought get a fair amount of compliments, some surprised at how well they run.
And no offense but the Cruze is built at Lordstown Ohio---original factory of the Chevy Vega--many of the same workers decades later--same high standards of quality I'm sure.
https://en.wikipedia.org/wiki/Fiat_124_S…
SJG
SJG
But where I am f2f, things are unusually quiet, dead.
Don't know why. Feels strange.
SJG
Sadly the UAW has shot itself in both feet. A decent portion of the cost of new us autos goes to keeping the coffers of the UAW filled. If you eliminate the UAW overhead - they could manufacture autos with competitive prices - that aren’t substandard quality.
Big labor has killed another us industry.
SJG
shai - you're rolling in an AMG. That's a tight ride. My old SUV used to pack a powertech V8, but it was soccer mom mobile silver, lol. The new hooptie truck has a gm vortec six fucking liter, a box of hollow points, and g-d willing a box of twinkies.
my main ride is a car, a hatchback, with a manual and a real clutch pedal. those imprezzas are really nice in the snow, but for the really deep stuff, I break out the truck.
https://www.youtube.com/watch?v=mTKrB0DO…
A congressman comes running back to his auto industry sponsor. "You don't have to worry, I've gotten you want you want. There will be no new safety or fuel efficiency standards passed this year."
The sponsor says, "Now, can you get it so that the foreign makers won't voluntarily raise their safety or fuel efficiency standards."
SJG
King Crimson, Lark's Tongue in Aspic
https://www.youtube.com/watch?v=CVb2tnFN…
OkCupid
https://theblog.okcupid.com/your-looks-a…
Record Amount of Microplastic Found in Arctic Sea Ice
https://weather.com/science/environment/…
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http://photobucket.com/gallery/user/pus5…
So fuck 'em. Toyota and Honda have dominated the U.S. sedan market for the last several years for a reason. It's not like we're losing automotive jobs because of it. Toyota is assembling its sedans in MS and KY and Honda is doing the same in OH and IN.
SJG
Rolling Stones - Under My Thumb LIVE Tempe, Arizona '81
https://www.youtube.com/watch?v=03TYbIma…
ROLLING STONES - Sympathy For The Devil (Live 1969) HD
https://www.youtube.com/watch?v=lj6y6toh…
@rick dugan- How long do you think a transmission should last ? The longest I've kept a car was ~140K miles (Mustang, manual transmission, no clutch problems). Had a 90's Deville with extended warranty that had problems just before 6 yr/70K miles point.
Others, please feel free to chime in on your experiences.
Minnow, I've put upwards of 176K miles on a clutch without having to replace one, and it was used before I got it. Sadly I've had to put a new clutch in this 3 y/o CPO used Subraru (was 2 y/o when I bought it). I wasn't thrilled but maybe the car's clutch was misused before I got it? My jeep and my other mustang went to the junkyard without needing clutches (130K and 176K miles, respectively). The 1990 Mustang GT got a new clutch from the original owner when I bought it in 1998 with 50K miles. It has 84K miles now, without issues.