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Ford News



  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,952
    edited October 2013
    Kind of too bad - I'd take a flyer on some MSFT stock if he'd take over for Ballmer.

    "“The plan is he’s going to stick around,” said Ford, 56, of Mulally in an interview with Bloomberg Television on Monday. “I’m happy he’s sticking around. But we also feel really good about where we are in terms of succession.”

    Ford acknowledged that the CEO does not have a contract."

    Bill Ford: Mulally staying put, not going to Microsoft (Detroit News)
  • berriberri Posts: 4,000
    I just read that the Flat Rock plant which recently started producing Fusion's is already scheduling production shutdowns due to too much inventory. Apparently Ford has something like an average of 88 days of sales inventory at dealers. Ford blames it on Camry incentives. Might it also be that they have gotten too aggressive on pricing? I think that may explain the Black Friday deals at GM too. I think Ford is lucky the small crossover segment is still on fire because the Escape is priced kind of high versus it's Asian competition and has already had something like 7 recalls during it's first year out. I know my aunt is very happy now that she bought a comparably equipped Honda CRV for less money. She was initially reluctant to do that.
  • akirbyakirby Posts: 7,622
    Ford seems unwilling to engage in a price war with rivals just to maintain sales volume. Prior to Flat Rock coming online both the Fusion and Escape were maxed out on plant capacity. They'll weather the storm with decreased production until the fire sale is over and incentives return to normal.

    If Ford can max out an entire assembly plant selling vehicles at a high MSRP - why is that bad? Isn't that what Honda did in the 90s? I remember folks paying MSRP or higher for Accords back then and waiting in line for vehicles.
  • crkyolfrtcrkyolfrt Posts: 2,346
    Perhaps, but if you check recent depreciation value schedules, Honda is in the best class for lowest depreciation, and Ford is in worst class for greatest depreciation. This reflects on initial price point when the vehicle is new. Purchasers will reflect their confidence with their wallet.

    I think it is misplaced arrogance of Ford to not be more price competitive..especially when they are not spotless with regards to R&D and recalls and other issues... (fantastical EPA ratings) etc.
  • berriberri Posts: 4,000
    IIRC the output in Mexico wasn't all that high compared to a lot of other plants and it was the previous version selling out production which was priced much more competitively. The new version is a sharp looking car, but I'm not sure it's sharp enough to beat Camry, Accord, etc. at inflated pricing. I don't disagree on margin up to a point. But there comes a point where it can get too high and render a vehicle not very price competitive causing customers to lose interest. I don't think in today's economy many buyers are willing to pay big price premiums, especially for mainstream vehicles. There are many, many choices out there today. The old oligopoly is long gone.
  • akirbyakirby Posts: 7,622
    It's not misplaced arrogance - it's simply good business practice. You can hold out for a higher price and move fewer units or you can cut prices (add incentives) and build more vehicles but make less profit per vehicle. The Fusion's Average Transaction Price is more than $4K more than Camry already before the big incentives. Prior to the incentive war the Fusion was selling more than it ever had and doing it with much higher ATPs at the same time. Apparently consumers are willing to pay higher prices for Fusions so there's no reason for Ford to panic just because the competition starts an incentive war.
  • akirbyakirby Posts: 7,622
    Hermosillo put out 300K vehicles for the last 7 years on 3 shifts. That's pretty high. Remember they also exported Fusions to Latin and South America, not just the U.S. and Canada.

    You don't beat Camry and Accord in sales just by having a great vehicle. You need a steady stream of repeat buyers - multiple repeat buyers - to build up volume over time. That's what Accord and Camry did. 33% of Camry buyers are repeat buyers. Ford is only around 19% as this is only the second generation of Fusion whereas Camry is on its 4th or 5th generation. You have to build up that base of repeat buyers in addition to new buyers.

    Based on sales the first 9 months of the year, it appears that buyers are willing to pay higher prices for the new Fusion. $4K more than Camry by comparison. It wasn't until the competition added incentives that Fusion lost sales, which apparently means the competition was overpricing their vehicles, not Ford. Or they were overproducing. Either way that doesn't reflect negatively on Ford. A lot of people buy on price and they buy cheap. Ford doesn't want that business. They want higher ATPs and so far they're getting it even if it means reduced volumes temporarily. This incentive war won't continue.
  • crkyolfrtcrkyolfrt Posts: 2,346
    I agree that holiday season is a good time to lay off workers, IF they have decided to go that route (to ensure similar ATPs). But depending on how long it lasts, is Ford's build design disgruntled-workers-proof? For any prospectively hopeful Ford purchasers, one can only hope. During that time, it also allows buyers to shop and read the 'press'.

    I'm gonna stick with the arrogance word..but hey..if it makes you feel better..there have been times I have accused Honda of exactly the same thing. It's just that, in the end, I did vote my confidence level on Honda. Ford failed me and I swore to them if they turned their back on me in a cut-and-dried case of injustice that I would never forget it. And I haven't.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,952
    Ford also has to contend with currency manipulation, so there's another incentive Honda and Toyota have that Ford doesn't enjoy. (Bloomberg)
  • crkyolfrtcrkyolfrt Posts: 2,346
    I continue to be impressed with your ability to put your hands on pertinent links, Steve...spur of the moment even, most times..

    Some pretty passionate comments posted at the bottom of that one too..

    Obviously having taken it seriously.
  • berriberri Posts: 4,000
    Margin vs., volume is a tough issue to balance in real life. Too much or little of either one impacts finances. Plant utilization is another tough variable. You don't want to overproduce due to inventory carrying costs. While you can use layoffs to cut direct expenses, lack of production can lead to unabsorbed overhead since the fixed costs don't go away. Meanwhile frequent or extended layoffs can also have some impact as workers get rusty or po'd. I think they are adding Mustang to that plant, but if they can't operate it close to capacity routinely it will become a drag on profits offsetting some of the gain from higher selling margins. Lower volume can also raise the price for parts and materials from vendors. I guess the Fusion answer will play out over time as it's newness wears off. A good looking new model will almost always bring a better price (at least initially), but a good looking vehicle can also ironically get old looking quicker than a more conservative model sometimes. I think Hyundai is experiencing that with the Sonata.
  • akirbyakirby Posts: 7,622
    They're only temporarily stopping production. They do this all the time for various reasons. They're not laying anybody off.

    Mustang has always been at Flat Rock, and they're going to add the new Taurus and MKS within the next year or two. No problem keeping the plant busy.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,952
    edited November 2013
    Ford just added the Fusion line at Flat Rock this August (two shifts). Hermosillo couldn't keep up with demand. Now the supply has grown from ~65 days to ~88. Rumor is that the Fusion line will be idled for a whole month sometime next quarter.

    You have to wonder if the fall in sales last July was due to lack of vehicles or maybe something else was happening besides Camry incentives and the falling yen.

    Or maybe it's just a bit of oversupply and we (well, not Akirby) are over-reacting:

    "With a second factory -- in Flat Rock, Mich. -- online producing Ford Fusions, sales of Ford's hot mid-sized sedan soared 71 percent in October, pacing Ford Motor Co. to a 14 percent monthly sales increase.

    "The Fusion broke an October retail record in every one of our five markets nationally," said John Felice, Ford vice president of U.S. marketing, sales and service."


    Ford kicks up Fusion production, shares Mustang factory (USA Today)

    Ford to Idle Fusion Production at Flat Rock Plant for One Week (Motor Trend)

    Hot Fusion paces Ford sales
    (Automotive News)
  • akirbyakirby Posts: 7,622
    They're just taking steps to prevent over-supply. I'm sure Camry incentives are taking some sales but that's all temporary. Hermosillo is still going full tilt as far as I know just like it was earlier this year. Note that this is what Honda has always done - only make as many as you can sell at a healthy price without big incentives. I think toyota is desperate to keep the sales lead even if it means lower profits. Sounds just like GM and Ford a decade ago.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,952
    It was just a year ago that the Chinese were boycotting Honda and Toyota over a territorial dispute.

    Now, a year later, there's a spat over an "air defense" zone between China and both Japan and South Korea (and the US). Sounds like the issue is dissipating but if it heats up, that could hurt the Japanese automakers.

    How that would affect Ford, I don't know.
  • akirbyakirby Posts: 7,622
    Nicely updated and more svelte but still unmistakably mustang....

    Base engine - 2.3L ecoboost 300 hp/300 lb ft

  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,952

    Da winna again.

    "Ford expects to retain its title as the best-selling vehicle brand in North America for the fourth year in a row, thanks to such key models as the 2013-'14 Ford Fusion, 2013-'14 Ford Escape and 2013-'14 Ford Fiesta.

    The automaker said its Ford brand expects to sell more than 2.4 million vehicles in 2013, well ahead of 2nd-place Toyota.

    "We're seeing double-digit sales growth in cars, trucks and utilities," said John Felice, vice president of Ford's U.S. marketing, sales and service. With 16 launches in 2014, "we're looking to keep our sales momentum going."

    Ford Poised To Be Best-Selling U.S. Auto Brand Again, Company Says

  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,952
    edited January 3

    "The gains by Detroit are striking Toyota and Tokyo-based Honda in the hearts of their lineups. Deliveries of Ford’s Fusion climbed 22 percent from January to November, outpacing gains of 1.3 percent for Camry and 11 percent for Accord. And Fusions sold for an average of $26,378 last year, a premium of $897 to Accord and $2,224 to Camry, the lock to be the top-selling car in the U.S. for a 12th consecutive year.

    “From so many views, it shouts out ‘I’m a $60,000 car,’” Smith, the Californian, said of the white-platinum Fusion hybrid that he bought for $33,500. “The Aston Martin look really draws attention.”

    The Fusion is a standout in a crowded field of more competitive passenger cars from Detroit. Deliveries of GM’s Cadillac cars jumped 55 percent last year through November, and Chrysler’s Dodge line of cars boosted sales by 31 percent. Those were the two biggest gains of any car brand with at least 20,000 deliveries last year."

    Detroit Gains Ground in 2013 as Ford Fusion Sets Growth (Bloomberg)

  • akirbyakirby Posts: 7,622

    What you're seeing now with Fusion is what we saw previously with Accord and Camry. You build up more and more repeat buyers with each generation to go with the new buyers. I expect Fusion to plateau soon until the next refresh. Ford no longer cares about being #1 - they're more focused on profits and ATPs than overall sales crowns.

  • xwesxxwesx Fairbanks, AlaskaPosts: 8,268

    @akirby said: Ford no longer cares about being #1 - they're more focused on profits and ATPs than overall sales crowns.

    I think that's true. When successes happen, it is surely a bonus, but taking a title simply means you get a huge target painted on your back!

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