Ford Should Discontinue Some Models to Make Profits During the Pandemic
The COVID-19 pandemic has done a lot of damage to not just lives but also to the automotive economy. This unfortunate situation presents companies with an opportunity to create a new plan going forward. For Ford, that may mean cutting a few models from its lineup.
Don’t worry, Ford trucks are safe
As Ford will readily admit, trucks are its bread and butter. Not only is it well-known for its trucks, but its trucks also make a lot of money. This is for two reasons in particular. One, trucks generally cost more, which means that each truck sale will earn quite a bit of money. And two, Ford’s trucks are extremely popular.
In fact, the best-selling vehicle in America is the F-Series. The runner-ups are all trucks too, just trucks from different brands. With that high volume of sales and the high price tag for each truck, Ford simply makes a lot of money from its trucks. Unless something drastic happens, the popular automaker will likely keep producing trucks until Americans grow sick of them, which may not happen for a while.
The models that should be cut
As Trucks.com wrote, the five Ford models that make the most money are the F-150, the F-250/350, the Ranger, the Transit, and the Focus. That said, while these cars make Ford the most money, Trucks.com actually said that the Focus isn’t a profitable car for Ford and that making the Focus actually loses Ford money. While many people certainly love the Focus, if Ford wants to make the most money that it can, then cutting the Focus isn’t a bad idea.
Trucks.com doesn’t go into details about which models in Ford’s 47-car lineup loses money, but it does say that most of those models are not profitable. The only cars that seem to make money are the larger ones, such as its trucks and its SUVs. For example, the Explorer was mentioned as a profitable SUV for Ford, so it’s likely safe.
But, like Trucks.com said, “Outside of Ford’s 10 best models, the remaining 37 models lose on average nearly $800 per unit.” This means that sedans such as the Fusion or the Taurus are likely not profitable, so they should be cut from the lineup.
However, there is a reason why it may be worth it to keep these models around. Many customers buy sedans first before they buy a bigger car, and if it can make fans out of those customers, then they may buy a truck or SUV down the line.
The pandemic shows companies what’s important
As Trucks.com said, this pandemic is serving as a chance for companies to evaluate themselves and to see what they actually want to do. The vast majority of Ford’s models are money losers, so it’s kind of crazy that the automaker is keeping many of those models around in the first place. If there’s no good reason to keep those models around, then it may just be a matter of poor leadership on Ford’s part.
However, it’s also possible that Ford knows how unprofitable some of its models are, but it doesn’t care. Perhaps it wants to be known as more than just a truck and SUV company, so it builds and sells cars that don’t make much money to prove that point. Perhaps for the automaker, what’s important is serving its customers, and it knows that it has customers who want a Focus, even if making that Focus will lose Ford some money.