and how are they gonna meet the CAFE standards with nothing but trucks and SUVs? or will CAFE go the way of the sedan?
Posted on 04/26/2018 2:35:14 PM PDT by Red Badger
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, after Ford reported first-quarter earnings. 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."
and how are they gonna meet the CAFE standards with nothing but trucks and SUVs? or will CAFE go the way of the sedan?
Toyota, Honda, Hyundai, Kia.
Get rid of all CAFE standards and I think big cars would probably do well.
CAFE does not apply to trucks and SUVs. That's another reason cars are gone!
My first car had a bench seat. I was 6'2" tall and met my wife who was 5'2" tall. If we took a trip of any length I would have to sit in the back seat when she drove as the front bench seat was too close to the dash.
That segment has already been taken by SUVs. Nobody wants a big sedan like that now.
RE: One China begins selling cars in the US, it’s all over.
They already do. They’re called Volvo’s
Good. Time for basic cars that get us where we want to go without all of the driver surveillance gadgets and other electronic junk that add to the vehicle’s costs, fragility and difficulties in maintenance.
you sure?
The CAFE achieved by a given fleet of vehicles in a given model year is the production-weighted harmonic mean fuel economy, expressed in miles per USgallon (mpg), of a manufacturer’s fleet of current model year passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 pounds (3,856 kg) or less (but also including medium-duty passenger vehicles, such as large sport-utility vehicles and passenger vans, with GVWR up to 10,000 pounds), produced for sale in the United States.
Domestic designers are just producing stale bread.
The market is flooded with too many used cars anyway.
They are just holding down production to outlast Trump and continue their cheap over seas production later after he is gone.
Don’t forget the kids who just got their license issued today.
I don’t think I would ever buy a sedan again, domestic or otherwise.
The problem with cars is they're all too small with too little leg and head room.
JMHo
We owned a Chevette when we were young and flexible. When we need a new car, we always look at sedans, but we just can’t fit in them comfortably anymore. We now own a minivan and a crossover. We need the head and legroom, and don’t have to step down to get in or up to get out.
The unions killed the auto industry. Everything they touch turns to crap.
Time for a change in leadership at General Motors. Mary Barra is not “too cute to fail”.
My Ford dealer says they have a waiting list of people who want a clean used Town Car. Sure, gas mileage sucks but, it’s still a beautiful car.
The new Continental doesn’t seem to have sold well. I hear they are not going to keep making them.
I have two Town Cars, both 2008. My wife’s has 76,000 miles..mine has 27,000, (that’s right, 27,000)...never need/want another car..exquisite American luxury sedans.
Every time a person in a big fat arse truck or SUV BACKS IN to their parking spot, THIS IS SELF-ADMISSION THAT THEY HATE THEIR OWN VEHICLE BECAUSE PARKING IT IN A PARKING LOT IS A PAIN IN THE BUTT SO THEY GET THE HARD PART OF PARKING IT OUT OF WAY FIRST BY BACKING IN, MAKING IT EASIER TO PULL AWAY IF THEY'RE POINTED 'NOSE OUT' RATHER THAN ARSE OUT.
Mazadubu right for you
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