From the July 2018 issue

Ford’s announcement, in late April, that it will phase out all its passenger cars except for the Mustang and the Focus Active might look like a timely and smart response to shifting consumer preferences for crossovers over cars. It is not.



Car and Driver

This move has been a long time coming, whereas the overwhelming popularity of crossovers is a relatively new and fragile thing; bigger vehicles wouldn’t account for two-thirds of new-car sales if it weren’t for suppressed fuel prices, CAFE loopholes, a heat-retaining economy, and the dynamic improvements to the vehicles themselves. But Ford’s impulse to simplify, to streamline itself into what could essentially become The Mustang and F-150 Company, has roots in the administration of the man widely regarded as Ford’s 21st-century savior.

When Alan Mulally took over in 2006, Ford was a drunken giant of a company, with a menagerie of far-flung luxury brands from which it proved incapable of extracting maximum value. Tata has made much better use of Jaguar and Land Rover, and Geely of Volvo, than Ford ever could, despite its economies of scale. Mulally saw the complexity of the Ford he took over and deemed it unmanageable; he divested the portfolio of its premium brands and pared it down to “One Ford.” Ford would be it, the true focus of the company. Lincoln would be figured out eventually.

Without Volvo, Jaguar, Land Rover, Aston Martin, and even Mercury commanding higher prices, Mulally was forced to charge nearly $40K for top-trim Fusions and Tauruses. Their higher MSRPs took the traditional American sedan out of the traditional American budget, suppressing sales and increasing incentives. Which, in turn, led to longer product cycles to pay back those cars’ engineering and marketing investments. And stale cars on showroom floors only led to further erosion of demand.

Two CEOs later, Ford looks up and declares: “Nobody’s buying sedans!” as if this wasn’t a hand it dealt itself long ago, and as if the truth isn’t more nuanced. But one thing’s clear: Reducing the breadth of offerings will stifle Ford’s flexibility. It could also intensify the doom cycle.

What happens to SUV sales if gas goes up to $5 a gallon? What happens if a new generation of buyers comes to see crossovers as minivan-lame? What happens to Ford if car enthusiasts, those powerful influencers of purchases, feel abandoned by the brand and stop recommending its vehicles? “You can have any color you want, as long as it’s black” is no vision for the future.

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