Ford Axes Its Passenger Car Lineup: A Precursor Or Opportunity For GM?42
After months of rumors and uncertainty, Ford dropped a bombshell on Wednesday. The automaker announced it will “not invest” in next-generation sedans for North America. Translation: the Ford Fiesta, Focus and Fusion will soon die off.
Ford Authority broke the news, though the automaker will still bring the crossover-like Focus Activ to North America. The hatchback and sedan are goners and were once thought to be imported to the U.S. from China. The Mustang will also soldier on as the brand’s sports car.
Immediately, we ponder the ramifications this could have at General Motors. Earlier reports suggested GM was already mulling the death of numerous passenger sedans, including the Buick LaCrosse, Chevrolet Impala, Cadillac CT6 and Chevrolet Volt. More recently, reports surfaced adding the Chevrolet Sonic will exit production this year. The Chevrolet Impala is supposedly inching toward the chopping block as well.
The market has consistently moved to more crossovers, trucks and SUVs and left little room for passenger car sales to grow. However, we can’t help but recall the financial downturn when consumers moved to less expensive small cars. Fuel prices likely won’t stay low forever, either.
Time will tell how GM responds to the decision, but it appears Fiat-Chrysler Automobiles was ahead of the curve within the U.S. auto industry when it axed the Chrysler 200 and Dodge Dart.
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General Motors is in a good spot, if they keep the Malibu and Cruze around. They can definitely grab sales from what Ford is leaving out there.
Chevy needs to have at minimal a car line up of Cruze, Malibu, Camaro.
Buick maybe have at least the Regal.
Cadillac being a luxury division needs at least 2 sedans and 1 coupe.
Ford basically will only have one car in the line up (Mustang) as the upcoming Focus Activ is like a hatchback type crossover.
sad to see the CUV’s taking over…
Nope, GM should eat Ford’s lunch for this. Offer more sporty Chevy cars while cleaning Ford’s clock on the CUV front.
Opportunity! Less competition is always a good thing. Refine the sedan lineup, don’t completely cut it like Ford did. Remove overlapping sedans between brands, increase their utility and efficiency, and they will sell just fine. Here are some of the changes GM could make:
Large sedans: Keep Impala and CT6, cut Lacrosse and XTS. Lacrosse fits in a weird spot. Bottom trims compete with Impala, top trims edge in on Cadillac. Refine Impala with a new generation – give it AWD as an option, liftback design for usability, and maybe even consider electrification. CT6 lives on as the top luxury sedan at GM.
Sub-compacts: Sonic and Spark – gone. Just too small. Instead, introduce a small SUV-type offering like the Focus Active that is similarly affordable.
Midsize and Compacts: Regal is likely gone after this generation since Opel is out of GM. That leaves Malibu as GM’s midsize offering. Similar to Impala, give it more practicality (AWD, liftback). Cruze can live on as the smallest GM sedan. Volt, change it to an electric SUV.
Ford, Chrysler, and Dodge are all leaving a market that (while shrinking) needs to be served. GM can’t leave Toyota and VW to sweep up all these sedan buyers. Also, in the event of some major consumer behavior change, economic crisis, or gas price rise, GM can be hedged against these risks and have the offerings as soon as the people need them. It doesn’t make sense for GM to cut all sedans like Ford – they just need to refine the portfolio.
You have it all backwards. Cars still sell in China and in the near luxury and luxury segments. For FWD cars, it’s the Buicks they should be keeping not the Chevy’s. The Impala, Spark, and Sonic seem like the best to cut loose.
first and foremost, screw china no one cares about them. let them keep their POS toyotas and hondas. American companies should focus on America. I’m not saying we shouldn’t have business with them but you take care of home before you take care of the streets.
Don’t cut the XTS. Cut the CT6. the CT6 is too small to be a “large car” and everyone who drives them LOVES them, but everyone who owns one doesn’t.. haha. Golf clubs barely fit, the trunk is tiny, and 95% of those buyers don’t care about tip top performance.
The amount of R&D they have to sink into the CT6 to be competitive is sickening. The CT6 requires constant attention while the XTS can be refined every 8 years and still be competitive.
They wanted to kill the XTS, but the thing just keeps on selling… more than 50k last year. I know thats not a lot compared to some cars, but it is when you:
1. Consider the lifecycle of that car
2. consider that the CT6 only sold 10k… that means the XTS outsold it 5 to 1 last year
Caddy can’t kill the XTS because there’s no direct competition for it, while competition against the CT6 is FIERCE. They can’t move more than 1015 CT6s/month since 2016..
I feel like enthusiasts want to “love” the ct6, but customers don’t. It was a bit of a flop. On the contrary, XTS’s are hated by enthusiasts, but buyers vote with their wallets and keep buying them up!
If you counted all the grains of sand on the beach, it still wouldn’t add up to how wrong you are.
I know… facts hurt when they don’t align with our fantasy beliefs.
The fact being the XTS is getting cut, and there’s not a damn thing in that fantasy mess you posted above that was even remotely close to true.
Mr.R I’ve never read a comment to a post that i’ve agreed with more. God Bless you sir
it will definitely be interesting to see what the General does here. There should be lessons learned from the exit of mid-size pick-up market that both GM and Ford took. Once you leave the market you are virtually handing it over to the Asian auto makers who already have a strong hold on sedans. As the writer noted, gas price will not stay low forever, as they have inched up almost over 40 cents in my neck of the woods the last few months (they jumped 10 cents yesterday), reclaiming market share in a segment once you have left is an uphill struggle as we have seen the Colorado/Canyon reintro.
I totally get the economics of this, short term yes a good move but the question really is with the long term.
Just saw a news that say GM will Foucus CUVs and trucks and plain to axe some passenger cars…. Why GM still thinks Ford doing right way and follow them?? This is biggest mistaken.
Some, not all, some was expected. Still smarter than what Ford is doing. I could see GM sticking to a 2 car line up per division, 3 maybe for Chevrolet and Cadillac tops.
Impala(or Chevelle or ??)RWD
If Ford leaves the car market, the foreign brands will take it up. I see many Kia and Hyundai cars near my home. There is a Kia model that copies the Ford Fusion and sells for less. Henry Ford would be crying if he could!
Chevy could adopt Cadillac’s tweener strategy: Cruze and Malibu, bigger than the current ones.
The Malibu could even gain a luxury-sport version called Impala. That’s such a historic name to be thrown out.
FCA at least kept thier full size sedans. Even though thier outdated they still sell very well. Ford is making a mistake by getting rid of all thier sedans and at least not keeping one or two model’s on the lots. I noticed the Continetial was left off this list. Since it shares the platform with Fusion and that will be dead soon, I think there is going to be a next gen Conte on the new Aviator platform. There is no way they are just going to slap some suicide doors on the existing car and call it a day.. The current Continental is a stop gap for something better coming up like the XTS was.
As far as GM this would be a good time to refresh thier sedan lineup and take all that business that Ford will lose. Not everyone wants a awful looking CUV. But seeing how Barra operates, I would not get to excited to think GM will stick around with sedans much longer either.
The future most automakers in the US will be killing most of their cars. The Impala is not for long the Lacrosse I expect will soon die too.
In North America cars are a hard sell and most will vanish or be replaced by a CUV.
Not short sighted just business. Now should they need cars again they are selling overseas and could be brought back quickly.
The deal about gas prices going up is a Myth. most of todays small CUV models get as good or better MPG than many cars. GM has cut a ton of weight and we are not talking Yukons and Tahoes only.
The Real mistake would be for GM to stay at the party too long and have a back log of cars they can not sell at a decent profit much like the Cruze is now.
To be honest the Malibu and Camaro would cover most needs at Chevy and even then they will be lower volume models. There will be the EV models too and many of them will move to CUV models like the Volt too.
It is no longer enough to just make money you have to make the most money on investment to survive and that is what they all are doing.
look for even the Asian brands to cut models and reduce numbers as they are not selling as many cars as CUV either.
What it to change get people to buy more cars but at the size and price people want more utility anymore. my god I have a Malibu I have a large trunk but I have to unbox many items to get them in the opening.
Good assessment Scott. One additional note: We never have to worry about fuel prices going high for the long run. Electric (and perhaps hydrogen in the future) is here to stay (a great thing for our environment). Most oil is gone by the 2040s, and forward thinking vehicles and nations are moving that way.
Everything keeps changing…
Well EV is here with faster but still slow steady growth. Hydrogen is still not cheap enough yet.
As of now ICE is still here for the long haul and we are not going to be out anytime soon. Automakers all are planning to continue to invest in all types of fuel. Some places will force it out but here we will see all types used.
But it is all subject to change as we have new technologies and more investment in new technologies.
Look back 30 years ago and who would have thought we would be were we are at today.
Playing devil’s advocate here, CA wants to ban new ICE sales in 2040, that’s 22 years away…By then there could be self driving robo taxis everywhere…It really just comes down to cost and culture…Today if the average Joe won a limo company contest where they can get a limo anytime and go anywhere, just pay one penny a mile, most people would never buy a car again…
Thanks for adding some logical common sense Scott. Sedans just don’t sell well enough anymore to just let them languish on the car lots all summer long. Those plants still building them can expect longer holiday shutdowns this fall and winter while the floats are high, and they should hold on to their income for possibly more plant idlings as they could be next…
I 100% agree and was planning on writing something about the MPG myth myself…Also let’s not forget how many took advantage of “cash for clunkers”…
i think you have this wrong about Asian brands cutting models (sedans) – proof of this is the Toyota investing money in the new Avalon which is in the segment that has the biggest decrease in sales. There is still a market for sedans, Toyota sold over 300,00 of both the Camry and Corolla last year.
Three years ago they sold 450,000 Camrys . So their sales are down 33%.
true – but 300,000 is still a lot of cars. Camry sales in 2017 were pretty much even with 2016 — 387.081 (’17) vs 388,618 (’16).
I can’t help but to think this is a remake of a bad movie I’ve seen before.
The domestic brands once before were struggling in passenger cars albeit for mostly different reasons so they decided they’d just concentrate on trucks which were the easy money. No, they didn’t cut out sedans but they did let their designs and quality flounder from neglect.
I get consumer tastes are changing but that’s my argument for keeping sedans. Because tastes will change again. Manufacturers need to be smarter in the design and marketing of sedans. You can’t just market a generic sedan like a Impala. It needs a specific appeal to beat the Swiss knife design of CUVs. For example, push performance, safety, economy or luxury.
Maybe I’m too traditional but I can’t imagine a major car manufacturer not offering a full range of automobiles. But then I’m one of the few who think Chevrolet should offer a minvan. ?
I hope for their sake we don’t enter another oil crisis! I can’t help but feel that in the long run this will come back to bite them! But at the same time, the current trends and numbers speak for themselves! So it’s understandable….I have no doubt GM will follow suit, as these Ford sedan owners are not as willing as some of you like to think in jumping ship to GM just to buy a sedan! Not to mention the fact that GM themselves is having difficulty moving their crop of sedans as we speak!
I’m not exactly certain how automakers are able to utilize sedan suspensions/platforms to build these CUV/SUV models, but I wonder if the idea is to develop each platform as a sedan first, but build them as CUV/SUV models. And if the market shifts, they could easily use these platforms to bring sedans back.
The days of people buying Excursions are over; CR-Vs are based on the Civic and the EX-T even with AWD gets 27 city/33 highway/29 combined mpg rating…Cash for Clunkers also had a huge impact…
The market will most likely not shift again, whether its five or fifty years away, robo-taxis are coming…
It is much different this time.
#1 They are not letting their cars flounder. They will still be selling modern up to date cars in global markets that still support them in large numbers. If needed they could be entered back in to any market in short order. The global platforms have changed the old dynamic.
#2 Trucks and CUV models are not all 14 MPG anymore. With the new technologies and the varied sizes there is just as wide of range in MPG as any of the cars less the Spark that few buy anyways,
Times have changed and cost have gone up so things have to be done differently. GM has tried to get creative on sedans like the 5 door Regal but so far no one cares. The Cruze hatch has made minor impact.
It comes down to this. You can invest into a sedan that sells 90K units or you can invest into a CUV that may sell 250K units and it cost the same to develop both. What one would you chose if you can only pick one.
Times have changed. No one back in 1977 thought the down sized RWD Impala would work. It did, Then we went FWD and V6 to where few RWD or V8 cars are left. Next came the FWD 4 cylinder cars that are the majority and the V8 that is rare.
Now we are to where the CUV is selling as the personal choices of people in N America and the trend is now growing overseas as the sizes get smaller on most models.
We will have cars but they will become more specialized or high end luxury only.
When you look around and GM can build a Trax and Encore on the same platform as the Sonic and sell more of them at higher prices vs. rebates to clear lots they have no choice.
People today look at vehicles more as appliances vs. lifestyle or image products. It is a way to get from place to place safe, efficient and be able to haul all your needs. For car enthusiast as most of us it is hard to fathom but it is what it is. We saw it first with the decline in performance models. At least the standard models have as much or more HP than past performance models. But for the fan of the car it will be lean pickings.
As for the Mini Van it is dying too. People like to sit up and most want AWD as an option. Dodge is about the only one that still has much sales and it is on the decline.
I still have a sedan and will keep it as long as it runs but my wife is on to CUV models and not looking back. It fits her needs best and it is comfortable, drives well and it is safe meeting all her needs. I have to admit I was ok with it at first but have really come to enjoy it as it drives much more like a touring sedan vs. CUV. MPG is great too. As good as my sedan.
It should be an opportunity. There are a few (sadly very few) of us Americans that refuse to buy a foreign made car when the domestic rival is just as good, if not better.
Not just Americans, there are some people who like American cars and don’t like Asian and European cars in the world. But GM has done some wrong things in there global plain.
I just can’t imagine a scenario where all American cars are gone and entire car segment is handed over to foreign automakers. It just can’t comprehend it. GM should definitely take advantage of this. It would mean a lot to a lot of people to be able to buy the only American brand on the American market. Mustang and Challenger aren’t going anywhere, but the rest of Fords and Fiats car line up will be gone within 2 years.
Will Ford still make the Taurus for the police departments?
This is huge , the cost of Ford creating next gen models for their cars in the U.S isn’t worth the investment . But they will still have cars in other countries they can ship here if something changes . There are even rumors that their Continental may cease to exist soon .
For GM I think their best move would be to get rid of over-lapping cars , Buick is heavily into crossovers so let the LaCrosse go and wait to see if the Regal and it’s siblings sell . Cadillac should keep their cars , CT6 and the two newbies and let XTS go even though it’s their best selling car it’s riding on an old platform and there are things Cadillac can to to CT6 to reach out to their base .
Chevy has their trucks but still need to keep small cars so as not to let the Japanese cannabilize the market . The Malibu and Impala are so close in size that both should exit and build a new Impala on the CT6 platform .
What is a bit concerning though ( this morning ) is that Saudi Arabia has come out saying they want to see oil go back up to $80.00 a barrel especially if the U.S pulls out of the Iran deal .
We have enjoyed low oil prices for sometime now , the cheapest in the world , but if the Saudi’s get mad at us they hold the key to oil prices and OPEC would love to start making money again , and even the Russian’s would want to follow suit . They would love to stick it to us after all the recent sanctions we have laid on them .
If oil hits $80 a barrel we will see increased production of shale oil. 50% of imported oil comes from Canada. And we could always buy Oil from Russia. We need to end the sanctions and thank the Russian people for keeping the Hildabeast out of the White House.
I think the next generation Malibu should be a little larger and a lot nicer.
Then the Impala should be discontinued.
Ford’s decision is not immediate and will not be permanent as they plan to let existing car die off until their electrified version is ready which means there may be a 3-4 year gap where the Ford Mustang is the only car that the company will build; General Motors response can try to introduce a less expensive version of the Chevrolet Cruze hatchback to gobble up some of the Ford’s Fiesta and Focus business.
It appears that Trucks, SUV’s and Sports Cars are more of the highlight in news as well as that for those who want and can afford to have such a vehicle in either category these days, Family and Top End Luxury Sedans still favor consumers as well, but with the right package options. I’ve transitioned from a car to a Pick Up Truck back in January of 2007 and I don’t see myself reversing that clock anytime soon!
Will be more an opportunity for the Asian and European Manufacturers to benefit.