Ford Motor Co. is restating its future product plans in the United States, this time in response to the tariffs that President Donald Trump has imposed on Chinese imports – and the threat of more.
The Blue Oval is scrapping its plan to sell the China-built Focus Active crossover in the automaker's home market, and effectively stopped the Ford license plate in the US by the end of next year, eventually leaving just one car in the car Showrooms: the Mustang  The Ford-based vehicle, which was expected to arrive in the US by the end of 2019, would have been built in China by Ford and shipped to the United States. Recent tariffs imposed by the Trump Government on Chinese imports – and those likely to be levied on imported vehicles – have reduced the profits of a low-margin vehicle.
"Given the negative financial impact of the new tariffs, we decided not to import this vehicle from China," said Kumar Galhotra, Ford President of North America, Friday. "The key thing that moved was that fares went up a lot and we decide to use resources elsewhere."
The decision comes when the automaker urges with an aging portfolio that is unsuitable for SUV and crossover heavy wants the consumer in America and other major markets. The Ford Focus nameplate was to be the last track on Ford's current sedan line.
"Whatever Ford gets from Focus should not have helped much, which should be a crossover or an SUV," said Karl Brauer, industry analyst at Cox Automotive
It might have been difficult for Ford to deny the Americans Focus Active with enough volume to sell, according to Brauer a big profit. In its current iteration, sales of the Focus passenger car in July fell by 15.3 percent in US sales, with nearly 84,100 deliveries.
"With the temporary nature of the customs situation," he said, "they may have been looking for a pardon to not sell (the Focus Active) in the US" And the hot policy of the trade, including the question of where vehicles probably contributed to Ford's decision to cancel plans to import a China-built Focus into the United States. Ford Pushes CEO Jim Hackett to 10 Percent Profit Margins North America – 7.4 Percent in the Second Quarter – Ford leadership and executives to a "Return to 10" mantra that they use to guide decision-making for future product and business strategy.
For dealers, the loss of Focus's name tag is bittersweet.
"The nameplate has been watered down a bit in recent years, but do we hate losing it? Yes," said Sam Pack of Sam Pack's Ford Five Star in Texas.
Pack sees potential in the upcoming Ranger and Bronco revivals – including strong brands for Ford – and in the change in "silhouettes" the automaker has promised to outperform in its portfolio. But an affordable option is also crucial, which is why Pack says it supports Ford's decision on Focus Active.
"We need products at an affordable price, they are very important for many different reasons. Ford introduced the Focus Active in the price range with these tariffs, that would simply not have been affordable," said Pack. "There is a strong lineup along the way, but it has to do two things: we have to have the product that will fill the void of the cars we lose, and then we must have products that go beyond and grow ours Share. "
Crosstown rival General Motors Co. had asked the US government for a waiver of duty on its China-built Buick Envision. This request is still under consideration, said a GM spokesman. Galhotra said on Friday that Ford did not seek an exemption for the active.
"This is just the first of many such announcements," said Kristin Dziczek, vice president of the Ann Arbor-based Center for Automotive Research. She predicted that tariffs on Chinese imports, coupled with a possible 25 percent tariff for all imported cars and parts, would displace many products from the US market.
"Many models are being withdrawn from the US market and many are not being built in the US at all," she said. "There are a whole range of implications for the automotive industry and for consumers in terms of choice and pricing."
Ford is slashing $ 25.5 billion in operating costs to prepare for the uncertain future of the industry by spending $ 11 billion to restructure its global operations. By 2020, nearly 90 percent of the vehicles sold in North America will be used as trucks, SUVs or commercial vehicles.
Since taking office as CEO in May 2017, Hackett has opted for faster decision-making in the top tier of Ford. With news of other Trump tariffs swirling this week, the automaker made a decision on Thursday to squeeze China-built assets – and investors responded by asking for 2.2 percent to close at 9.48.
The Focus Active, built in Europe and China, will be sold exclusively in European and Chinese markets. The North American production of the current generation Focus ended earlier this year at Michigan Assembly Plant in Wayne, as the automaker began producing the plant for the 2019 Ranger and 2020 Bronco.
Ford intended to sell fewer than 50,000 Focus Active crossover vehicles annually in the United States. The Dearborn automaker expects the impact of dropping the vehicle from the future portfolio to be "marginal," Galhotra said.
The decision delays Ford's plans to easily switch from limousines to new crossover "silhouettes". The automaker intends to cut its passenger car lineup by more than 80 percent, eliminating the Taurus, Fiesta, Fusion, C-Max and Focus sedans within a few years.
The Focus Active should fill out the space left by them limousines. Company representatives have said many times that crossover design is more desirable to consumers than a sedan.
Galhotra declined to comment specifically on Friday on what Ford would offer consumers displaced by the lack of sedans in the cast. The automaker has emphasized that it will not turn away from entry-level vehicles to achieve greater profit margins, and will replace the sedans with similarly affordable vehicles.
In August, Hau Thai-Tang, Ford's executive vice president of product development and purchasing, said Ford's North American lineup will grow by three vehicles by 2023, despite plans to cut saloons.
Galhotra said on Friday that Ford wanted options for its US consumers: "There was no point in continuing to invest in this program, we look at the entire landscape and think about what other products we offer our customers can."  Twitter: @Ian_Thibodeau
Read or Share This Story: https://detne.ws/2PUWZjK