What Is Ford Thinking?

Last week Ford Motor Company announced that is was phasing out sales of passenger automobiles in North America over the next few years. Other than the sporty Ford Mustang, the company plans to sell only SUVs, cross over vehicles and their ubiquitous pick up trucks and vans. The products that provide the largest profit margins and currently the largest sales volumes. Sales of these larger vehicles have been encouraged by the continued low gas prices.

Oddly enough they made this announcement during the week that local gas prices shot up 10 cents and after a month when they went of 30 cents…with forecasts that gas will hit $3.00 per gallon or better during the summer. Gas prices are cyclic…vehicle sales are cyclic based on gas prices. At what price point per gallon of gas will the vehicle sales trends reverse and smaller sedans become the rage again? Are Ford and Chrysler (who has already followed a similar plan) and GM (who is considering it) actually going to cede the passenger car market to the Japanese and Koreans this time?

[there’s the apparent reason we need to roll back fuel economy and air quality requirements for BIG vehicles]


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