Mulally remains committed to Ford small car strategy despite low gas prices
Even though gasoline prices are down to almost $2 per gallon around here as election day approaches, Ford CEO Alan Mulally apparently doesn't think the current situation will last. Mulally told Automotive News that the Dearborn automaker is staying the course on its plan to introduce a half dozen new smaller vehicles in the U.S. market in the next couple of years. The respite in fuel prices may give Ford some breathing space on the launch of its new F-150 pickup truck. Last week the company announced it would bring back 1,000 workers at its Dearborn truck plant. However, the company has not changed plans to close and/or retool several truck plants over the next 18 months to build smaller cars.
Mulally also told the interviewer that the company is still considering bringing the Ka to the U.S. market and will be watching demand for smaller cars. The challenge for Ford and other automakers is offering small cars like the Ka and Fiesta at a profitable price point. That's even more of an issue with the current economic conditions. Prior to the recent financial collapse, it was hoped that they could offer small cars with the levels of equipment offered in bigger cars and thus command a high enough price to make money. That may prove to be more difficult now as Mulally acknowledged that we could see U.S. car sales dip to as low as 11-12 million annually next year compared to a high a few years ago of 17 million. You can check out video of the AN chat with Mulally here.
[Source: Automotive News - sub. req'd]
Reader Comments (Page 1 of 1)
H 1:59PM (11/03/2008)
You know... a bailout package that would cost the taxpayers nothing can be done with a stroke of a pen.
For every vehicle sales loss 2007-2008 of a vehicle over 6000 lbs GVW, allow a manufacturer to sell in the US, in 2009, a vehicle that meets Euro NCAP 3 stars, and has a combined MPG on the Euro cycle of 40mpg (US).
The EPA and NHSTA restrictions would be waived until 2011.
While a Ka might not crash like a Saab into a brick wall, it would do better than many small trucks (particularly in rollover). Also, while the emissions per hp-hr might be higher in some cases for the small car, the overall emissions of a 1.6 Liter gas or diesel would have to be less than those of a 5.7 or 6 liter truck.
Chrysler could sell rebadged Peugeots for all I care, up until the displaced Durango/Ram/Dakota sales are accounted for.
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D. See 2:11PM (11/03/2008)
Bravo Alan! Stick to your vision. The U.S. needs more choices in small, stylish, fuel-efficient and fun automobiles.
Bring the Fiesta & Ka. They will move! (look no further than the current Focus that's being peddled here).
Also, a small displacement diesel engine choice too, please.
Thank you!
Sincerely,
America
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Hank 2:27PM (11/03/2008)
"Mulally remains committed to Ford small car strategy despite low gas prices"
Good. Lower prices are clearly temporary. People need to start thinking long term, and not let today's prices to get them thinking bigger guzzlers are back. That would be a big mistake.
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oollyoumn 3:18PM (11/03/2008)
Most consumers can't plan past the next two paydays. I am encouraged to hear Alan plans to stay the course, but if gas stays low for more than a month, consumers will start shifting back. We can't count on consumers to do the correct thing here. Unfortunately it will take some intervention to bring lasting change.
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Warner Young 6:24PM (11/03/2008)
"Most consumers can't plan past the next two paydays."
Sadly, there are times when I'm not sure most consumers can even plan past the next two DAYs, let alone two paydays.
Even though I haven't owned a Ford in forever, I'm glad to see them staying the course. Historically, gas prices always trend up in the long term, so it seems unlikely the current prices will remain. Hopefully, enough people have been burned now that they'll really give some thought to the long term trends before buying their next car.
gorr 9:00PM (11/03/2008)
One thing im minding is that these cars need a manual transmission to drive decently and american drivers are use to automatics. Then these little lightweight cars are reacting faster to drivers inputs and react more on the boss on the roads because of the lightweight and small dimentions and american drivers are use to big cars and trucks that are slow and isolated from the roads. So maybe after a couple of sale to early buyers the trend may go to a complete stop if gas price remain at 2$/gallon regular unleaded.
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timrussell 5:17PM (11/04/2008)
Twin Clutch will solve the manual/auto problem. Ford might be the last US automaker standing soon. Consumer Reports has their cars on par with the Honda and Toyota in their consumer surveys. They reacted quickly to the shift in consumer demand and had some of the smaller cars for NA in the pipe before gas went up. GM's cash burn means they got about a year left and Chrysler might have less time than that.
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