Ford Bets on Small Cars to Go Big

Ford has been delaying the launch of the new F-150 pickup truck for some time now. With gas prices reaching a fever pitch lately, no amount of marketing could counter $4 per gallon gas prices. So with the fall of gas prices, the new F-150 ads have come out on TV in a push to re-create some excitement in that segment, but what about long term?

Ford is betting big on small. As in small cars. The Europeans have been reaping the benefits of driving small cars for years, and Ford feels it’s their duty to educate the American consumer on all the pluses of driving a smaller vehicle. The fall in gas prices won’t deter Ford CEO Allan Mulally with executing his strategy either.

“Fuel prices are going to stay relatively higher, even though they’re down right now,” Mulally told Automotive News last week. “The most important thing we can do is have a full complement of small and medium-sized cars and utilities that complement our larger vehicles.”

Indeed, small and medium-sized cars are going to have to make up the core of Ford’s future sales, not trucks. Right now job number one is to get the new Fiesta up and running for the American market. Next is an array of smaller Focus-type cars to fill the void left between the Fiesta and the Fusion. What’s more, Ford’s tiny Ka micro-car is also being considered.

But can a company that was built on excessive truck profits make money doing the small car thing? One thing is for certain, the days of $8,000 to $10,000 profit per truck are over. If Ford wants to survive in the automotive future, its going to have to think small, and bet on small too. From what we can see, Mr. Mulally is doing just that.

Source: AutoWeek