Announcing plans of a new profit-driven strategy for their European models, Ford will streamline their core range, up their status in the competitive high profit vehicle sectors and plan to launch more SUVs.
Image credit: Ford
In their announcement, the automobile giant revealed it plans to streamline their core range to “eliminate less profitable vehicles over time”, and refocus a strategy to “add new vehicles and derivatives in segments with the highest growth and profit potential, such as crossovers and SUVs”. This new focus on SUVs will begin with their new Ford Edge launching in the UK later this spring. The streamlining will most likely see models in declining sectors, such as the B-MAX and C-MAX MPVs, abandoned or rebooted in to more SUV-like designs, echoing Vauxhall’s recent decision to replace the Meriva and Zafira people carriers with SUV-style vehicles.
Following the excitement generated by the Ford GT supercar, already considered one of the most in-demand cars of the year, Ford are expected to expand its ST line-up to include amped up versions of SUVs and larger models. Of these models to get a designer upgrade, excitement is building around the potential for the Mondeo to receive a ST model for the first time in over a decade.
The announcement follows the news that Ford returned to profit in the European market for the first time in years in 2015. It was revealed that they made a profit of 259 million (in US dollars), compared to the 598 million dollar loss experienced in 2014. Ford want to keep this positive momentum and hope the new range of models will raise profit margins to between 6 and 8 percent this year. These profits have come at a cost, though. Many plants have already been closed around Europe but the streamlining plans threaten to see many more job losses throughout, though UK operations are predicted to be safe from the cuts.
Ford’s Executive Vice President Jim Farley insists the cutbacks are a positive step for Ford, saying “We are creating a far more lean and efficient business that can deliver healthy returns and earn future investment.” The savings, hoped to total the equivalent of 200 million dollars a year, will go in solidifying Ford’s tech plans, such as the FordPass we have previously written about, and improving FordHub technology centres. There will also be a focus on improving the customer service experience to build up customer loyalty.