No. of Recommendations: 3
...according to Ford Motor, which made itself with affordable cars.
Ford CEO Says Your Focus Was ‘Boring’: Why The Brand Is Done With Affordable Cars
At its core, this strategy can be summarized as a strategy of sharpening focus and prioritizing profitability. By decisively eliminating low-profit “boring” cars, Ford aims to concentrate resources on “iconic” vehicles and EVs and commercial models. Models like the F-150 pickup, Explorer SUV, and Mustang sports car represent Ford’s strong brand image, allowing for higher margins. By doubling down on these models, Farley is betting on enhancing the brand’s appeal and exclusivity while simultaneously improving the company’s financial health.
Ford aims to exit low-margin segments entirely and reposition itself as a higher-value, higher-revenue brand by leveraging its own “iconic” nameplates such as the Mustang, Bronco, and Capri.
Profitability vs. Market Share Farley’s strategy entails accepting the risk of declining market share in the short term. The discontinuation of models like the Focus and Fiesta, which attracted young consumers and first-time car buyers with their affordable prices, has reduced the inflow of new customers, leading to a drop in market share. In fact, Ford has already experienced a 17% decline in sales in the European market for 2024 compared to the previous year.
Ford’s top priority is maximizing profitability rather than recovering market share. The strategy of focusing on commercial vehicles (Ford Pro) and high-profit iconic models aims to secure financial health, even if it entails the risk of weakening short-term market dominance. https://autopostglobal.com/latest-scoops/photo-rep...As offered before: the business model being pushed today, at many companies, not just Ford, is price and margin escalation, with not a care for volume and market share. As volume shrinks, factories will be closed, and people laid off, to "right size" the company, while keeping the CEO bonuses flowing.
Steve
