Ford cancels Focus Active import plans due to China tariffs
08-31-18, 01:48 PM
#1
Ford cancels Focus Active import plans due to China tariffs
The Mustang will be the only non-truck Ford sold in America
Back in April, when the new generation Ford Focus was introduced for global markets, Ford announced that the redesigned hatchback would only make it to the United States as the Focus Active crossover version. Now, those plans appear to have been scrapped thanks to 25 percent import tariffs on Chinese-built goods.
Originally, Focus Active sales would have begun in the second half of next year. For Ford, the vehicle would have been largely a niche seller, with less than 50,000 sales projected annually. But as the Focus would have been imported from China, the tariffs would have eaten into Ford's profits too much – so the automaker refocused, for the lack of a better term.
As Automotive News quotes Ford's North American president, Kumar Galhotra: "Our viewpoint is that, given the tariffs, our costs would be substantially higher. Our resources could be better deployed at this stage." And even if the tariffs were dropped, the decision will not be changed; Ford also didn't seek for a tariff exemption for the Focus Active, citing the vehicle's production timing. The Indian-built Ecosport compact crossover and the Spanish-built Transit Connect continue to be sold as previously.
The change of plans makes the Mustang the only passenger car Ford will sell in the United States: by 2020, 90 percent of new Ford vehicles sold in the United States are to be trucks, SUVs and commercial vehicles. Behind the portfolio restructuring is an attempt to improve profitability, and consumer demand in the U.S. is said to have shifted away from sedans.
Originally, Focus Active sales would have begun in the second half of next year. For Ford, the vehicle would have been largely a niche seller, with less than 50,000 sales projected annually. But as the Focus would have been imported from China, the tariffs would have eaten into Ford's profits too much – so the automaker refocused, for the lack of a better term.
As Automotive News quotes Ford's North American president, Kumar Galhotra: "Our viewpoint is that, given the tariffs, our costs would be substantially higher. Our resources could be better deployed at this stage." And even if the tariffs were dropped, the decision will not be changed; Ford also didn't seek for a tariff exemption for the Focus Active, citing the vehicle's production timing. The Indian-built Ecosport compact crossover and the Spanish-built Transit Connect continue to be sold as previously.
The change of plans makes the Mustang the only passenger car Ford will sell in the United States: by 2020, 90 percent of new Ford vehicles sold in the United States are to be trucks, SUVs and commercial vehicles. Behind the portfolio restructuring is an attempt to improve profitability, and consumer demand in the U.S. is said to have shifted away from sedans.
08-31-18, 02:19 PM
#2
Lexus Fanatic
Back in April, when the new generation Ford Focus was introduced for global markets, Ford announced that the redesigned hatchback would only make it to the United States as the Focus Active crossover version. Now, those plans appear to have been scrapped thanks to 25 percent import tariffs on Chinese-built goods.
08-31-18, 03:24 PM
#3
Lexus Fanatic
That's a bull-**** answer (not you, Hoovey, but from Ford). Ford needs to do what they should have done in the first place....bring the jobs and manufacture of the Focus back here to the U.S., and then they could afford to sell it, and not be concerned with the tariff.
08-31-18, 03:40 PM
#4
Lexus Fanatic
. Now, of course, if there is little or no demand for the vehicle, then, yes, cancelling it would make sense....but the Focus, by sedan standards, has been a decent seller, though, of course, not in F-150 or Explorer numbers.
08-31-18, 05:56 PM
#5
Lexus Fanatic
Ford will never be moving production of this model to the US or Canada. Just too expensive to make. IMO. it is a mistake to have these tariffs on the cars entering the US and prices will increase. I wonder if Canada will get this vehicle. Now, I do believe buying cars from China especially from a US manufacturer is a mistake.
Last edited by Toys4RJill; 08-31-18 at 06:00 PM.
08-31-18, 09:15 PM
#7
Lexus Test Driver
Gooooood. Don't want to see another nerdy automobile that's in need of an androgyny.
Ford needs to build competitive sedans. Oh wait... they already do. Re-do the competent Fusion and avoid all this dumb drama. Honda and Toyota have no problem peddling small and large sedans and having a full line of vehicles for all needs. This ongoing Ford story is ridiculous. The strong make appealing cars. The weak make excuses, like we are seeing here.
Ford needs to build competitive sedans. Oh wait... they already do. Re-do the competent Fusion and avoid all this dumb drama. Honda and Toyota have no problem peddling small and large sedans and having a full line of vehicles for all needs. This ongoing Ford story is ridiculous. The strong make appealing cars. The weak make excuses, like we are seeing here.
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08-31-18, 09:22 PM
#8
And yet Honda, Toyota, Subaru, Hyundai, and Kia manufacture cars here that they can afford to sell. Ford would have to restructure some contracts and their management, but it is possible to profitably manufacture cars here in the US.
09-01-18, 06:10 AM
#10
Lexus Test Driver
I predict this will be a turning point for Ford of no return.
Its only hope is that they get bought out like Chrysler did.
Nissan maybe a good merger.
I still can’t understand the rationale of getting rid of Fiesta, Focus and Fusion.
That is HUGE markeshare!
Its only hope is that they get bought out like Chrysler did.
Nissan maybe a good merger.
I still can’t understand the rationale of getting rid of Fiesta, Focus and Fusion.
That is HUGE markeshare!
09-01-18, 07:53 AM
#11
Lexus Fanatic
Originally Posted by oldcajun
And yet Honda, Toyota, Subaru, Hyundai, and Kia manufacture cars here that they can afford to sell.
Absolutely correct that is BS that they can't build it here.
Last edited by mmarshall; 09-01-18 at 07:56 AM.
09-01-18, 08:36 AM
#12
Lexus Fanatic
Others do yes. But people buy their cars for higher prices. And their production lines are already solidified. Talking about Toyota and Honda mostly. Also, the competition outside the big 3 also builds a lot of product in the Southern US where there is an absence of UAW. Ford is not going to invest in small car production in the US. Not worth it.
09-01-18, 10:31 AM
#13
Aren't they world cars to? Less niche per market than in the past, so it shouldn't be too big of a deal to manufacture them. A few more stringent safety / structural / crash requirements for US market, but overall the same car as Europe, Asia / Oceania. Just don't oversaturate your dealers with sedan units you think will languish on the lot.
09-01-18, 04:47 PM
#14
Lexus Fanatic
Just because they cant build THIS car here doesn't mean they cant build "cars" here. Ford already builds a lot of cars here.
BTW Toyota, Subaru Hyundai and Kia don't have the UAW baggage Ford has here.
Ford (and other companies) manage to sell many vehicles here that ARE made here. True, the price would go up some (I'm not denying that), compared to vehicles made with the cheap labor in Asia and Latin America, but probably nowhere near what it would cost them with the tariff. That's the whole idea of the tariff in the first place...shift production back home. You talk about economic sense.....paying a 25% tariff essentially for nothing is certainly not sense in my book, especially when the tariff means that they can (now) build it cheaper here at home. The decision to cancel rather than shift production is simply stubbornness, and, IMO, does not make sense (though I'll admit that Ford's marketers don't have to answer to you, or me, or anyone else on Car Chat LOL) . Now, of course, if there is little or no demand for the vehicle, then, yes, cancelling it would make sense....but the Focus, by sedan standards, has been a decent seller, though, of course, not in F-150 or Explorer numbers.
. Now, of course, if there is little or no demand for the vehicle, then, yes, cancelling it would make sense....but the Focus, by sedan standards, has been a decent seller, though, of course, not in F-150 or Explorer numbers.Just because its cheaper to build not here now because of tariffs doesn't mean they can make it, they decided to make it planning on building it in china when there were no tariffs.
09-01-18, 05:47 PM
#15
The new Ranger is a step in the right direction but it's still the size of an early 2000's F150. A smaller pickup based on a FWD architecture such as Ford has suggested doesn't replace the old Ranger which was body on frame and smaller.
I digress though. Both the Ranger and Transit are work vehicles. The new Bronco (Ranger based) may be good... or it may not be good if it's enormous and four door only.
Crossovers and the rest of the SUV line... I accept that I'm not the target customer for those. I never will be and cannot understand why people love them so much despite thin subjective arguments in favor of them. They do not do anything particularly well while being fairly mediocre in every measurable category. And hardly anyone actually takes them off road to use the AWD or full time 4WD systems that only some of them are equipped with.
But again... I accept that my opinions do not represent that category of vehicle buyer driving the market away from vehicles which I am actually inclined to consider purchasing.
As for why Ford could not invest in building other cars in the U.S., they easily could but I suspect that they are looking at the low profit margins for most car, wagon and two door designs versus the much higher profit margins for many SUVs, midsize and fullsize trucks and those abominable crossovers. The Focus Active would have fit the bill but they're not set up to manufacture it in the USA at this time so with the tariffs they canned it since it would have eliminated any potential profits that still existed with that one.
Last edited by KahnBB6; 09-01-18 at 05:51 PM.