A few years ago, Ford made the bold decision to stop producing most of its sedans. This came as a shock to many, as Ford sedans were some of the most popular on the road year after year. However, Ford made the decision based on numerous factors, from changing consumer demands to optimal resource allocation.
So, why did Ford decide to stop making cars? Below, we’ll detail the reasoning behind this decision and what you can expect from Ford in the future.
The End of an Era
Ford’s decision to stop making most of its passenger cars in North America was a big change within the automotive industry. Announced in 2018, this marked the end of well-known sedans such as the Fusion, Fiesta, and Taurus, leaving the Mustang as the sole traditional car in Ford’s lineup. By 2022, Ford had phased out nearly all car production in the U.S., focusing instead on best-selling models such as the F-Series trucks and Explorer SUVs.
Market Dynamics and Consumer Preferences
One of the biggest reasons that Ford shifted away from traditional sedans was simply that consumer behavior had changed. In the prior two decades, SUVs and crossovers gained a significant amount of popularity due to their versatility, safety, and value. As the demand for SUVs climbed, the demand for sedans naturally fell.
At the same time, gas prices were fluctuating. Buyers wanted vehicles that were not only practical but also fuel-efficient. Since many SUVs had similar efficiency ratings to sedans while also providing more cargo space and all-wheel drive options, this also pushed demand further toward SUVs.
Ford didn’t make this strategic adjustment in a bubble, though. Its major competitors, such as GM and Stellantis, also reduced their sedan production. Ultimately, as sedan sales declined, they became less viable for Ford, which led to the discontinuation in favor of more in-demand models.
Financial Influences and Strategic Realignment
While consumers were starting to prefer SUVs, there were other factors that led to Ford’s decision. A key factor was that sedans typically offer lower profit margins compared to SUVs and trucks. So, while demand for sedans was dropping, Ford was also making less of a profit on the sedans it was still selling. Manufacturing sedans requires a substantial investment in production lines, research, and compliance with strict emissions regulations. At the end of the day, Ford determined that these resources would be better spent on higher-margin vehicles.
EVs and Technological Advancements
Ford’s strategic realignment resulted in Ford’s global restructuring plan, called Ford+, which aimed to cut costs and improve efficiency. Discontinuing sedans allowed Ford to free up resources for electric vehicle (EV) development and hybrid technologies. Investing in these areas was key, as investors wanted to improve profitability and compete in this new market with players such as Tesla. By phasing out their traditional models, Ford could streamline its product lineup, reduce complexity in its manufacturing, and focus on areas with the most growth potential.
Today, Ford has committed billions to EV production with the goal of achieving carbon neutrality by 2050. The Mustang Mach-E and F-150 Lightning are just the beginning of Ford’s electrification push, with future models expected to expand its EV lineup. Ford is also investing heavily in hybrid technology to provide a bridge between traditional gasoline-powered vehicles and full EVs.
In addition to spending more resources on electrification, Ford is constantly looking for ways to enhance vehicle connectivity and autonomous driving capabilities. The BlueCruise hands-free driving system is a signature Ford innovation and is being implemented in new models all the time. All of these various technologies are more easily implemented into larger vehicles, such as SUVs and trucks, making them preferable for manufacturers over sedans.
Technological advancements partially influenced Ford’s decision to move away from traditional sedans. Consumers are increasingly interested in EVs and enhanced driving experiences, while government regulations are pushing automakers to invest in cleaner technology. By focusing on larger, more adaptable vehicle platforms, Ford is positioning itself to lead in the upcoming years.
How Ford’s Decision Impacts the Broader Automotive Market
Ford’s decision to stop producing most of its sedans had a large impact on the entire automotive market. As a result, other major manufacturers made significant changes to their own strategies. For example, GM followed a similar plan, discontinuing some of its sedan and deciding to focus more on its SUV offerings. Some overseas companies, like Toyota and Honda, went the other direction, and doubled down on their sedan offerings, hoping to capitalize on the market abandoned by Ford.
Dealerships and suppliers also felt the impact of Ford’s decision. Dealerships that relied on Ford’s car lineup had to adjust their sales strategies, while suppliers had to adapt to a decrease in demand for sedan-specific components. In addition, the used car market saw an increased demand for Ford sedans, such as the Fusion or Taurus, which became more desirable as no new models were forthcoming.
Navigating the Road Ahead
The automotive industry is always changing. While SUVs and trucks are more popular today, smaller sedans may become more popular once again. However, until that time comes, we can expect Ford to continue focusing on its larger vehicle offerings instead of its sedans.
That being said, Ford’s commitment to adaptability and sustainability should prove beneficial for years to come. By focusing on the latest innovations and investing in electric vehicles, Ford is positioning themselves to remain a dominant force, regardless of the surrounding automotive market changes. Models such as the Mustang Mach-E and the F-150 Lightning are great examples, as they showcase Ford’s ability to reach a wide audience with the latest technologies.
Explore the Latest Ford Models at Jim Burke Ford
While Ford may have stopped making most of its cars, it still has plenty of new options to explore. Whether you’re interested in a truck such as the Ford F-150, an SUV such as the Ford Explorer, or the modern Ford Mustang Mach-E sedan, Jim Burke Ford has you covered. Contact us today to schedule a visit or stop by at your earliest convenience. Once you’re here, one of our team members would be happy to answer any questions and set you up with a test-drive.
