In a turning tide of events witnessed across the automotive sector, the Ford Motor Company has sketched a plan for cutting operational costs & augmenting its revenue by halting the sale of sedans in North America. The move has come on the heels of the fact that traditional sedans are now growing increasingly infamous among customers. Ford declared that it would now reduce USD 25.5 billion in operating costs by 2022.
Jim Hackett, Chief Executive of the Ford Motor Company, has stated that the firm is refocusing on its business operations strategy and is likely to discontinue with the ones that are unprofitable. The firm projects pretax profit margin of nearly 8% across the globe and 10% in the region of North America by 2020.
With the shift in the consumer trends witnessed across the vehicle industry, Ford is likely to include just two car models in its vehicle portfolio in North America. It includes Mustang, a fifty-year-old sports car model of Ford, and Focus Active, a new active crossover car model of the firm that is likely to be launched next year. The key officials of the firm have stated that the company will not be providing funds for the next-gen old Ford sedans in the North American region.
Analysts have predicted that the decision to stop the sedan sales was based on the investor pressure to augment Ford’s product lineup and enhance its profits. For the record, last year, Ford’s pretax profits dipped to USD 8.4 billion from USD 10.3 billion. In the last month of this year, the executives of the automotive giant had unleashed the firm’s plans to change its car portfolio from an increase in the production of passenger cars to SUVs.
Incidentally, Ford has also decided to increase hybrid & pure electric car production and minimize the development & production costs for increasing its revenues as well as its market share price.