Posted by Dale Buss on November 20, 2009 11:13 AM
Ford knows, and does, small cars. Remember the original teensy Fiesta that created a mini-sensation in the U.S. market in the Seventies? And Ford’s latest Fiesta subcompact is currently the No.2-selling vehicle in Europe.
So the company is better situated than it might seem for what Ford’s top US sales analyst, George Pipas, sees as an irreversible trend toward smaller vehicles by American consumers. Even after a decade in which Ford generated record profits by selling high-margin SUVs such as the Ford Expedition and F-150 pickup trucks, Pipas says Ford has bet its future on small cars and “crossover” SUVs that are built on car platforms rather than truck bases, such as the Ford Edge utility vehicle and Fusion compact sedan.
“I predicted at an investor’s conference back in 2003 that the best days of traditional truck-based SUVs were behind us, and that smaller, lighter, car-like utility vehicles would emerge and eventually overtake the truck-based products,” Pipas told brandchannel. “I was partly right – but it happened much sooner than I’d thought.”
The trend toward smaller, less expensive and more fuel-efficient vehicles was accelerated by the $4-a-gallon gasoline peak in the summer of 2008, then turbocharged by the protracted recession that has simply left many American consumers without the budget to purchase larger vehicles.
Compounding the trend, Pipas said, the newest wave of Millennials are naturally inclined toward smaller vehicles, while many in their parents’ Boomer generation are downsizing.
So while Ford has only about a 7% share of the U.S. small-car market right now, compared with Toyota’s 25%, it is counting on taking bigger chunks beginning over the next few months as it introduces the new Fiesta to Americans, as well as a new-generation Focus.