Among the 20 best-selling cars in the United States, one stands out in terms of a loss of sales though the first five months of the year — Ford Motor Co.’s (NYSE: F) Focus, the sales of which have plunged 15.2% during that period to 94,690. The news is particularly bad for America’s number one car company, since the Focus is its fourth best-selling vehicle.
The Focus problem may be due to its presence in one of the most crowded segments of the car market. It is relatively low priced (as low as $16,810), gets good gas mileage (36 mpg on the highway for its base model) and has an electric version (which gets as much as 99 mpg). That makes it nothing more than a commonplace car in a commonplace part of the industry.
Ford claims that the Focus competes with the Mazda CX-5. The base of competitors is actually much larger than that. Virtually every large car company has a direct rival to the Focus. High on the list among these are Toyota Motor Corp.’s (NYSE: TM) Corolla and Honda Motor Co. Ltd.’s (NYSE: HMC) Civic. Corolla sales through the first five months of the year are higher by 8.2% to 143,409. Sales of the Civic are up by 4.5% to 134,796.
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Ford, like all large manufacturers, suffers from the fact that, as it picks and supports it model line, it has to be all things to all customers. Almost certainly it will stumble in some parts of the market, if only because of rate at which its competitors release new models and, in many cases, offer discounts. As is the case with the Focus, managing the lineup can be ugly business. Profitability of the entire company comes down to the batting average for model selection.
Ford and other manufacturers that want to dominate the market for inexpensive, high-mileage cars face another, perhaps impossible to clear hurdle. Younger Americans drive less and less. This may be the greatest challenge the industry faces, as the generation of heavy drivers pass into their fifties and sixties. To a large extent, cars like the Focus target these younger drivers. That by itself may undermine the Focus’s future.
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