Ford plan will use premium small cars to boost margins

Posted Wed Aug 13 2008 1:47 PM by Ralph Hanson

While the American auto market shifts towards smaller vehicles, manufacturers are struggling to make large profit margins on their compact cars, which traditionally have been supplementary to truck and large car business. Ford has a plan to increase profit margins on small cars, however, by offering a wider range of premium features and charging a suitably premium price.

The president of Ford's Americas division, Mark Fields, will be making a keynote address at the Center for Automotive Research where he is expected to reveal how Ford plans to boost the margins on its small car sales, according to The Detroit News.

The most likely path to this goal will be offering compacts with "exciting designs, best-in-class fuel-economy, excellent craftsmanship and innovative new infotainment technologies," according to Fields. All of these innovations will help turn around the perception of small cars as cheap cars, and instead show American consumers that small cars can have premium feel and quality.

For the time being, Ford isn't the only manufacturer struggling to make profit margins on small cars. Traditionally, GM, Ford and Chrysler have used large cars and trucks as a crutch to supplement poor margins on small cars, a situation which will have to be remedied for the companies to succeed in the long term.

Reader Comments

Wed Aug 13 2008 1:51 PM
Dane says

Like maybe a Ford Fiesta ST..... 22K.... 6spd/2.0 - 185bhp????? Leather/cloth seats....

I like it....

btw..... I think big cars look cheaper then smaller.... example.... Nissan Ultama.... Junk.....JUNK!!!!!
Wed Aug 13 2008 2:45 PM
Laz says

I'm not feeling the Fiesta because I've never seen one in person in the US. But I can get around the appearance for 185hp's!
Wed Aug 13 2008 6:20 PM
Dane says

Hey Laz -

I haven't seen the new one but the 2009 in Europe (old one) size is perfect.... I have not felt this way bout' a Ford since the intro to the 1999 Ford Focus and to date myself the 1983 Euro Escort.... All 'ground-breaking' cars for the times.... The Focus was so different at the time that they had to introduce it 6 months ahead of time...
Wed Aug 13 2008 7:05 PM
chris says

i swear to god.. with all this talk that ford is doing of high quality small cars, i may just drive an F450 super diesel through the dearborn headquarters if they reneg.

If i can spend 25 grand on a fiesta and 30 grand on a focus in 2011.. you'll see one happy little canuck.. thats for damned sure. 6 speeds all around, 1.6 and 2L turbos, AWD on the focus, leather and (crosses fingers) maybe even suede interiors, as in like.. ON THE DASH... DOOR PANELS... cmon ford.... high quality buttons and nobs would be nice too...

MotorAuthority