Ford plan will use premium small cars to boost margins

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.