Ford rethinking it's future large car platform

In a not so entirely suprising move, Ford is considering nixing it's future large car platform. "We need to understand the role of those vehicles, given the change in the market mix," said Ford Product chief Derrick Kuzak. A final decision, however, has not been made and the models are still on target for production begining in 2013.

In the meantime Ford has announced that it will bring it's European Focus and Fiesta models to the U.S. in 2010, sporting the company's new Ecoboost engines which they are also considering placing the future Mustang and F Series trucks.

I just can't understand why this would happen. It would seem obvious with declining sales in truck, SUV, and large cars that it would be. But there is still a niche customer that appreciates these large vehicles, and a rabid consumer base that was excited at the potential of the Ford Interceptor concept car.

An all out axing of the large car platform just seems like a bad business idea. Scaling back on production to meet demand would make more sense. Using the more economical EcoBoost V6's also seems like a viable way to make it happen.

You can't blame automakers for thinking this way. Ford recently reported that it's sales for June were down 28%, whereas Focus sales were up a record 53% in the month of May. People just have the perception that only small cars get good gas mileage, and in turn that's what they will buy. I have a friend that recently purchased a new Honda Pilot and negotiated $9000 off sticker because it's an SUV. An SUV that gets 20+ mpg.

I for one hope that Ford explores all of it's options before making a move of this magnitude. I know that my love for large, rear wheel drive, V8 cars is not shared by everyone and is not practical for most. But I hope there is at least enough interest out there to save them in some capacity. There is something distinctly pleasing about a big American car.

What’s wrong with domestic automakers?

Over the last ten years or so it is obvious that the big three U.S. automakers have been losing a lot of ground to foreign makes. The years when Chrysler, Ford, and GM ruled the world of cars is in the distant past. Now they have been tip toeing on the edge of implosion for several years and things are only looking worse.
Why is this happening? Domestic automakers do produce the best trucks in the world. In fact, Ford has had the best selling vehicle in America for as long as I’ve been alive with the F-150. But rising gas prices are cutting into truck production. So what is the cause of the big three’s decline? The reasoning is simple. Domestic cars suck.
I know it’s hard to admit. With the exception of a few (i.e. Mustang) most American cars are boring and no fun to drive. They have a poor reputation, caused by years of being unreliable and cheaply made. Their resale value is terrible.
Just take a look at cars such as the Honda Civic and Accord. When they first came out I wasn’t too impressed with the styling. Over time, it has grown on me. But the thing that strikes me is, they aren’t afraid to take chances. Their cars are unique looking and exciting. They are fun to drive. And most importantly, they are rock solid reliable and have a ridiculous resale value.
When I started shopping around for a new vehicle, I rationalized that purchasing a slightly used vehicle was a great way to go. Everyone knows that as soon as you drive off the lot you have lost thousands of dollars in resale value. The thing that astounded me about Hondas, Toyotas, and Nissan is that they don’t lose much value at all.
Good luck purchasing a used Accord or Civic with 100,000 for less than $6,000. Amazing isn’t it? You could buy a used Ford Taurus with this kind of mileage for $2,000 or less. Is it the quality or the perception of quality?
There have been some signs of progress. New domestic cars are light years ahead of their predecessors in terms of styling, performance, and reliability. Warranties have improved, and their reputation has as well.
The real question is how long will it take people to notice? Or care?

Trading in you gas guzzler? Make sure it's worth it!

Previously I had posted a link that allows you compare vehicles side by side and gives some very useful information concerning fuel costs. I recently came across a more useful tool that actually breaks down your cost savings per month and the estimated time it would take for you to realize these savings based on your trade in. The value of your trade in is based on estimated fair market value.

The example I have here assumes that I am trading in my 2005 F-150 for a new Honda Civic LX 5 speed coupe:

2008 Honda CivicLX 2dr Coupe (1.8L 4cyl 5M) $17,325

2005 Ford F-1502dr Regular Cab XLT 2WD Flareside 6.5 ft. SB (4.6L 8cyl 4A)

My Trade-In Value (includes typical options): $12,126

Cost of Fuel-Efficient Car Minus Trade-In: $5,199.00

MPG of Fuel-Efficient Vehicle: 30

MPG of My Trade-In: 15

Number of Miles Driven per Month: 1000

Price of Gas: $3.95

Amount Saved on Gas (per month): $131.67

Number of months to break even and begin saving money on gas: 39

Seem a little unreasonable? Most people trade in their cars every three years or so, so my estimate of 39 months seems like it wouldn't be worthwhile to make this trade. However, there are many other things to take into account here.

For one, my truck isn't paid off. My current payment is $340 a month. With a down payment of $5000, my payment on the Civic would be around $220 a month. I could easily sell the truck outright and get somewhere near the estimated retail value of $17,120 considering it has several thousand dollars in upgrades that aren't accounted for in the blue book pricing.

Add the savings of $120 a month on the car payment with the $131.67 in gas savings and you're looking at a monthly cost reduction of $251.67 a month! Not to mention that I would have a vehicle that has 0 miles on it compared to 35,000. And a better resale value. The only negative to this experiment is that I would be acquire roughly $5,000 more debt, the difference between what I owe on the truck and the cost of the Civic.

Try it yourself and see what your results are!