Ford Made a Risky Plan to Move on from Sedans
Ford Motor Company is warming up for the launching of its brand new and somehow different version of its signature compact SUV, the Escape. Also, the latest 2020 Escape loses the outgoing model's boxy profile. It has softened lines, which makes it look less like a brawny SUV and more like a high-riding version of Ford's now-departed compact Focus.
But this new look was intentional, even the name perhaps. The latest model is an essential piece of Ford's plan to "escape" and move on from sedans in order to improve its profit margins. And the firm plans to do this without losing too much of its loyal sedan buyers. Above all, this plan is key to the investment case for Ford, but as what you think it is, it comes with a risk.
Aside from that, it's no secret that Ford is thirsty to tout the improvements it baked into the all-new Escape, and it's one solid list. Compare to the outgoing version, the new model is much roomier inside but still 200 pounds lighter. Then, the legroom in the back seat is satisfying, with a lot of cargo space, includes all of Ford's latest electronic safety aids, and it has a new hybrid version.
Another thing to be excited for is the Escape's remarkable change. Similar to the outgoing Escape, the new 2020 model shares components and engineering with Ford's compact Focus. But in this case, it will be the all-new Focus that the Blue Oval launched in Europe and China. Also, Ford did not hide the Escape's roots.
What Might Ford Lose?
Ford took out some of the visual SUV-ness out of the Escape. And it seems like it is running the risk of losing some loyal buyers who prefer a little bit of brawniness in their compact crossover SUVs. Fortunately, the company has something for them too, a baby version of Ford's upcoming truck-based off-road SUV, the Bronco, is currently in the works.
As of now, the official name of the baby Bronco remains unknown. However, the company will base it on the C2 platform and probably built at Ford's Hermosillo, Mexico factory alongside other C2-based vehicles. Moreover, this might arrive late next year of early 2021.
Profit Margins of Ford
All in all, ford is stepping out of its old Focus and Escape. And it is putting new looks for its new Escape and the Baby Bronco. Aside from that, these two vehicles can give a higher profit margin than the two, which they replaced.
However, every good plan has its disadvantages. The new Escape starts at $26,080, quite right for a compact crossover SUV. But it's much costly than the $21,415 starting price of the late Focus. Nothing to worry about though, if that's too much, there are other choices also -- the small EcoSport at $21,090, Fusion sedan for $24,165, or buy something other than Ford.
At some point, the risk is that customers will balk at Ford for increasing its prices. Fortunately, low-interest rates and longer loan terms supported Ford to sustain higher average transaction prices for several years now.
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