U.S. Market Shift Structural, Not Cyclical, Ford Exec Says
September 03, 2008
By Michelle Krebs
MAASTRICHT, THE NETHERLANDS -- The recent and rapid downshifting of U.S. consumers from large pickup trucks and SUVs to smaller, more fuel-efficient vehicles is not a cyclical but a structural change, says Derrick Kuzak, Ford's group vice preident of Global Product Development.
Kuzak, speaking to media in Europe at a drive of Ford's small cars, including the all-new Fiesta, disagrees with some contrarian analysts who believe Americans, as gas prices drop, will return to buying big fuel guzzlers. Instead, he sees Americans' sensitivity to the environment and concerns for energy security combined with stricter government regulations on emissions and fuel economy driving a permanent shift toward fuel efficiency.
Kuzak say the shift has been so dramatic that F-150 buyers are downsizing to the Focus, the smallest vehicle Ford makes, skipping past midsize vehicles in between.
"No one can make the call," said Kuzak on the direction of gas prices and the vehicles Americans want to buy. That requires auto manufacturers to have a wide array of models from around the globe that they can sell and their manufacturing plants be as flexible as possibe to be able to produce more of popular models and less of unpopular ones while maintaining good factory capacity utlitzation rates.
"We have to plan for the worst-case scenario and the best case in our plants --- for two shifts on straight time to three shifts on overtime," he said.
The Ford Fiesta, being introduced in Europe now, followed by introduction in other markets and coming to the U.S. in 2010, illustrates Ford's strategy for addressing the challenge. The next-generation Ford Focus, a global small car for 2010 as well, is another.
Photos by Ford
1 - Derrick Kuzak heads Ford's Global Product Development.
2 - The Ford Verve concept, displayed at global auto shows, was the precursor to the Ford Fiesta.
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Posted by Michelle Krebs at 12:50 PM under Business , Ford , Technology | Comments (0) | digg this | Seed Newsvine
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