Amid Trump's Growing Trade War, Ford Cancels the Focus Active SUV for the U.S. Market
【Summary】President Trump’s escalating trade war with China has hit the automotive industry once again. The Ford Motor Company has cancelled plans to import the Focus Active, a new compact crossover it hoped to import to the U.S. market next year.
President Trump's escalating trade war with China has hit the automotive industry once again. The Ford Motor Company has cancelled plans to import the Focus Active, a new compact crossover it hoped to import to the U.S. market next year.
The Detroit automaker planned to offer the compact SUV built in China to U.S. customers in 2019. However, Ford changed its plans for the vehicle. The small crossover would be subjected to a 25 percent tariff if shipped to the U.S. which factored into Ford's decision.
"Building the Focus Active at the Michigan plant didn't make sense because Ford anticipates selling less than 50,000 of the model here", said Kumar Galhotra, president of Ford North America, during a Detroit press conference on Friday.
"Basically, this boils down to how we deploy our resources," Galhotra said. "Any program that we're working on requires resources — engineering resources, capital resources. Our resources could be better deployed at this stage."
U.S. sales of small SUVs and crossovers are rapidly growing—significantly overtaking sedans. According sales data gathered in March 2018 by Motor Intelligence, sales of sedans in the U.S. have dropped 64 percent over the same period last year. In contrast, YTD sales of smaller SUV are up 28 percent. In the same period, sales of crossovers are up 18 percent from the previous year.
Ford already has plans to phase out sedans in favor of smaller crossovers models, larger SUVs and trucks. The only car that will remain in Ford's U.S. lineup is the iconic Ford Mustang. Ford stopped production of the sedan version of the Focus in May, although the car is still available in other markets including Europe.
Ford is not the only U.S. automaker looking to avoid the steep import tariff. Last month, General Motors asked the federal government to exclude its mid-size Buick Envision SUV from the tariff. The Envision is also built in China by SAIC GM, a joint venture between General Motors and China's SAIC Motor established in 1997.
Like Ford, GM said that the Envision's relatively low U.S. sales volume does not justify moving production to the U.S. GM sold about 41,000 Envisions in the U.S. last year and over 200,000 in China.
Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.
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