Ford Sees Effects of Buyer Shift Preferences

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Bloomberg News - November 15, 2012

Ford Motor Co. says its record profit margins are shrinking in North America as buyers downsize from trucks to small cars.

What does this buyer shift mean for dealers?

“We continue to see consumers trading down to smaller vehicles,” Mark Fields, Ford’s president of the Americas, said yesterday at the Barclays Capital 2012 Global Automotive Conference in New York. “Less trucks, more small cars and those vehicles have smaller margins.”

The shift will reduce Ford’s North American margins to 8 percent – 10 percent over time, down from 12 percent in the third quarter, Fields said. Ford’s margins have risen as it rolled out new models such as the 2013 Escape SUV, which is commanding $4,200 more per vehicle than the old model, Fields said. The redesigned 2013 Fusion is selling on average for $3,700 more than the 2012 model, he said.

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