Ford’s Winning Streak *UPDATED

Ford Start concept

It looks like Ford tomorrow will post a $1.2 billion first-quarter profit—the first time since 2005 the company has had four consecutive profitable quarters. Ford’s U.S. deliveries were up 37 percent through March, twice that of the industry as a whole.

One analyst said, “There’s a lot of momentum at Ford right now in terms of customers’ perception of their products.” Another praised its responsiveness to market changes in developing new products.

Lately, we are seeing everything from far-out concept cars like the three-cylinder Start (above, shown at Beijing and possibly headed for production) to the 2011 Fiesta, coming to the U.S. soon.

The Mulally strategy of repairing and revitalizing the brand seems to be working. But the company, even while it is doing quite well, is at a critical juncture. It needs to pay down debt while keeping the sales ball rolling with innovative products that people want. It also needs to keep the goodwill it has gained by not accepting government bailout money. And it won’t continue to benefit forever from Toyota’s debacles.

Fiesta hatchbackA big question now is whether the Fiesta (hatchback, right) will be as big a hit as Ford hopes. Reviews have been very positive, varying from ecstatic to mildly critical, and it sounds to me like the car is a great driver and very well put together and fitted out, though somewhat underpowered.

The ball is now in the buyer’s court: Will U.S. customers finally come around to well-conceived and constructed small cars? As Europe’s best-selling car, the Fiesta still has a case to make on these shores, where buyers have long resisted such vehicles. Ford is betting that the game has changed, that the recession and environmental change (and maybe common sense?) will convert more and younger prospects.

Cars like the 2012 Focus will be part of this picture, and finally we could see the European small car take hold. The Fiesta’s price, beginning at $13,995 MSRP, is certainly right.

Do you think the small-car market is finally becoming viable in the U.S.? Has Ford judged correctly?

*UPDATE: We reported yesterday, per Bloomberg, that the company would post a $1.2 billion first-quarter profit. Instead, it posted a $2.1 billion profit. While it still has some $34.3 billion in debt, this is an amazing accomplishment.

—jgoods

Find Used Cars in Your Area at CarGurus

3 Comments

  1. Some of these small cars are actually pretty nice, but the auto makers seem to confuse small and fuel efficient with cheap. Bolting leather seats in a cheap car doesn’t make it a better car. Remember the Cadillac Cimarron? (We called it the Cadillac sue-moron.) It went a long way to help turn Cadillac into the joke it became in the 1980’s and 1990’s.

    Charging drivers to operate their big gas-hogs in congested areas might help move them to smaller cars for commuting– For instance, turn expressways into tollways with graduated fees based on the size of the vehicle and the number of passengers. That Hummer driver will think twice about driving alone during rush if it costs $20 one-way.

  2. I’m really excited for the Fiesta… and think the Start concept is a potential home run for Ford. Even if gas prices were lower, I’d be interested in a small car as an inexpensive yet capable commuter to get me around the city in style and in comfort. That said, it wouldn’t work for me as an ONLY car… but would be perfect as a second vehicle.

  3. Don’t know about Ford or any other car maker that has been pretty well mandated to get their CAFE numbers up. That means making sardine cans that can fit some people in them. I don’t know if people will buy them out of necessity should the gas prices keep heading north of $3/gallon, but if the number stays below $3/gal, I don’t think anyone would voluntarily choose to buy these sardine cans when there are many more comfortable choices to be had.

Leave a Reply

Your email address will not be published. Required fields are marked *

*
*
Website