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Ford rethinking vehicle launch strategy

With a new boss at the helm, Ford is looking at new ways to improve its vehicle launches in North America to prevent recent issues that have popped up with models like the Lincoln MKZ, Ford Escape and Ford Fusion. Speaking with Automotive News, Ford's new president of the Americas, Joe Hinrichs, revealed a few ways the automaker plans to avoid early build issues such as the engine fires on certain 2013 Escape and Fusion models and months-long delays for customers to receive their MKZs.
It sounds like the root of the problems may have been Ford's relationship with suppliers compounded by the fact that the product surge came on the heels of the recent industry-crippling recession, and in the AN article, Hinrichs says improvements are being made to reduce problems during the launch of new or redesigned models. Three such improvements that were implemented during the first quarter of this year including more rigorous quality comparisons, better use of computer technology to catch major problems sooner and hiring engineers to work closer with suppliers.

Ford Explorer problems gutted third-quarter sales

In early September, the Detroit Free Press published a feature noting numerous problems Ford's having with the 2020 Explorer and 2020 Lincoln Aviator launches. Issues with both SUVs, built at Ford's Chicago Assembly Plant, were so rife and dire that the automaker was trucking the vehicles 275 miles away to Michigan for repairs. Bloomberg reported earlier this month that Explorer's third-quarter sales dropped 48 percent compared to the previous model in 2018, with dealers unable to get enough units on lots for customers. Nor is the snafu over: Automotive News reports that another "batch of about 2,500 Explorers in need of repairs" arrived recently in Michigan, and sales through the first nine months of 2019 are down 31 percent. Sales dips during model changeovers are to be expected as old inventory gets sold down and new production ramps up, but this is different. Ford U.S. sales boss Mark LaNeve told Bloomberg earlier this month, "We’ve got adequate inventory in our stores. For Q4, availability wonÂ’t be an issue. WeÂ’ll be able to hit our stride with Explorer starting now." It's hard to know whether that's true, with thousands of Explorers still piling into Michigan; the batch AN mentioned represents about 5 days of sales during an average month in 2018, before the drawdown and interruptions hampered matters. And when Consumer Reports tested the Ford Explorer it bought this summer, it titled the review, "2020 Ford Explorer drives nicely but has many flaws / Poor interior quality and a high price overshadow the SUV's improvements."   On top of that, the AN piece mentions a new impediment to uncorking the Explorer sales stream: Worker strife in the Chicago plant. Allegedly, "Roving groups of workers are intimidating other employees, creating a hostile environment, the people said. ThatÂ’s driving up turnover and leaving some vehicle assembly unfinished, contributing to the company having to complete the work at the Michigan factory or at dealerships, the people said." Ford's been fined twice before for the same kinds of issues at its plants, once in 1999, again in 2017, but a spokesperson said Ford isn't aware of any such problems now. The pressure otherwise has got to be unpleasant for everyone on the Explorer team, from CEO Jim Hackett down. The automaker was meant to be "turning the corner" in April, but as of now, shares are down, credit rating is down, earnings are down.

Analysts warn Lincoln shouldn't follow Ford out of the sedan market

Lincoln looks set to mimic Ford's on-going shift away from sedans. The move makes sense on the surface, but analysts warn the luxury brand needs to keep some low-riding models in its portfolio. The company's current lineup includes two sedans, the MKZ and the Continental, plus five SUVs. The sedans aren't long for this world, according to The Detroit Free Press. The publication learned Ford's Hermosillo, Mexico, factory will stop manufacturing the MKZ in late 2020 or early 2021, and it pointed out UAW documents note Continental production will continue "through its product lifecycle." In other words, it's the last model on the Continental branch of the Lincoln family tree. These two nameplates represent 23.3 percent of Lincoln's annual sales so far in 2019, which is a surprising and respectable statistic. One in four cars the company sells is a sedan. The problem is that they accounted for 27.6 percent of the firm's sales in 2018, and that number will continue to fall in 2020 as customers flock towards crossovers and SUVs. And yet, exiting the sedan market isn't the right answer for a company that wants to re-establish its reputation as a luxury automaker. Eric Noble, the president of consulting firm CarLab, told The Detroit Free Press about 40 percent of American buyers in the market for a luxury car choose a sedan. The Chinese market — where Lincoln hopes to gain a secure foothold in the coming years — also has a healthy appetite for sedans. Going SUV-only is a strategy that might work well in the United States, but it doesn't suit Lincoln's ambitions. Germany's big three luxury brands all have a flagship sedan at the top of their range. We can't argue against sales data; the sedan market is shrinking. There are ways to keep buyers in the fold, however. The Continental is a stellar effort from the brand, and a solid foundation on which to build. Noble pointed out Lincoln could use the rear-wheel drive platform found under its Aviator and Ford's latest Explorer to build a four-door model with a fastback-like roof line in the vein of the Audi A7. It's a sleeker, sexier body style that tends to attract more buyers than a more conventional three-box sedan, which is often criticized as old-fashioned. Automakers can normally get away with charging a little bit more for these cars; the A7 is more expensive than the A6, for example. Electrification could be the Lincoln sedan's saving grace.