Ford had planned on selling two cars by 2019 in the U.S. - the Mustang and Focus Active. The latter took elements of a crossover with a higher ride height, body cladding, and new bumpers, and put them onto a Focus hatchback. But plans to bring this model to the U.S. have been canned.
Ford announced today that it has canceled the Focus Active as tariffs on Chinese-made goods would eat into profits. The company announced last year that it would import the next-generation Focus from China.
"Given the negative financial impact of the new tariffs, we've decided not to import this vehicle from China. The significant thing that moved was the tariffs going up substantially higher. We're choosing to deploy resources elsewhere," said Kumar Galhotra, Ford president of North America.
Unlike General Motors which had applied for an exemption on the Chinese-built Buick Envision, Ford did not apply for one as it would have not worked out due to production timing and a small number of sales - the company projected to sell fewer than 50,000 Focus Actives in the U.S.
Kristin Dziczek, vice president of the Center for Automotive Research tells The Detroit News that this could be the first of many announcements. The combination of Chinese tariffs, along with the threat of a 25 percent tariff on imported cars and parts may push a lot of products out of the U.S.
“Many models will be withdrawn from the U.S. market, and many won’t be built in the U.S. at all. There are a whole lot of implications for the automotive industry and for consumers in terms of choice and prices,” she explained.
The decision also puts Ford in a tough spot. The Focus Active was going to be one of the models that would fill in the space left by sedans that are going to be cut.
"It didn't make sense for us to continue to invest in this program. We're looking at the entire landscape, and we're thinking through what other products we can offer customers," said Galhotra.
Source: Automotive News (Subscription Required), The Detroit News
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