Ford Comfident They Can Sell Small Cars Profitably

Over the next two years Ford will be bringing out a new lineup of smaller cars including the Fiesta and the Focus.

In the past, small cars have not been profitable because consumers expected prices in proportion to car size, (i.e. small car, small price). With the changing times, customers are trading from trucks and SUV's to cars and especially smaller cars.

Consumers have become used to having lots of options in their larger vehicles and are maintaining these options when they switch to small cars. It is the additional profitability from selling the options that enable car companies to sell small cars profitably –everybody wins!

According to Ford marketing VP, Jim Farley, the average sales price of the Ford Focus rose from $14,000 in 2007 to $16,000 in 2008 because of the added features. In addition, both cars, the Ford Fiesta and the Focus, will be identical, producing economies of scale and profitability.

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