The Opposite of That Which Was Intended

The Taurus will soon go the way of the Studebaker
and the Packard (Motortrend photo)

Its decision is no surprise if you've been following the car business: Ford to stop making all passenger cars except the Mustang.

Faced with plunging demand and declining profits from its passenger car lineup, Ford will shift its resources to the booming side of the market: pickups, SUVs and crossover-utility vehicles, said CEO Jim Hackett late on Wednesday.

...the real surge is on the utility vehicle side where traditional, truck-based sport utility vehicles and newer crossover-utility vehicles like the popular Ford Escape now account for half of the overall American new vehicle market. Add pickups, vans and other light trucks and that jumps to 65 percent, with sedans and coupes continuing to lose momentum.

Americans want SUV's, "cross-overs", and trucks, not sedans.

The factor behind this market shift is fuel availability, driven by the explosion in fracking. Gas being under $4 a gallon, Americans select big, fast, comfortable, and powerful transportation. Drivers may emit concern about carbon footprints and climate change, but their purchasing choices speaks a lot louder than words. As some bloggers are fond of asking, have you hugged a fracker today?

Note: WSJ auto columnist Dan Niel says that Ford's decision has been given a push by a change to fuel-efficiency measurements.

The “footprint rule”—which refers to the area within the perimeter of the four wheels—calculates a vehicle’s fuel economy as a function of its size. The rule change effectively incentivizes building larger vehicles by holding them to progressively easier standards. As a result, the largest and most profitable vehicles also enjoy the lowest relative costs of compliance.

Car manufacturers that only make large cars and trucks have a much lower--and easier---MPG target than those who sell a lot of sub-compacts. The result: more large vehicles on the road. As is often the case, rules that are not carefully thought through result in the opposite of that which was intended.