Ford Focus Active No Longer Coming To America
Ford Motor Company (NYSE: F) will not be bringing its new Focus crossover to the United States. The company had planned to start shipping the Focus Active to the US later next year, but says that plan no longer makes financial sense. Ford is already selling the model in China and Europe.
The automaker announced that it would build the crossover in China last year, claiming that production would be $500 million cheaper. But now, President Donald Trump has imposed new tariffs on cars that are assembled in China. Because of the tariffs, which can be up to 25 percent, it’s no longer profitable for the company to sell the Focus Active in America.
The move will make little difference for Ford’s sales or profits. Ford had predicted consumers would buy close to 50,000 of the vehicles annually. The company sells 2.5 million cars a year.
Kumar Galhotra, president of the car company’s North America division, said in a conference call, “Our viewpoint on Focus Active was that, given the tariffs, obviously our costs would be substantially higher.” He continued, “Our resources could be better deployed.”
The decision could make the Mustang the only Ford passenger car sold in the US. Ford has said that by 2020, nearly 90 percent of the vehicles it sells will be SUVs, trucks or commercial vehicles.
About 80 percent of Ford cars are made in the US. The company assembles another 15 percent of the cars it sells in the US in Canada and Mexico. According to the Center for Automotive Research, 48 percent of the vehicles sold in the U.S. last year were imported.
The tariff problem could soon affect car models imported from Canada as well. Trump has threatened to hit Canada with auto tariffs if the country fails to join his new trade deal with Mexico that is intended to replace NAFTA. In addition to Ford, both Toyota Motor Corp. and General Motors Co. source some of their most popular vehicle models from Canadian plants.