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Why Ford Has to Bring Back the Ranger

24K views 2 replies 3 participants last post by  blank102 
#1 ·
I consider management to be the biggest factor when choosing which companies to invest in. The best products in the world will fail if the company is run by idiots. Ford (NYSE: F ) has great management, but its decision to stop selling the Ranger in North America is a mistake. Trucks bring in the majority of profits for Ford and General Motors (NYSE: GM ) , making it the most important segment to the Detroit companies. It's a segment Ford has long dominated, and killing the Ranger gives its rivals - like the Toyota (NYSE: TM ) Tacoma - a chance to grow revenues. So far management has stuck to their guns and the Ranger is only available overseas, but I strongly believe Ford will change that - maybe as soon as this year.

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Downsizing
In the U.S. market the trend is vehicle downsizing, as pointed out in a survey by J.D. Power. They recorded that 27% of consumers purchased a smaller vehicle than their previous ride. Following that logic, we could potentially see a future rebound in the midsize truck segment, which has been in decline for years. Killing the Ranger eliminates the midsize pickup truck option for Ford's loyal customers and that's costing the company money.

Efficiency
Some argued that Ford's trimming of platforms to create a leaner operating structure is why the Ranger was killed. That couldn't be further from the truth. The Ranger is sold in 180 countries and will remain a core platform down the road. It's become a hot commodity in Australia and has a chance to be Ford's No. 1 seller in the country this year. It's also gaining popularity in parts of Asia and looks to play a role as that region's sales explode.

Competition
Ford defended its move by saying loyal customers would simply step up to the F-150. That was a bad assumption - as the Ranger made its market exit the market share of the Tacoma jumped 16% in 2012.

The fact is that not everyone needs or wants an F-150. For some it's just too big to be a viable option, or too expensive. There is the crowd that uses these trucks as tools for work; those consumers will always buy the large pickup. That said, there's a large crowd of people like myself who would like to own a smaller truck for the few times I need to haul something - while still having a viable ride in the city.

Currently the Toyota Tacoma and Nissan Frontier are the only options for us, but GM confirmed that a redesigned Chevrolet Colorado will resurface later this year. When that happens, expect the Colorado to quickly take the sales lead in the segment and follow it up by sticking its tongue out at rival Ford. I then expect Ford to hastily set up a press release stating plans to bring the Ranger back to the U.S. market - maybe as soon as next year.

Bottom line
The Ranger model that is sold overseas is near the top of its compact class for towing capacity and has impressed in many different categories. With the current engine it's rated between 26-28 MPG and can still tow a payload of over 7,300 pounds. The Ranger has already been produced to comply with government standards in North America, leaving zero reason why it can't be brought back right away.

If gas prices ever go through the roof this truck could bring back sales the midsize segment hasn't seen in over a decade. If gas prices never go through the roof, I'm still convinced the Ranger - with EcoBoost engine options - would still sell very well. It wouldn't bring in quite as much profit per vehicle as the F-Series, but it's better than losing sales to competitors. As a Ford investor, I want the Ranger back in the U.S. and contributing to its revenues as soon as possible. I believe it isn't a matter of if Ford brings the Ranger back, but when.

Text Source: The Motley Fool
 
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#2 ·
Twenty years ago with the Ranger, had a wide choce of options, they kept getting fewer and fewer. Found a great read on a factor I hadn't thought about that has to do with gas mileage effects on sales.
Dave

In 2006, CAFE altered the formula for its 2011 fuel economy targets, by calculating a vehicle's "footprint", which is the vehicle's wheelbase multiplied by its wheel track. The footprint is expressed in square feet, and calculating this value is probably the most transparent part of the regulations. Fuel economy targets are a function of a vehicle's footprint; the smaller the footprint, the tougher the standards are. A car such as the Honda Fit, with its footprint of 40 square feet, has to achieve 61 mpg CAFE, or 43 mpg IRL by 2025 to comply with regulations. At the opposite end of the spectrum, a full-size truck like the Ford F-150, with a footprint of 75 square feet, only needs to hit 30 mpg CAFE, or 23 mpg IRL, by the same timeframe.

How the fix is in

On the surface, the footprint requirements can be viewed as logical; a compact, fuel-efficient car like the Honda Fit, should be able to hit tougher targets, by virtue of its small size, aerodynamic profile and powertrain choices. Without any advanced technology like direct-injection, lightweight steel or aluminum construction or even low-rolling resistance tires, it manages a respectable 28/35 mpg IRL, while offering a practical, fun-to-drive package. The Ford F-150 has a very different mission; it must be large, durable, powerful and able to meet the needs of a full-size pickup, and will naturally be less conducive to achieving the kind of fuel economy that a Fit can.

Unfortunately, the footprint method has the opposite effect; rather than encouraging auto makers to strive for unprecedented fuel economy in their passenger car offerings, it has incentivized auto makers to build larger cars, in particular, more car-based crossovers that can be classified as "trucks" as used to skew fleet average figures, much the same way the PT Cruiser did. Full-size trucks have become a "protected class", safe from the most aggressive targets, while compact trucks have become nearly extinct as a result.
Whole article
http://www.thetruthaboutcars.com/2012/10/how-cafe-killed-compact-trucks-and-station-wagons/
 
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