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Sources: Ford, GM looking to kill slow-selling sedans

Melissa Burden
The Detroit News

Ford Motor Co. and General Motors Co. are studying whether to stop producing multiple slow-selling sedans for the U.S. market as buyers’ tastes continue to shift to trucks and SUVs, and they look for ways to maximize profits, industry sources say.

Ford may discontinue production of the large Ford Taurus sedan for the U.S. market by the end of next year, and quit selling the subcompact Ford Fiesta here by the end of next year or in 2019, according to three sources familiar with the company and supplier planning. The C-Max, built at Ford’s Michigan Assembly Plant in Wayne, also is likely to end production by early 2019, according to one source.

Ford said its plans for the C-Max, including any potential replacement, will be part of a future announcement but it provided no details.

Reuters, in a report last week citing anonymous sources, said GM is reviewing whether to cancel at least six cars in the U.S.: the large Buick LaCrosse, full-size Chevrolet Impala, subcompact Chevrolet Sonic, Chevrolet Volt plug-in hybrid, and the large Cadillac XTS and CT6. Reuters said the vehicles under consideration were under discussion to be cut after 2020.

GM’s review also includes looking at the compact Chevrolet Cruze and replacing the plug-in hybrid Volt car with an SUV body style after 2021, according to a source familiar with the automaker’s planning.

Both GM and Ford on Monday declined to comment on the reports, saying they don’t comment on future product plans.

“The passenger car business is extremely difficult because it has been declining for several years and we are seeing competitors resort to strategies that we think are unsustainable,” GM spokesman Jim Cain said, referring to large incentives and a reliance on the rental-car market.

GM’s luxury Cadillac brand, however, has tamped down talk that the CT6, a flagship sedan, is going away. “There is absolutely — if I could speak all capitals now, they’d be coming out of my mouth — there is absolutely no plan, at all, to cancel the CT6,” de Nysschen told Jalopnik in a Friday report.

He also told Jalopnik there’s “not a single car on the chopping block.”

It’s not immediately clear what – if anything – would replace the models under review if they are canceled. It’s possible GM or Ford could continue to sell some vehicles in the U.S. even if it ends production of them here. They could ship the Buick LaCrosse or Ford Taurus from China, for example. Ford is ending production of the Focus at Michigan Assembly and it has said it will source the next-generation Focus for U.S. sales from China.

Fiat Chrysler Automobiles NV already has ended production of the compact Dodge Dart and Chrysler 200 sedans. Hyundai Motor Co. is dropping the Azera large car and a hatchback version of the subcompact Accent for the 2018 model year in the U.S.

“I think given the difficulty we’ve seen in sedan sales, taking a look at a full product plan makes all the sense in the world,” Stephanie Brinley, IHS Markit senior analyst of the Americas, said of GM’s review.

“I don’t think sedans are going to go away entirely, but there definitely seems to be some space to pare some away from the market as a whole.”

Chevrolet earlier this year discontinued production of the Chevrolet Caprice and the Chevrolet SS sports car. Both were made in Australia, where GM is ending vehicle production.

“We don’t have a replacement for the Impala or XTS,” nor the LaCrosse or Chevrolet Volt past their current lifecycles, said Joe McCabe, president and CEO of AutoForecast Solutions LLC. McCabe’s firm is forecasting that GM will end production of the Volt and the LaCrosse by mid-2020 and mid-2022, respectively. McCabe believes GM will cancel the Impala by 2020 and the XTS by mid 2020; he believes the Sonic will go away around 2021.

Sources say GM, however, could end production of the Sonic around 2019. It’s built at GM’s Orion Assembly Plant with the Chevrolet Bolt EV in Orion Township. Some sources also expect the automaker will end production of the Impala – built at Detroit-Hamtramck Assembly and Oshawa Assembly in Ontario – as early as 2019.

McCabe said GM will cease building some non-core products in the U.S. amid high inventory, changing consumer demand and amid low fuel prices.

“It comes back down to shareholder value,” he said. “If you can push more-profitable crossovers, SUV and trucks, basic math says that you’re going to improve profitability and therefore shareholder value.”

GM appears to be more nimble in making decisions around products, said Jeff Schuster, senior vice president of forecasting with LMC Automotive.

“I think in years past, we would have seen the eyes on performance, but the action would have taken a lot longer than it appears to be taking right now,” Schuster said. “It’s a different environment than years past and we’re seeing a much, more proactive management style, instead of waiting for things to happen and then responding.”

Staff Writer Ian Thibodeau contributed.