First Chevrolet, now Ford: Both automakers have scrapped plans to sell a compact minivan in the United States.
Ford's strategy was flawed from the beginning, but there's an upside.
In case you missed it, Ford announced Thursday that it has abandoned plans to assemble and sell the seven-passenger compact C-Max minivan here. The C-Max was announced for the U.S. market last year and was going to be based on the Ford Focus platform.
A five-door hybrid and plug-in hybrid hatchback, also called C-Max, will take its place.
Last year, General Motors killed a similar vehicle -- the seven-passenger, compact Chevrolet Orlando -- for the U.S. market. While the Orlando is sold outside North America, one insider said the vehicle performed poorly in U.S. clinics. Another said a future Chevrolet vehicle would offer similar functionality.
Like Chevy's, Ford's move was a surprise. Both automakers had made firm intentions to sell a small minivan here.
I saw the seven-passenger Ford C-Max last year, crawled around the interior and was impressed with the overall package. While the minivan was going to be marketed here as a seven-seater, the third row was tight -- an area designed for kiddies. It was perfect for a young family. A small, 4-cylinder gasoline engine was under the hood. U.S. sales were slated to begin next year.
However, there was no hint on pricing strategy, although the vehicle had a premium appearance, suggesting something above $20,000. Ford never discussed fuel economy targets for the minivan either.
Why did Ford change its product plans?
Ford said today's U.S. buyers want more fuel-efficient vehicles.
So it will offer a completely different model: The five-passenger, five-door hatchback also called C-Max and available only as a hybrid and a plug-in hybrid called the C-Max Energi. No gasoline version is planned.
By making the C-Max a dedicated hybrid vehicle, Ford is going down the path blazed by the Toyota Prius. Dealers have been asking for a dedicated hybrid similar to the Prius, Ford said.
But there's another reason for the change in plans.
According to a Ford insider, the clock was ticking, and the automaker needed to give final approval to the seven-passenger C-Max and notify suppliers.
While fuel economy is a big concern with some buyers, there was another issue: pricing. The seven-passenger C-Max was going to sticker around $24,000 or $25,000, the Ford source said.
"For that price, you can buy a Dodge Caravan, which is bigger," the source said.
A base 2011 Dodge Grand Caravan stickers for $24,830 with shipping charges.
At the 11th hour, Ford concluded that the seven-passenger compact minivan would be a tough sell. I agree. The five-door hatchback will presumably have a lower price even though it is a hybrid.
A few years ago, Ford would have been unable to alter its future product plans so quickly. Give credit to the One Ford strategy. Today, the majority of Ford's vehicles created outside North America are engineered for global markets, including the United States, making a quick switch possible.
Without missing a beat, the C-Max family will debut in the same year originally slated for the minivan.