Ford scraps plan to export Focus Active amid U.S.-China trade war

Michael Martinez

Automotive News | 2018-9-4

DETROIT Ford Motor Co. is canceling plans to import a wagon version of the Focus to the U.S. from China because tariffs enacted by the Trump administration would cut into profits too much.

The automaker won't reconsider its decision even if the tariffs are eventually dropped, a spokesman said.

Ford had planned to bring the Focus Active to the U.S. in the second half of 2019 after discontinuing the sedan variant here. It had expected to sell fewer than 50,000 units a year.

"The impact to our future sales is expected to be marginal," Kumar Galhotra, Ford's president of North America, told reporters on a conference call. "Our viewpoint is that, given the tariffs, our costs would be substantially higher. Our resources could be better deployed at this stage."

The decision will mean the end of the venerable Focus nameplate in the U.S.

Galhotra said the automaker did not see "significant risk" for its other two imports from outside North America: the EcoSport crossover from India and the Transit Connect van from Spain.

The automaker is in the midst of a global restructuring expected to cost $11 billion over the next three to five years. It's revamping its North American vehicle lineup by eliminating all sedans in the coming years as it works to achieve 10 percent profit margins in the region.

Ford said it would bring the Focus Active to the U.S. in April, when it announced the cuts to its sedan lineup and said it would be one of only two cars to remain at North American dealerships, along with the Mustang. The Focus Active already is sold in Europe, and Ford said it would continue with plans to build it in China for that market as well.

Automakers have urged the Trump administration not to impose tariffs on vehicles built in China.

General Motors recently asked for an exemption on its China-made Buick Envision, which is currently under review. If it doesn't receive that exemption, executives have warned that GM could drop that vehicle from its U.S. lineup.
Ford said an exemption would not have applied to the Focus Active because of its production timing and thus did not seek one.

The Trump administration has so far slapped 25 percent tariffs on $50 billion in Chinese goods. Bloomberg reported that the administration is considering a plan to impose duties ranging from 10 to 25 percent on $200 billion in Chinese imports as soon as a public-comment period concludes next week.

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