If Ford's Focus can win over buyers who rejected both the Escort and Contour as too small, it can cut Ford's development budget for future small cars in half, by building one, instead of two. Simultaneously, the company could eke out more money per unit. The Focus splits the difference between the Escort and Contour in length, width, and price. And consumers seem willing to pay a little more for more room and greater refinement than the Escort offers. In fact, the top-selling small cars, the Ford Escort and Chevy Cavalier have lost money for years.
Automakers subsidize their sales to meet corporate average fuel economy regulations.
Chrysler, too, expects to earn a premium on each PT Cruiser it sells. Because it's a truck by government definitions, it will lower the company's truck corporate average fuel economy, and allow more sales of profitable big SUVs and pickups that lower the average. Before bookmarking this page in your browser, click here . The Christian Science Publishing Society. All rights reserved.