Ford Motor Company (NYSE:F) said its 2017 U.S. sales fell 1.1% from a year ago despite strong results for its trucks and SUVs, because of a big decline in demand for sedans -- particularly its once-popular Fusion. 

Ford's U.S. sales in December were up about 1% from a year ago on strong truck demand. That beat the average 1.8% decline expected by analysts polled by Bloomberg. Ford's December gain was also ahead of results from rivals General Motors (NYSE:GM), Fiat Chrysler Automobiles (NYSE:FCAU), and Toyota Motor Corporation (NYSE:TM), all of which posted year-over-year sales declines for the month. 

A red 2017 Ford Fusion Sport, a midsize sedan with sporty wheels and trim.

Ford added a 325-horsepower Sport model to the Fusion lineup for 2017, part of a larger revamp intended to boost sales. It didn't help: U.S. sales of the Fusion fell 21% last year, calling the model's future into question. Image source: Ford Motor Company.

The U.S. new-vehicle market is shifting

Ford's story in 2017 reflected the market's overall story: At this point in the economic cycle, sales of trucks and SUVs are still growing somewhat, but overall sales are softening. And sales of cars -- coupes and sedans -- are down significantly, as more buyers are migrating to car-based crossover SUVs.

For Ford, that means new sales records to celebrate for some SUV models, and another year of sales growth for its huge-selling (and hugely profitable) F-Series pickup family. But it also means the company is taking a hard look at its lineup of sedan models -- and some may not be around for much longer.

Why not? Take a look. 

Vehicles Dec. 2017 vs Dec. 2016 Full year 2017 vs. 2016
Ford cars (3.5%) (14.9%)
- Ford Fusion (8.8%) (21.1%)
Ford SUVs 10.3% 3.1%
Ford F-Series pickups 2.1% 9.3%
Total Ford brand 1.9% (1.1%)
Lincoln cars (25.5%) (2.9%)
Lincoln SUVs (12%) 0.9%
Total Lincoln brand (17%) (0.5%)
Total Ford Motor Company 0.9% (1.1%)

Data source: Ford Motor Company.

There's some good news in those numbers:

  • Sales of the F-Series pickup line rose 9.3% to almost 900,000 trucks sold, making 2017 Ford's best year for full-size pickup sales since 2005. As Ford was happy to note, the F-Series has now been America's best-selling pickup line for 41 consecutive years.
  • Ford sold almost 800,000 SUVs in the U.S. last year, an all-time record. That includes all-time sales records for the Edge and Escape SUVs, and the Explorer's best year since 2003. 
  • The Lincoln luxury brand held its own for the year, despite growing weakness in the overall luxury-vehicle market.

But the news wasn't good at all for Ford's sedans: 

  • Sales of the Fusion sedan, which just a few years ago was selling so well that Ford invested in a second assembly line to boost production, were down 21% in 2017. 
  • The Fusion's sales decline was the most extreme, but there were no bright spots in Ford's car lineup: All Ford-brand car models posted declines in U.S sales for the year. 

Ford appears to be planning drastic action for its cars

It's becoming clear that Ford's senior management is debating the future of most of its car models, At least some of them are likely to be discontinued, at least in the United States, while Ford appears to be looking for ways to improve profitability of the others.  

Which ones will disappear? Consider this: Ford launched an all-new Taurus in China in 2016 and an all-new Fiesta in Europe in 2017, but it apparently has no plans to build either car for the North American markets. Ford has also said that the C-Max hybrid will be discontinued here after production ends later this year. It's likely that all three will be gone before long. 

That would leave the Focus, the Fusion, and the Mustang as Ford's only car models for the U.S. The Mustang, an important and profitable brand-builder for the company, isn't in danger of going away any time soon. But Ford has said that the next-generation Focus will be built in China -- and plans for the Fusion seem to be up in the air at the moment. 

It's possible that Ford will redesign the Fusion in a way that makes it more profitable and more appealing as an alternative to an SUV, perhaps by making it a bit larger and offering more upscale option packages. But I suspect that while Ford appears to be actively debating the Fusion's future, it hasn't settled on a plan yet. 

I should note that technically, Ford's car lineup also includes the hyper-expensive GT sports car. Ford has said that production of the GT will be limited to a total of 1,000, and it's already scheduled to end in 2020. Ford sold a total of 89 GTs in the U.S. in 2017; 9 in December. 

A red 2018 Ford F-150 pickup truck.

In stark contrast to its sedans, Ford's F-Series pickups had a great year in 2017: Sales rose 9.3%. Image source: Ford Motor Company.

Meanwhile, Ford will keep investing in what's working

At the same time Ford is moving to prune its U.S. car lineup, it's also working on new SUV models. Several are in the works, including at least a couple that will be additions to the current lineup, rather than replacements. And Ford is also adding (or re-adding) a pickup -- the midsize Ranger, which will go into production late this year at the Michigan factory that currently builds the Focus and C-Max. 

On top of all that, I expect Ford to continue its recent practice of adding upscale trims and, on models like the Mustang, high-profit limited-edition variants to help boost overall profitability of its existing models. 

Long story short: Trucks, SUVs, upscale models, and performance vehicles are selling well and generating big profits for Ford. Expect investments in those market segments -- and cutbacks in others. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.