Although Ford only makes about $100 from each Focus it currently sells, The Blue Oval Boyz plan to bank big bucks from small cars. At a dinner with journalists last night [Ed: our invitation must have gotten lost in the mail], Ford Americas President Mark Fields said the small car segment is at "critical mass" and that Ford's "eager to tap it." The Detroit News reports that the formerly mulleted Mulally minion stated "we'll see a bigger smaller car segment," and wistfully added FoMoCo wants to start charging premium prices for small cars. And how will they accomplish this goal? With "exciting designs, best-in-class fuel-economy, excellent craftsmanship and innovative new infotainment technologies." And even though the Fiesta will be hecho en Mexico, the Mother of All Union Payoffs (a.k.a. the health care VEBA deal) will save Ford enough money that they can finally build small cars at a profit. Of course, the first thing they have to do is convince the average American small car buyer that a Ford small car is worth the same money as a comparable model from Honda or Toyota. [Ken Elias' Ford Death Watch later today.]
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Way to be ahead of the curve, Mr. Fields. For a guy who led Mazda, one wonders why he didn’t see the shift coming.
There is no convincing needed. Just look around at all the Foci and Aveos (Avei?). Just undercut the Honda Fit by a couple grand and you’ll sell them.
There is a growing market for new, small, and cheap. Quality is job #4.
The question is: will they stick to their guns if the short term profits aren’t there?
Ford is notorious for cutting corners on production models after 1-2 years on the market. The GEN II Explorer (out of greed) and Lincoln Continental (poor sales) are two models I’ve witnessed personally. So now, do they have the stones to make small cars better than Honda/Toyota and keep up the good work for the next 20 years?
or Hyundai.
Sajeev Mehta – good point
“Ford is notorious for cutting corners on production models after 1-2 years on the market”
Ford is one place where you always get more in the first year of a cars life then later (I don’t mean just more recalls). It seems like after a car is launched no one can control the bean counters. Heck, even way back in 75 when they introduced the Granada they took out the standard bucket seats after one year.
The first year seems built to sell at retail, after that it slowly becomes a rental only car. Look at the Taurus for the best example. Were any sold at retail after around 2002?
I will never understand why the name was brought back. The only good will it had left was maybe with Avis.
I’d love to see the Big 2.8 give us more options, but they better engineer and price it to really take on the Civic. It’s not like Honda just started making the Civic.
Of the D2.8 I think Ford best understands small cars as they are a powerhouse in Europe but Ford NA just doesn’t update them soon enough or doesn’t do enough for the Full Model Change.
But from what Ford has done in the past with some major safety gaffes I will never trust them with my family’s safety (no matter how much many who’ve been burned “literally” could forgive them for it).
I can’t wait for the Fiesta (Mazda 2) to reach our shores and see what Ford does to it to make it “US market friendly.” Hopefully, not much. I could certainly see it as a competitor to the Fit if it retains the relative sportiness that Mazda seems to put in every car they sell. This type of car could certainly fit in with “FoMoCo wants to start charging premium prices for small cars” goal stated in the above article.
I still don’t understand all these complaints about Ford that reference vehicles from the last management team and use it as evidence of how this management team is going to screw up. If I look at the Fusion, it is in its last model year, its quality is higher than ever (it’s been high since launch, and is higher now than at launch – TGWs are lower than some Japanese brands that will remain nameless) and it added ESC this year instead of just waiting until next year’s refresh. The F-150 had similar changes for 2008. Then there’s the Focus. The coupe wasn’t selling well at all, so they updated the exterior to differentiate it more from the sedan. That wasn’t part of the original product plan.
I guess we just choose to see what we want – ignore relevant data points where they exist.
@ RobertSD:
People aren’t going to have faith that Ford’s new management team will resist the aggresive MCR’ing of production models based on a handful of examples after years of doing otherwise.
I hope to see Ford continue putting engineering resources toward continually improving vehicles and reducing warranty costs and regular refreshes rather than on material cost reductions.
Well, at least they know that their designs have got to be ‘exciting’ enough to set them apart (what took them so long?)
IF -big If- the product looks, feels and drives great AND the quality is at or near the top of the class (as promised) then I believe that a strong marketing effort is going to have to be critical.
A smart, consistent, convincing message is going to have to be a HUGE part of rebuilding the brand from era-after-era of Ford small cars like the Pinto, Escort and the early Focus with it’s monthly recalls. This is where Jim Farley is going to have to prove his mettle…
Given the right facts (and incentives), American consumers are usually an open minded bunch. I think they will give Ford another try if the product and the marketing hit the spot.
I like Ford’s chances better than the other 1.8. But Mark, lets not get ahead of ourselves with pricing. Show us what you got first.
“formerly mulleted Mulally minion”. I love it.
Lumbergh21 wrote:
I can’t wait […] see what Ford does to it to make it “US market friendly.” Hopefully, not much.
I can just hear it now – “America doesn’t want hatchbacks, so we converted Fiesta into a sedan for the US market”.
I had a Mercury Bobcat (ford pinto)back in the day. It actually was a great car. It was a four speed, the hatch was useful, and I never had any real problems with it.
I would take a chance on another Ford product before any of the other big Detroit automakers (liars). I guess i already have with my ’06 Taurus, and my plan to buy a Mazdaspeed 3 next.
And I’m actually a big Honda fanboy but am dissapointed with their pricing.
TRL : The first year seems built to sell at retail, after that it slowly becomes a rental only car. Look at the Taurus for the best example. Were any sold at retail after around 2002?
That reminds me: back in the day, there was a Newsweek article about the 1996 Taurus talking about why its failing in the market. A large portion of the article focused on Budget Rent a Car’s problem with the GEN III Taurus’ over-engineering and extraneous interior upgrades: soft plastics, cargo nets, that folding console thingie, etc.
Ford came back with the Taurus G, a stripped down model that eventually became the bare-bones roots for all Taurii in the coming years.
We better keep a close eye on the Fiesta and Euro Focus when they get here. Then again, they’ll never (misguidedly) try to move upmarket like the ’96 Taurus.
I read this article in the Detroit News this morning, and I quickly became bored reading about Mark Fields’ fluff. Seriously, how much is he willing to stay on track with the Euro Fords if he’s the one who championed the Flex (which hasn’t even sold 3000 models yet)? But then I became un-bored after reading the very last words of the article:
“Fields said a new pact with the United Auto Workers union expected to save millions in retiree healthcare costs will also help improve the equation for small cars.”
First of all, how do those even relate, and SHOULD they relate?? So…Fields was talking about how the perceptions Americans have about small cars was finally changing, and that jacking up the prices for them is next on his to do list. If you really think about the above quote, what Fields is really saying is that Ford gets to pay less for healthcare even though they promised otherwise…which will improve the “equation” for small cars.
I guess this could be taken as now since they chumped their employees they have a chance to pour money into their Euro Fords…but I took it as Fields saying something like “our employees will have to spend more on their health out of their own pockets, thus, in turn, forcing them to buy Ford’s small cars instead of the larger ones.”
Maybe I’m thinking too much, but I really don’t think Mark Fields is truly behind making their new small cars changing the perception of the 2.8’s small car offerings.
Ford can make money on small cars, all they have to do is file chapter 11, and restart the company under a different brand name to fool the customers into thinking they’re “All new and improved !” like Ford and GM do with their cars models. Maybe they could pimp up the interiors of their cars to make people think they’re getting something snazzier for their money ?. Either that, or the could start putting MINI badges on their small cars and selling them at a big markup. How about an electric car to compete with the Volt due out in 2010(ish)…..they could call it the Ford Futurion. ;)
Such Foresight – a bit like closing the gate after the horse has bolted!
Well, it sounds like a good idea in theory…but the problem is that Ford basically gave up on the small car market with the 2005 Focus, which was decontented (tilt and telescoping steering wheel was part of an option package, for instance), and basically ceded the small-car market to the Japanese and Koreans. And of those two, Ford (and the Japanese, for that matter) needs to worry about the Koreans, who made quality improvements in leaps and bounds. Instead of making a big deal about the Fiesta, Ford made a BIG mistake when they didn’t bring the Euro Focus to market here – a bit ironic, seeing as the Focus was SUPPOSED to be a true “world car”.