kansaiwalker1

New Ford cars are slow to catch on in U.S.

Analysts question success of models auto firm is banking on
Business with CNBC
msnbc.msn.com



DETROIT - Ford Motor Co.’s new vehicles have yet to meet targeted sales volumes, compelling analysts to question the success of models the automaker is banking on to stem its bruising U.S. market-share losses.

The second-largest U.S. automaker hopes to sell more than 200,000 of the new Five Hundred and Montego sedans, and the Freestyle wagon this year. But four months after their launch, the annual selling rate for the three cars built at Ford’s Chicago assembly plant is only 167,000.

Rod Lache, an analyst at Deutsche Bank, said a bullish case on Ford — that new products would drive improvement in market share, vehicle mix and pricing — is losing steam.

"The trends on mix and share have been running counter to those assumptions, implying downside risk to earnings expectations,” Lache said in a recent note to clients.

Ford’s new vehicles are central to its strategy for boosting U.S. market share and increasing much-needed automotive profit.

The automaker had dubbed 2004 the “year of the car,” but the new cars arrived at dealerships too late in the year to stop Ford’s car sales from dropping 14.3 percent in 2004.

Ford ended last year with a U.S. market share of 18.3 percent, the lowest in more than three decades.

To reach the targeted selling rate for the new models, Ford needs to increase sales of Five Hundred, Freestyles and Montegos by 55 percent to at least 17,000 in February from 10,921 last month. U.S. sales of the cars increased 5 percent from December to January.

"Investors remain highly skeptical about the Chicago products,” Merrill Lynch analyst John Casesa said in a recent note to clients.

Ford executives, however, are still optimistic about the vehicles. The challenge for Ford, is to convince consumers they can buy sedans at its dealerships, and not just noteworthy pickup trucks and sport utility vehicles.

Some analysts say the new models, which compete in a market heavily dominated by Asian automakers, fail to make an impression on consumers because of their conservative styling.

Full Article Here: http://msnbc.msn.com/id/6953362/

Steelers Wheels

Sooooo.. boring underpowered cars with ok interiors aren't catching on? That seems odd..

Minch00

Ford just can't compete with the Chrysler 300, much less the import makes in the same class. I say they just stop trying with the sedans, and stick to the Mustang and F-series pickups.

Maximized

Ford makes great sedans, but they aren't available in the US. If Ford brought the Mondeo and Falcon to the US, it would help Ford out a lot in the sedan department.

biker

As the saleman said - the problem is that people don't even bother with a test drive - they have such a poor rep in the sedan world.

Biker, who agrees that some of Ford's overseas offerings are better than USDM models.

Minch00

That's true, I didn't remember the Falcon

cusdaddy

Both the 500 and Freestyle are pretty decent, but the biggest issue is that a 3.0L 200-hp just doesn't cut it (especially for the Freestyle).

Ford needs to get their next gen V6 out soon.. How many years has this new engine been in development already?

DownUnder

Turbo Falcon's are awesome; 4.0L I6 with a big GT40 turbo in a family sedan is pretty damn sweet. I wish Ford would have the balls to bring the Falcon here like GM did with the Holden Monaro (GTO). IMO it would be a great competitor for the SRT-8 300C/Charger, CTS-V, etc. And since it's a turbocharged it has a lot of potential, i.e. APS' XR6 Turbo Falcon ran the Ľ mile in 10.9s@124MPH and it was still using the stock turbo without n2o and it was an ATX!

Fibonacci

Why is that? I've never understood why Euro designed Ford's aren't sold stateside, most of the ones I've seen are much better looking. Do Americans like boring styling, me thinks not!

titan

Get a decent eninge in the cars, and stop rebading. They played it to safe with the 500 and poor Mercury still doesn't have an identity.

Maximized

Didn't know it used a GT40 turbo; that's a large turbo that can support upwards of 600 HP. Factory Forced induction cars are great for making relatively cheap power. SVT just announced that they are going to use AWD and Turbos in their upcoming models

MADCAT

Did anybody watch today's Car and Driver in which they test drove the Ford 500? I think that could have been the worst and most boring car they ever tested.

biker

Styling issues aside, most European models are sized for Europe - too small for American tastes. I think a European Mondeo would have fared better than the 500.

Take the USDM Accord and Camry - the definition of bland. The European Accord (Acura TSX) and Toyota Avensis are much better looking cars but are 9/10 the size.

Every once in a while Ford does import some overseas model and rebadges it for USDM market - like my old '74 Ford Capri (built in W. Germany).

M TYPE X

But Ford decided NOT to go with the Mondeo. The upcoming Fusion/Mercury Milan/Lincoln Zephyr triplets are based off of the Mazda 6. Ford going forward will depend more on Mazda and Volvo platforms for US models rather than Ford's own European and Australian operations.

The Five Hundred is a decent large sedan in need of more engine power.

I drove around Cleveland and Columbus today. It's not as GM/Ford/Chrysler oriented as Detroit, so I feel I can finally say these things without an inherent sampling bias: the new CARS with Detroit nameplates aren't selling. The 2004 Grand Prix seems to have done the best of all the recent new sedan releases. The 2004+ Malibu hasn't sold so great, the Pontiac G6 is rare, the Buick LaCrosse is not on the roads ... I've seen a handful of Five Hundred and Mercury Montego, but not today, and I was on the roads for something like 8 hours.

The Chrysler 300 has done well but you really don't see all THAT many. Most Detroit nameplate sedans you see are older GM and Ford models, and Dodge Intrepids.

Maybe a lot of the new Detroit cars just don't stand out in a crowd? I've seen a handful of Dodge Magnum wagons, but not enough in volume.

As for SUVs, the GM and Ford models are supposed to be faltering (according to Detroit News sales reports). You wouldn't notice, though, because they haven't redesigned in ages and there are so many TrailBlazers and Tahoes/Suburbans on the roads anyway.
As for Chrysler ... isn't the new Dodge Durango out? If so, why haven't I seen any outside of metro Detroit? And the new Jeep Grand Cherokee ... same thing: only a couple on the Ohio Turnpike.

titan

Damnit, I missed it over some BS... I hate it when I miss a test drive of an important new car.

jdone

I watched it. They also added the disclaimer that for the 500's target market boring isn't necessarily bad. Ford didn't plan to sell any of these things to people like us or the editors of C&D anyway.

ajs887

Ford's sedans are perfect for the rental car market. They can compete with the best of the best: the cobalt, malibu, and impala.

Steelers Wheels

Good take on the American Sedan situation

Toronto seems slightly different- I see TONS of 300C's- as a matter of fact last night I went for dinner with the gf and we counted 5 at one intersection- not sure how many we Hemi powered but damn, that's alot. I do see a few Magnums, but not a big number

As far as G6- haven't seen any, nor Freestyles, 500's. GP's a fair number, but I have a gut feeling they are Fleet cars- I know our company is responsible for a huge number of them being on the road.


As far as the 500 goes, I think that people are smart to stay away from that car, especially with that CVt tranny- new tranny = trouble trouble trouble

cusdaddy

In their magazine review, they were actually pretty postive. They said it needed more power (which it does) and the styling is boring, but it fits the target market quite well.

Cars like the 500, Camry, etc usually aren't well liked in Car Enthusiast magazines because they (like most of us) see cars differently than much of the consumers in the US (who see cars as more like appliances)

M TYPE X

The Five Hundred could be a sleeper given a more powerful powerplant. Right now, it just blends in and doesn't attract any attention. And the price tag? Most people say pass and go for a cheaper American sedan.

I don't buy into the Chrysler 300 hype. The lower-trim models are gutless and just big without any style other than "big and blocky." I had to dodge around a white/cream colored one getting on the expressway earlier today ... couldn't accelerate out of its own way with three full-size adults inside. And in Ohio, when I say fullsize, I mean FULLSIZE.

DownUnder

Yea, I was quite surprised they're using a large turbo in an OEM application for a sedan. Here’s an interesting article that C&D did on the XR6T Falcon.

MADCAT

You are so right about the size and blocky part. I see this new Magnum parked in front of my office building. This week I see huge dent at the front left wheel fender. Could it be that the drivers cannot see past the sheet metal where it drops down like a box? This will be a major problem with this styling.

F23A4

As far as the Falcon goes, I've always liked the Falcon and felt the it was WAY better styled than any Taurus. With sales volume in mind though, FWD cars will sell much better than RWD cars in the mid-size family car category. As such, if the Falcon came here as a Taurus or 500 replacment, it'd probably be retrofitted with some sort of anemic Duratec (rather than the 4.0L I6 offere down under) and setup as FWD. (It would be nice of Ford replaced the XR8's Boss 260 with the 2005 Mustang's 300hp/320lb-ft V8 and brought that stateside.)

Anyway IMHO, Ford is in desperate need of the type of makeover Caddy had with their wedge designs and Chrysler with their 'Hemi' campaign.

chungkopi

i have yet to see ford 500 on the road.

Infamous425

the 500 has faux wood that looks faker than the faux wood you'd find in a hyundai

F23A4

Hertz
I've seen quite a few of them on the road. However, I DO suspect that a lot of them have been Hertz specials.

kansaiwalker1

The New York Times recently tested a Freestyle and this is what they said about the engine:


"The Freestyle's only engine is a 3-liter V-6 rated at 203 horsepower and 207 pounds-feet of torque. While not the class laggard, it is substantially less powerful than the best in this class - and feels it. For a vehicle that weighs around 4,000 pounds, the Freestyle is underpowered. "

http://www.nytimes.com/2005/02/13/au...s/13AUTO.html?

ric

They did bring the Mondeo to this country rebadged as the Contour and the Mystique. Did not do too well, though I loved my Merc Mystique with a v6, fully fitted interior and really superb handling. Too small and not ostentatious enough for the US market....................

ric

This week's BUsiness Week says that Ford was "stung" by the public's rejection of the most recent really froggy looking Ford Taurus, and that - since bland styling works for Toyota, they thought bland styling would work for them as well
which kind of misses Toyota's point, after all. Also, BW contends that the use of th Volvo base is a bit challenging for the FoMoCo designers to deal with.

ric

I don't think there is any reason to buy this car, since it is undistinguished in styling and underpowered, unless you live next door to a Ford dealer. Apparently, they dropped the price after the new Chrysler product, which was pricepointed at about $5K less than the Ford 500 and has been beating the crap out of it in sales.

DownUnder

The Contour didn't do so good here cause it didn't standout much. But if they bring this new Ford Mondeo from Europe to the US, I'm sure they'll do a lot better then they intial did with Mondeo (Contour) back in '95.

F23A4

We had the Contours when they first came to Hertz, replacing the Tempos in the fleet. While they were a HUGE improvement over the Tempo, they had NOTHING on the 626, Camry and Accord in terms of quality and powertrain. Even the occassional Grand Ams (that came through our Hertz owning area) seemed a little better.

The only Contour I'd ever considered getting was the SVT.

MADCAT

You can buy a 4 banger Accord and run rings around this car. SAD.

Moog-Type-S

Like others have said boring underpowered cars = poor sales.

kansaiwalker1

Related article- Critics divided over the Ford 500:



Early reviews for the Five Hundred sedan give Ford's new flagship good grades in interior design, room and handling. But critics say the car comes up short in the key areas of styling and performance.

As Ford's big sedan hits U.S. dealerships, none of the critics is saying the car is downright ugly. What they do say is that the car has no standout design features such as the brawny grille and broad shoulders of the Chrysler 300 or the sharp edges of the Cadillac CTS.

Writes Automobile magazine's Michael Jordan, "As soon as you see the Five Hundred, you can tell that it's an old man's car, perfectly practical yet fundamentally uninspiring."

That's hardly a ringing endorsement for a crucial product Ford is counting on to help turn around sliding sales and sagging market share.

Jim Kenzie of the Toronto Star calls the Five Hundred "handsome." But he writes: "Looking at the Five Hundred reinforces my belief that J Mays, group vice president of design at Ford, can only draw one sedan. He was at Volkswagen when the current Passat was designed and at Ford when the current Euro Mondeo emerged. They all look identical."

Says Steven Cole Smith, auto editor of The Orlando Sentinel, "I think Ford may be overestimating the pent-up desire for a big, anonymous-looking sedan, no matter how roomy and capable it is."

Smith's weekly reviews are published in dozens of U.S. newspapers.

Ford isn't worried

Ford seems unconcerned about reviewers' impressions of the car. "Overall, we are very pleased with the reaction from all our constituents, from the media to dealers, employees and customers," says Ford spokesman John Arnone. And it has many favorable comments to cite, even though many have a mixed-bag flavor. For example, Warren Brown, auto writer for The Washington Post, wrote: "The exterior isn't stunning, but the Five Hundred's passenger cabin is one of the best Ford or anyone else has developed for a passenger sedan."

Pulitzer Prize-winning automotive critic Dan Neil of the Los Angeles Times says he believes the car's conservative design shows "admirable restraint." He also sees a visual similarity to the Passat.

Neil asks: "Is the car beautiful, exciting? "No. But (it's) well-balanced, grown-up, and it's a terrific packaging job. It suggests mental health, not emotional rescue."

Ford hopes to sell 120,000 Five Hundreds a year in the United States. It says it has 18,000 pre-sold orders for the car.

The company is counting on the Five Hundred and two other new vehicles - the 2005 Freestyle sport wagon and the mid-sized 2006 Fusion sedan - to reverse Ford Division's skidding sales.

Performance is an issue

The 2005 Five Hundred's 3.0-liter, 203-hp V-6 also has been singled out for criticism.

Edmunds.com calls the Five Hundred's performance "mediocre." A review by Paul and Anita Lienert for The Detroit News says the car has good initial acceleration but "quickly runs out of torque as the vehicle speeds increase."

Jim Mateja of the Chicago Tribune also wonders whether the Five Hundred has enough power.

Ford offers no optional engines on the Five Hundred.

Ford focused much effort developing a stylish interior and on creating a full-sized sedan with a lot of room. Ford has been quick to point out that the Five Hundred has 21 cubic feet of trunk room - enough to hold eight golf bags.

Reviewers generally agree that Ford accomplished what it set out to do in these areas. But they still come back to styling.

Natalie Neff of AutoWeek, a sister publication of Automotive News, wrote: "The Five Hundred constitutes one of the most conservative styling efforts we've seen from Ford in a generation, a conviction amplified by the concurrence of its launch with - and the excitement generated by - Chrysler's 300.



http://www.autonews.com/news.cms?newsId=10018

kansaiwalker1

More stuff:

Ford Preparing Facelift For Five Hundred Sedan


By Sharon Silke Carty Of DOW JONES NEWSWIRES

DETROIT (Dow Jones)--Even though they haven't even hit the market yet, the Ford Five Hundred sedan and Freestyle crossover vehicle will be getting facelifts soon thanks to widespread criticism that the cars are boring.

J Mays, vice president of design at Ford Motor Co. (F), said Monday the company has been working on refreshing the new cars for six or seven months.

"Some have said they were a little too conservative," Mays said. The newer versions will get a few styling changes, including a more aggressive shiny 3-bar grill.

Ford had dubbed 2004 "The Year of the Car" - promising that new products like the Five Hundred would help lift market share. But, unlike the popular Chrysler 300 sedan, the Five Hundred hasn't set the world on fire. Focus groups and magazine critics say that its dull exterior make it a ho-hum offering. And its 203-horsepower 3-liter V6 engine - the only engine offered on the car - is puny compared to Nissan Altima's 3.5-liter V6, which pumps out 250 horsepower.

Boring styling has never been a death knell in the sedan market. Take, for example, the Toyota Camry and Honda Accord, which have sold 272,800 and 242,000 sedans respectively year to date. But Ford doesn't have the same quality reputation as Toyota Motor Corp. (TMC) and Honda Motor Co. (HMC), said Art Spinella, president of CNW Marketing Research, so buyers are likely to go elsewhere.

"If you have a reputation like Toyota and Honda do for building cars that are bulletproof, you can sell boring cars," Spinella said.

Spinella's firm has conducted focus groups with traditional Ford buyers, and they have come away lukewarm on the car. People said the car was "hardly distinguishable from anything else," Spinella said. Comparatively, other focus groups were excited about the Chrysler 300, which has been a hit since its launch earlier this year.

Still, some dealers say customers are are expressing a lot of interest in the car. Jerry Reynolds, owner of Presige Ford in the Dallas area, said he's received as many calls asking about the upcoming Five Hundred as he has for the newly remodeled Ford Mustang, both due out in October.

The new sedan will give Reynolds something to sell against the Toyota Camry and Honda Accord. Ford's current sedan, the Taurus, has become largely a fleet vehicle and doesn't generate much consumer interest.

"I don't have anything that competes," Reynolds said. "This car competes."

Mike Wall, an industry analyst with CSM Worldwide, said the fact that Ford is working on redesigning the car already "is an indication that all is not right in the world." The sedan is too conservative, he said, and lacks a powerful enough engine to compete with the Asian automakers.

Base price for the Five Hundred is $22,795, which is lower than most of its competition. But Spinella said focus group buyers thought that was about the right price - which could be bad news for the sedan. Focus group members thought the Chrysler 300 and Toyota Avalon sedans should be priced a few thousand higher than they actually are.

"The Five Hundred is right about where people think it should be - and without having anything else to distingiush it from the competition, that's not good enough," Spinella siad. "If you're not going to do it with styling, you should do it with price."

-By Sharon Silke Carty, Dow Jones Newswires; 313-226-1249; sharon.carty@ dowjones.com

Link: Ford Preparing Facelift For Five Hundred Sedan

kansaiwalker1

You can get a hint of the new 3-bar grill look over here:



http://www.detnews.com/2004/autosins...c01-279950.htm

kansaiwalker1

And More stuff:

FEBRUARY 21, 2005

NEWS: ANALYSIS & COMMENTARY

Ford: Is Caution Killing A Comeback?


Bland styling is keeping its recent crop of family sedans on dealers' lots


A year ago at the Detroit Auto Show, Ford Motor Co. (F ) kicked off its much-hyped "Year of the Car." In 2004, the auto maker proclaimed, it would roll out a bevy of new models to reverse the decline it had suffered in the passenger-car market. It also aimed to shore up its position in the crucial family-sedan segment that it once led with the Taurus. But with little improvement to show since the new cars arrived in showrooms last fall, Ford's big comeback looks less than convincing.

Sure, two sexy low-volume models, the Mustang and the GT sports car, are selling briskly. But the trio of family sedans -- the Ford Five Hundred sedan, the Freestyle crossover wagon, and the Mercury Montego sedan -- are off to a slow start. In January all three sold fewer than 11,000 units, far shy of the 20,000-plus clip Ford needs to hit its annual goal of 250,000 cars. And while dealers say the Five Hundred is generating showroom traffic in parts of the U.S., inventory is piling up. Ford now has 122 days' supply of Freestyles on hand -- about twice the level carmakers typically like to have in stock.

Why? They are, in a word, dull. "The Five Hundred and Freestyle are not bad cars," says Global Insight Inc. analyst John Wolkonowicz. "They just blend into the woodwork." Ford insists that because the cars are less in-your-face than, say, the hot-selling Chrysler 300, they'll take a little longer to find an audience. "Already, this month, the Five Hundred is beating its objective," says Ford Div. President Stephen G. Lyons. But the auto maker's recent actions belie its public posture: It is planning a face-lift for the Five Hundred -- two years earlier than usual.

Tepid reactions have also ratcheted up the pressure on Ford's design staff. A recent executive shuffle puts the burden of improving Ford's styling squarely on the shoulders of Peter Horbury, the Briton behind Volvo's renaissance who was named chief of North American design in December, 2003 Global design chief J Mays, who embodied Ford's American design efforts for six years, moved to London at the end of 2004 with an added title: chief creative officer. The move led to widespread speculation that Mays had been moved aside. Mays flatly denies that, saying he lobbied for 18 months to relocate to London, currently ground zero for hot car design. "I'm doing exactly the same thing as before," Mays says. "I'm just putting my head on a pillow in a different place."

TOPPLED CROWN
So how did Ford wind up with three snoozers to lead its planned revival? The story begins in the mid-'90s. That's when the redesigned Taurus, with its radical ovoid styling, hit the market with a thud, losing the crown of America's best-selling car. Stung by the flop, Ford designers turned cautious. Bland styling works for the segment-leading Toyota (TM ) Camry and Honda (HMC ) Accord, they reasoned. Why not for Ford? At the same time, Ford, awash in profits from its hot-selling trucks, decided to go upmarket. Giddy planners thought the Five Hundred and its kin would compete with Toyota Motor Corp.'s $26,660 full-size Avalon. "They went for premium product at premium prices," says a source close to the process.

When Ford bought Volvo in 1999, engineers seized on the Swedish company's flagship S80 sedan as a basis for their new cars. The Volvo platform, although costly to build, offered lots of safety features and an all-wheel-drive option. But the platform's unusual dimensions made it tricky to design around. Horbury rose to the challenge at Volvo: pulling off a sleek sedan that turned heads. Mays, widely praised for helping design the New Beetle in his previous job at Volkswagen, oversaw the team working on Ford's three new cars. But the team struggled to find an elegant way of draping the sheet metal over the S80's strange shape, say people involved in the project. And despite a ho-hum response from focus groups, several of these people say, the models got the green light amid management turmoil in 2001.

Ford got its first jolt of bad news last summer. The "buff books" yawned -- when they weren't trashing the new models. Wrote Pulitzer Prize-winning auto reviewer Dan Neil of the Los Angeles Times: "There is no soul to this car, and it's about as sexy as going through your mother's underwear drawer." Of course, much the same has been said about the looks of the Camry and Honda Motor Co.'s Accord. But they have such a strong reputation for quality that buyers are willing to overlook their bland styling; to dislodge them, Ford needed to offer something much more interesting.

The Five Hundred also hit the market soon after DaimlerChrysler's (DCX ) new family sedan, the Chrysler 300. Not only did the 300 sport the brash styling and horsepower that car buyers crave, but Chrysler also priced the new model to start at $23,595. That pressured Ford into dropping the Five Hundred's base price to $22,795, nearly $5,000 less than originally planned, one source says. Worse, the new cars sit in dealer showrooms alongside older models boasting rebates of $2,500 or more. Says James Hall, vice-president of consultant AutoPacific Inc.: "You end up competing with yourself."

Ford execs insist there's nothing wrong with the Five Hundred and its siblings. But they concede there's room for improvement. "In hindsight, would we have preferred more of a bold statement?" asks Darryl B. Hazel, president of Lincoln-Mercury. "I think so." Enter Horbury. Ford hopes the man who made Volvos stylish can work the same magic on its U.S. brands. And Horbury clearly knows more distinctive styling is a must. "My job is riding on it," he says.

Ford is betting its cars will gather momentum in the spring, when many people look for new wheels. But if sales don't pick up, Ford's Year of the Car could turn out to be another Year of the Rebate.


By Kathleen Kerwin, with David Welch, in Detroit


http://businessweek.com/magazine/con...1045_mz011.htm

kansaiwalker1

Graphic:

Ford's Pile up:
http://businessweek.com/magazine/con...1047_mz011.htm

phile

I can't believe the Malibu leaves the lot that fast!

IMO, had the 500 came to market looking the Futura concept, it might've sold better. I know I would take more interest in it had that been the case,