Ford Ready to Battle Asian Rivals For Hearts Minds and Checkbooks of Young America

DETROIT September 4, 2006; Poornima Gupta writing for Reuters reported that Ford Motor Co. is gearing up for an all-out assault on the midsize U.S. car market with a stylish, Mexican-built sedan dubbed the Fusion that will compete against best-selling Japanese makes.

The stakes for the second-largest U.S. automaker are high. With sales of its large and midsize sport utility vehicles falling fast, partly due to high gasoline prices, Ford can no longer yield the passenger car segment to its Asian rivals.

To drum up street buzz ahead of the car's debut this fall and grab the attention of young buyers, Ford is turning to the Internet and cell phones rather than traditional media advertising.

It is using online messaging, e-mail and text messaging to reach out to young Americans, Ford Fusion launch manager Jyarland Jones said.

Ford is also using music, holding free "flash" concerts featuring emerging hip-hop and rock artists. Consumers who have signed up on Ford's Web site are notified about the location of the concerts through text messaging a few days beforehand.

Fusion's target customer is 25 to 39 years old, single or newly married and just starting to enjoy some career success, Jones said. The tag line for the car, which starts at around $18,000, is "Live Life in Drive."

"What Ford is trying to do is find hyper-efficient ways to connect the name with the image of the vehicle in the marketplace prior to introduction," said Jim Sanfilippo, executive vice president at AMCI, an automotive marketing consulting firm.

"They are trying to get some notoriety to the badge itself prior to introduction, which is pivotal," he said.

The flash concerts have been very successful with most shows packed to capacity with young, music-loving fans.

Ford now has a list of about 500,000 consumers who are interested in knowing more about Fusion, Jones said.

Fusion is Ford's long-awaited answer to today's leading midsize car brands -- Toyota Motor Corp.'s (Tokyo:7203.T - News) Camry and Honda Motor Co. Ltd.'s (Tokyo:7267.T - News) Accord.

The sedan, which will be built at Ford's Hermosillo Stamping and Assembly plant in Mexico alongside the new Mercury Milan and Lincoln Zephyr, will be filling a significant gap in Ford's car lineup since its once best-selling Taurus was relegated mostly to rental car lots.

TWO MIDSIZE CARS

Ford currently has just two entries in the passenger car market -- the compact Focus and large Five Hundred sedan. While some analysts have criticized the Five Hundred for its conservative styling, the Fusion, with its distinctive three-bar chrome grill, is considered more appealing.

The automaker in recent years has lost about 50,000 Focus owners annually, mostly to rivals, when it was time for them to trade up from their small car to a family-sized vehicle, Jones said.

Ford has been unsuccessful in some previous attempts to sell midsize sedans, including the Contour. The car, which was introduced in late 1990s, was taken off the market due to poor sales.

The midsize segment is the largest market for cars in the United States. More than 2 million midsize sedans were sold on the U.S. market last year with Toyota alone selling 426,990 Camrys and Honda not far behind with 386,770 Accords.

The other leading brands in the segment are Nissan Motor Co. Ltd.'s (Tokyo:7201.T - News) Altima and General Motors Corp.'s Impala.

"That's the real core of the car battleground in America in terms of volume," Sanfilippo said. "Those are huge, huge volume vehicles."

"We can only ride on the back of F-Series for so long," George Pipas, Ford's chief sales analyst said, referring to the automaker's best-selling pickup truck. "The key to our long-term success and long-term viability is turning around the car business."

He said Ford expects to sell around 130,000 Fusions in 2006, its first full year of sales. Ford also expects to sell around 45,000 Mercury Milans and 25,000 Lincoln Zephyr sedans next year.

Ford has not seen an increase in U.S. car sales since 1999, while its share of the total car market has not increased since 1993. So far this year Ford's car market share is up 0.2 percentage points -- thanks to new entries like the Five Hundred and an all-new Mustang that were launched late last year.

"If you can sell 100,000-plus Fusions and 100,000 Five Hundreds, you are back in the car business," Pipas said.

"That would be a big turnaround for Ford, which I think is the key for turning around the whole company," he added.