Ford Puts a Focus on Small Cars as It Introduces a New Nameplate
With consumers infatuated with Texas-size light trucks, Ford Motor Co. is introducing a new small car with hopes of reestablishing its footing in the stagnant U.S. car market and connecting with more young buyers.
The Ford Focus, which is just arriving in dealerships now, represents a bold, multibillion dollar effort to breathe new life into a small-car market where the best-in-class products wear foreign badges.
It will be a difficult task. Ford risks turning off traditional customers loyal to its pedestrian but affordable Escort, which Ford is now positioning as a budget car. And it is introducing a new nameplate in a market where the consumer’s mantra is “bigger is better” and used sport-utility vehicles effectively compete with new small cars.
Ford, however, believes the 2000 Focus can challenge Honda Civic, Toyota Corolla and others with a cutting-edge compact vehicle that offers additional roominess, some styling flair and a small-car price.
“The Focus provides us the opportunity to rejuvenate our car business,” said James O’Connor, president of the Ford division, in an interview.
Ford is sparing no expense to make the Focus succeed. It is expected to spend more than $100 million on a major multifaceted advertising blitz that will last 18 to 24 months and use nontraditional approaches.
The campaign, which was previewed Thursday in New York, will be highlighted by 60 live television spots that star comedian Annabelle Gurwitch, host of TBS’ “Dinner & a Movie.” The live ads begin airing Sept. 9 during the MTV Video Music Awards show.
The Focus, distinguished by an edgy design of crisp, intersecting lines and rounded surfaces, is Ford’s latest effort to sell a “world car,” one sold profitably around the globe in volumes of 1 million units or more. The vehicle already has proven to be a winner in Europe, where sales are running strong and the media honored it as the continent’s 1999 car of the year.
Expectations are high for the 2000-model-year Focus in the United States as well, where the company projects annual sales could eventually reach up to 360,000 vehicles.
The compact vehicle, analysts say, is a major leap forward from the Escort, the economy-box that has anchored Ford’s small-car lineup for two decades. The taller Focus offers more interior space in the same size package, with wider doors and higher seating. It also features more refined European handling and styling, while offering more safety features and a zippier engine.
“Ford is out to prove that small cars can be attractive vehicles,” said George Peterson, president of AutoPacific Group.
The Focus is being introduced in a U.S. market that is largely snubbing small cars. While about 2 million small cars were sold nationwide last year, their market share is less than 13%, down from 20% in 1992.
With gasoline cheap by historical standards, sales of small cars have been hurt by the growing popularity of sport-utility vehicles and other light trucks. They also are increasingly competing with used late-model mid-size cars, which offer more room and features at about the same price as many new compact cars.
Since domestic manufacturers lose money on most small cars, they would pay scant attention to them if it were not for federal fuel economy standards, which require car fleets to achieve a fleet average of 27.5 miles per gallon of gas and light trucks 20.7 mpg.
Sales of small cars such as the Focus, which gets between 26 and 35 mpg depending on the engine and driving conditions, are helpful in meeting the fuel-economy requirements and avoiding potentially hefty federal fines.
The Focus also is important to Ford because it represents the first vehicle fully developed under its controversial Ford 2000 reorganization, an ambitious plan to globally reduce vehicle development time and costs by 25%.
The Focus costs $1,000 less to produce than the Escort and will be profitable, company officials said. The Escort is a steady money-loser here, though long one of the five best-selling cars in America. Ford intends to keep the Escort in its lineup for the time being, positioning it just below the Focus as a budget model competing with the Chevrolet Cavalier and Saturn SL. The Focus, which ranges in price from $12,280 to $15,795, will be offered in three versions: three-door hatchback, four-door sedan and wagon. The sedan is expected to account for nearly 70% of sales. Its main competition will be category leader Civic, the Corolla and the Dodge and Plymouth Neon.
“It’s a neat-looking car,” said analyst Willett Seltenheim, vice president of Autodata, a research and consulting firm. “It’s going to draw young people and should make a profit.”
Since the Focus represents a new nameplate to consumers, Ford is undertaking one of its biggest ad campaigns in recent years to establish the brand with young, entry-level car buyers.
In choosing to launch the vehicle with live TV ads, Ford is attempting to cut through the advertising clutter and create a buzz among Generation X, the 25 million 20- to 35-year-olds entering their prime car-buying years, and echo boomers, the next generation of 80 million teenage consumers who will soon enter the driver’s seat.
The live nature of the ads, which will be pre-scripted but allow for ad libs, carries some risk of bloopers, but that only adds to their appeal. “That will build the cult following for this,” said Bruce Rooke, executive creative director of J. Walter Thompson, Ford’s longtime agency that is developing the live campaign.
Ford will provide 120 customized Focus vehicles for six-month test drives to trendsetters, such as disc jockeys, in the five key markets to drum up interest in the product. And Ford will appeal to buyers’ demand for individuality by offering lifestyle packages to customize cars. For instance, it will offer a pet package that includes a safety harness for dogs and a spill-proof water bowl. The professional package comes with a detachable voice recorder.
“We hope to establish Ford as a cool place to buy cars again,” O’Connor said.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Smaller Car Sales
With gas prices cheap by historical standards, small-car sales have been in decline for nearly a decade. Car makers hope to lure young buyers to the segment by offering new nameplates, such as the Ford Focus, above. Annual sales, in millions:
1998: 2 million
Source: Autodata Inc.
