Phil Biggs covers the automotive industry for NewsTalk 1340 WJRW
April 17, 2013 – 10:30 am ET
DETROIT, Mich. – Automotive sales performance in March was strong with the Domestic Three and Honda leading the way. Overall sales in the U.S. grew 3% in the month, with annualized volume projected to reach nearly 15.3 million units. Ford Motor finished the first quarter with an 11% gain over first quarter 2012, and 597,000 total units sold, good for a solid second place in both categories. Here are some reasons why Ford is getting the job done so nicely:
It’s all about product, and right now Ford’s lineup is the best in the industry. Consider the new Escape, Fusion and Focus, and the impact each is making in their respective categories and across virtually all demographic lines. Then look at the venerable Explorer, Taurus and Mustang…each of which has a storied history of success while remaining consistent performers today. Add the iconic F-150 and its #1 status in the pickup segment and it’s hard to argue against this hard-charging lineup. The enhancement of Eco-Boost coupled with an array of electric and hybrid choices have positioned Ford to be the mileage leader as consumers remain sensitive to gas prices at $4.00 and above. All in, Ford leads the product pack and provides American and global car buyers with a robust portfolio of choice.
Ford has largely made expert financial and manufacturing decisions during these gaunt economic times. The Ford legacy reached mythical proportions when they refused bailout funds in 2009. Recall how Ford did its own re-structuring in late 2006 when Alan Mulally arrived from Boeing to become Ford CEO, and later they did not take any government hand-outs. The public-at-large cheered Ford’s independence. Like General Motors and Chrysler, Ford then committed to accelerating its hybrid development programs, mostly on its own nickel, and launched new alliances and joint ventures to build alternative powertrain options. Ford’s Wayne plant (formerly manufacturing F-series trucks) is now flexibly assembling the traditional Focus and electric Focus vehicles seamlessly on the same production lines. This is a global first and quite an amazing process accomplishment by American-based manufacturing. Meanwhile, although Ford Europe has taken some lumps along with all the other OEMs the past couple years, it has avoided volume free-fall because so many of its vehicles have cross-market appeal to both Baby Boomers and Millennials. Because of Ford’s savvy design choices and successful global architecture and platform sharing, they have gained both aesthetic and cost advantages this decade – which has helped stave off some of the losses in Europe.
Leadership abounds under the Blue Oval. Besides claiming the industry’s most recognized CEO, there is a deep bench at Ford. It’s a huge competitive advantage, one that most other automakers cannot claim. There is no shortage of proven senior leaders at Ford, and recently appointed COO Mark Fields leads the way. Fields has been working side by side with Mulally the past year in an effort to make his eventual transition to CEO a seamless one. That’s good for investors, good for management and workers, and ultimately good for the car-buying public. GM, with its revolving C-level door until stabilizing a year ago, does not have anyone as seasoned or as visionary as Fields to replace Dan Akerson. When you add Joe Hinrichs, President of The Americas, Jim Farley, Executive Vice President and new head of Lincoln, with other senior Ford leaders, it is a team that’s envied throughout the industry.
The weakness at Ford is the urgent need to re-define Lincoln. The need to create separation from Ford itself and make Lincoln uniquely its own luxury brand is critical, and puts Farley and the Lincoln team on the proverbial heated seat. Today few people ever associate Toyota and Lexus as one car company. Despite the stylish new MK concept, there are preconceived ideas among some luxury car buyers that Lincoln can’t take on the European and Japanese brands. But with great new product in the pipeline, Lincoln aspires to compete…if they can stay in the game. My bet is on Ford to make a dramatic impact with Lincoln in the profitable, growing luxury segment.
Nevertheless, at the retail level, Ford has a great challenge…to create badge separation while duplicating the coolness of an Apple Store as new Lincoln dealerships are launched. Creating that unique experience will be daunting. But, compatibility with luxury consumers” specific desire to achieve “digital fitness” is a good first move for Farley.
Overall, Ford has made excellent design, manufacturing, and financial decisions over the past several years in the toughest economic times. Going forward, their winning hand should keep them holding a few trump cards as other automakers look to follow suit.
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