Ford is looking for ways to speed up the introduction of its next generation of vehicles, says the company’s new vice president of marketing and communications.
Jim Farley, hired away from Toyota by Ford, told TheCarConnection.com he was in the process of revamping the company’s marketing effort, which he says is too centralized. He’s also in the process of streamlining the presentation of option packages and dealing with Ford’s dismal sales numbers for 2007.
Ford's sales dropped twelve percent last year, more than those of any other major automaker, and the company wound up yielding the number-two spot in sales to Farley's old employer Toyota, which sold 2.62 million vehicles to Ford's 2.57 million units.
George Pipas, Ford’s sales analyst, said the decline was due to Ford's decision to slash sales to rental car fleets and end production of the old Ford Taurus. The cuts in fleet sales will put Ford on a better footing and help boost the residual value of the company's products, easing consumer concerns about rapid depreciation, Pipas said.
Nevertheless, the sales numbers were worse than expected and Ford stock dropped to $6 per share in trading to close at $6.11, the lowest price after adjusting for stock splits in 22 years, according to Bloomberg News Services.
Farley said the numbers, while difficult, showed that Ford could still attract consumers with the right product. The Ford Edge has been doing very well in California and he flatly predicted the new Ford Flex will also do well later this year.
The 45-year-old Farley was recruited by Ford from the fast track at Toyota, where he had blazed through a series of assignments and promotions over the past decade, presiding over the launches of the Scion brand and the new Tundra pickup truck.
Speeding up the recovery
Since joining Ford in November, Farley has gone through an immersion in Ford's corporate culture and it's clear his marketing portfolio has been stretched to give him influence on product planning and product development.
For several months, analysts have expressed concerns about whether Ford's cash will run out before the company's long-promised product offensive get underway early in the next decade.
Farley, however, told analysts and reporters during the monthly sales conference call that some Ford products are being pulled ahead to expedite their introduction.
"We're going to bring some products earlier," he said. However, he offered no specifics about the changes in the company's product plans.
However, Farley also said the company was looking at its global product portfolio for additional vehicles that could be sold in the United States. He is particularly eager to shore up the company's position in the "B and C" or subcompact and compact car segments, he said. With gasoline prices topping $3 per gallon, subcompacts and compacts have been gaining buyers for the past couple of years and are expected to grow again in 2008 and 2009 as consumers grapple with higher fuel prices.
Farley, however, also said the company still had some latent strength that will provide traction in a difficult market. The F-Series is still the best-selling pickup truck in the U.S. despite the competition from General Motors and Toyota. The Edge crossover and the Fusion sedan show the company can build appealing products and the improvement in the company's quality levels is genuine. The revamped Ford Focus, equipped with Sync, also is off to a fast start and illustrates the company's ability to reach new customers, Farley said.
"By the end of the year 70 percent of our Ford, Lincoln, and Mercury lineup [will] be new or significantly upgraded," Farley said.
The upcoming North American International Auto Show is vital for Ford because it will offer a chance to show Ford’s latest hardware, including the F-Series pickup truck, which has been revamped completely in face of the new challenges. Farley didn't outline any specific goals for the show but he made it clear he wants the show to leave an impression.
Still, the challenges at Ford are daunting. General Motors' turnaround appears to be gaining momentum. Ford will have to go several more months without any new products in the showroom, noted Tom Libby of J.D. Power & Associates.
"But they know that and they seem prepared to deal with it," Libby said.
-- Joseph Szczesny