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Source: Detroit Free Press

Ford execs brush off jabs at Five Hundred

Buyers happy, they say, but some in industry prefer Chrysler 300

March 21, 2005

# A front-page Monday article about the Ford Five Hundred car misspelled the last name of Earl Hesterberg, Ford's group vice president for sales, service and marketing.

BY JAMIE BUTTERS
FREE PRESS BUSINESS WRITER

Is there really anything wrong with the Ford Five Hundred and the other vehicles Ford Motor Co. is making in Chicago, or do some people just have a case of 300 envy?

Ford's new full-size family sedan has been criticized for its styling, engine and manufacturing launch.

Ford executives acknowledge that some industry analysts, journalists and even dealers prefer the flashy design and broad range of engines of the Chrysler 300 -- which, like the Ford, debuted at the 2002 North American International Auto Show in Detroit, but hit the market seven months earlier.

But they don't agree with the criticisms, and they say their customers don't either.

They say the Five Hundred and its siblings, the Ford Freestyle crossover wagon and the Mercury Montego sedan, are hitting their sales targets, and they cite internal customer-satisfaction figures that show Five Hundred customers are even slightly happier with their purchases than buyers of the Toyota Camry, America's top-selling car and a perennial favorite of Consumer Reports.

"This is not on our list of problems," Earl Hesterburg, Ford's group vice president for North American sales, service and marketing, said of the Five Hundred in an interview with the Free Press on Thursday.

Style

The most obvious difference between the large Ford and the large Chrysler is the way they look.

While Chrysler's vehicle with a centennial name is a head-turner, dubbed the Baby Bentley, the Ford Five Hundred goes for more of an understated presence.

An instantly familiar look -- like what would happen if Volkswagen tried to make a Camry -- it is also a car that can drive right by and not be noticed.

The car simply lacks enough pizzazz to lure customers into a dealership, said Norma Binegar, co-owner of Country Roads Ford in New Martinsville, W.Va.

"Ford stopped when they got the grille," she said earlier this month. "And they should have finished the car."

Would-be customers have to get into it to appreciate it, she said, making it tougher to sell than a Mustang or even a Freestyle.

But set aside the 300, Hesterburg argues, and the Five Hundred stacks up well against Toyota's Avalon or Chevy's Impala. "This is not a highly styled segment," he said.

Engine

Nor is it a highly horsepowered segment, though that is another area where the Chrysler 300, with its available Hemi V8, stands out -- and makes the Ford Five Hundred suffer in comparison.

Value-minded Consumer Reports, which otherwise prefers the Five Hundred to the 300, ripped the "underpowered and unpolished" 3.0-liter V6.

Michael Robinet, vice president of global vehicle forecasts for automotive consultancy CSM Worldwide, said the lack of a strong engine is holding back demand for the Five Hundred and the other vehicles built at the Chicago plant.

"It's going to be a challenge until they can change the powertrain situation, get a little bit better," he said on an episode of the "Autoline Detroit" TV show that aired this month. The show airs locally on WTVS-TV (Channel 56).

Having some bigger engines to choose from would create some profit opportunities or boost the image of the car, but Hesterburg said he is not worried about sales volume.

"We've had no data or dealer feedback saying that we're missing sales because we don't have more engine opportunities," he said.

In fact, the engine, which can be mated to a six-speed automatic or a continuously variable transmission, has been very popular, said Dave Szczupak, Ford's vice president in charge of powertrain operations.

"Customer feedback has been terrific," he told the Free Press last Monday.

As gasoline prices appear inclined to stay north of $2 a gallon, he said, customers appreciate the mileage they get on their Five Hundreds.

"We're trying to get the balance of performance and fuel economy for our family-oriented customers," he said.

On Friday, however, he was in Lima, Ohio, reviewing plans to start making a 3.5-liter V6, which will go into production sometime next year and presumably find its way to Chicago sooner rather than later, though Szczupak wouldn't say.

Family cars

For Ford, the Five Hundred is only the first or second stroke of its effort to paint its way back into the family sedan business.

The Focus is a well-regarded small car, despite losing its spot as Consumer Reports' favorite.

The Taurus has been allowed to age and become no more than a feeder for rental fleets, and the Crown Victoria supplies mostly police and taxi fleets.

So in comes the Five Hundred and this fall, the Fusion -- more the size of a Honda Accord -- to try to make Ford dealerships a destination for shoppers, even if they aren't looking for a hybrid, an SUV or a pickup.

But for now, with an incomplete lineup, Ford's emphasis is on selling Five Hundreds at close to the sticker price, in the mid-$20,000s. That would leave ample room for the Fusion between the Five Hundred and the Focus, which is priced in the teens.

Ford has kept the Five Hundred out of the rental market for its first six months, though it will start to put a few in soon, Hesterburg said. The car also promises to be popular with commercial fleets -- salespeople who will appreciate the nice interior and big trunk -- but Hesterburg insists he won't push the cars.

"We haven't been discounting the car," he said. "We're not distress-merchandising it."

According to Edmunds.com, a consumer Web site that tracks incentives, deals available on the Five Hundred average $917, nearly as low as the $908 average incentive on the Chrysler 300.

The test for Ford will be keeping them low for another six months or more and hitting its combined sales goal for the three Chicago vehicles -- the Five Hundred, the Freestyle and the Montego -- of 225,000 to 230,000 a year. Last month, sales of the three vehicles hit 14,718, meaning Ford was on pace to sell 191,000 in a year. The Five Hundred accounts for about half of Chicago's output.

Hesterburg said Ford is trying to establish a desirable, competent car brand, something that even Toyota and Honda didn't do overnight.

"It takes time to do it the right way," said Hesterburg, who also has worked at Nissan and with a large group of Toyota dealerships. "You get a little bite every month, and you'll get there. ... We're trying to build this car business the right way for the long term."

Contact JAMIE BUTTERS at 313-222-8775 or [email protected].
 
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