Ford CEO Alan Mulally has laid down the law, they say, and the result is that the European Ford Focus is coming to the States. Labeled the F1 platform, Ford updated the original Focus in 2004. But it chose to keep the old Focus for the American market, introducing the new platform only in Europe and eventually just about everywhere but the United States. 
 
One gets the impression that someone wants to prove that Mulally is forceful and understands where Ford has been lacking.
 
But the story is actually quite scary.
 
It suggests that Ford is more desperate than we thought.
 
Now, three years after the new Focus was introduced in Europe, it’s to come here. 
But it won’t be here next year, or the year after, or even the year after that. It will be here no later than 2011.

So, why bother?
 
Ford has consistently claimed that the European Focus was too expensive to produce profitably in the United States. The reports that Ford is reversing course on the European Focus do not specify what has changed Ford’s mind, though it is possible that both changes currency exchange rates between the dollar and the Euro and increasing consumer interest in economical cars resulting from higher gasoline prices may have been the determining factors.
But, why bother?

It will cost Ford money to bring the European Focus to the United States. Europe has a number of regulations different than those of the United States, including different emissions standards. Moreover, Ford has a history of attempting to develop platforms that would sell in both markets, but it has never been successful in doing so. The last time Ford tried was with the Mondeo in the early ‘90’s. 

Ford chose not to bring the second generation Focus to the United States because it had learned a lesson from the Mondeo: the extra cost of developing a platform suitable for both markets is so much greater than developing it for the European market only that the rather slender profit margins in the United States don’t justify the extra cost, particularly when meeting the requirements of the European market damages the chances of selling the product in the United States.

In short, they’re two different markets.

Since the Mondeo, however, Ford has had success with Volvo. Volvos sell in both markets. 

So, it might be possible to, once again, try to develop a car that would work both there and here.

But that wouldn’t be the current European Focus.

The problem with bringing that Focus to the States is that it will be functionally obsolete by 2011.

By 2011, Ford will need to replace the Focus in Europe. In fact, if it waits that long it may never regain the market share it loses by delaying until then.

So why would Ford plan to bring a seven year old design to the United States in 2011?

Two of the possible three answers aren’t very promising. The third answer’s not exactly thrilling, either.

It could be that Ford intends on dumping the old Focus on America, once again, and bringing out a new one for the Continent. If so, the auto market long ago figured out the scam. 

It could be that Ford isn’t planning on bringing out a new Focus anywhere, so it wants to milk as many sales out of the current one as it can, wherever it can. If so, it won’t sell them in either Europe or the United States.
It could be that Ford has a new Focus on the drawing board, for both Europe and the United States, but needs to buy time to bring it to market.

Only the last possibility offers any hope to Ford for this market segment.

By 2010, it is expected that Chevrolet will have some version of the Volt on the market. It may be a lithium ion battery hybrid. It may be a fuel cell powered hybrid. Whatever it is, it will be a fuel efficient car with dramatic styling – which ought to make it much more attractive to buyers than the tepid, “dustbuster” styling of the Prius, even that of the next generation Prius. Unlike Toyota, which styles its cars to look like whatever the Germans are selling, the Volt has aggressive and demanding styling. 

By 2010, Toyota may have a lithium ion battery car on the market. Toyota starts testing them in Japan next month. Toyota has proven its credentials in the economical car market by getting a premium price for the Prius and still placing it in the top ten in sales. Moreover, people are comfortable with the Toyota name. They seem not to break and to retain resale value, all of which makes them such a good deal that Toyota seldom needs to offer incentives on their cars to move them.

So, what is Mullaly thinking?

This is not a market in which a warmed over version of a seven year old car is going to be competitive.

If buying time is what Mullaly has in mind, it’s not going to work.

The competition isn’t waiting.

What do you think?
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1 comments:

tango  (372) posted on 07.26.2007

American manufacturers seem to spend the majority of their time trying to explain the reason they sell crap in the US and inteersting stufgf overseas as "different markets". Garbage. The major differences between European and American tatses is automatics and larger gasoline engines for the US, manuals and diesels for the Euros. With current technology you don’t have to build the car in Europe and export to the west. Tool for both sides of the Atlantic (like VW does) and call it a day. Ford in particular is so lost it isn’t even funny. I’ve given up on that brand and I’m sitting patiently until VW or Renault "merges" with it. Then I hope they hire Bob Lutz or Carlos Ghosn to sort things out.

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