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  (Source: Paul Stamatiou)
America's second largest automaker is targeting smaller vehicles, gunning hard for baby boomers and Gen Y buyers

At a press event on Friday, Ford Motor Comp. (F) unveiled its new advertising plan to target 160 million Americans that fall into either the "millennial" (aka "Generation Y"; born in the early 1980s to early 2000s) or "baby-boomer" (born between 1946-1964) generations.

I. Ford Guns for Gen. Y, Plugs Zipcar Partnership

Ford's new campaign will focus on the so-called "super segment" which includes small cars, midsize sedans, and small utility vehicles.  The segment accounted for only 35 percent of Ford sales in 2004, but as customers have moved towards smaller vehicles Ford today sees it account for 50 percent of sales.

The automaker has excelled in recent years, behind only General Motors Comp. (GM) in U.S. sales.  In fact, all of the U.S. automakers have done well -- Chrysler LLC is in third place, while Toyota Motor Comp. (TYO:7203) and Honda Motors Comp., Ltd. (TYO:7267) have fallen behind in U.S. sales.  Strong growth in the super segment has saved Ford, sustaining its U.S. growth, while sales have slumped in Europe.  "Super segment" models include the (re-introduced) Fiesta, Focus, Fusion, and Escape.

The automaker acknowledges that the large millennial generation represents a risk, with more of them living with their parents or having lower incomes, but says it's confident it can appeal to them as they settle down and have children.

Ford's Group Marketing Manager Amy Marentic remarks, "Millennial want a vehicle that looks great, but at the same time are sensitive to things like value, fuel efficiency, technology.  [They're] not going to be brand loyal to what their parent did.... When they drive up to the club they want to look fabulous... Just like their cell phone, just like their shoes... they want their car to make a statement about them."

The company views its partnership with Zipcar Inc. (ZIP) as a crucial piece of effective advertising to Generation Y buyers.  Ford Sales Analyst Eric Merkle says that when Gen. Y buyers graduate from colleges they're used to driving Ford via Zipcars, which mostly are Ford Focuses, with a few Escapes mixed in.  

ZipCar
Zipcar is a key partnership for Ford's Gen. Y appeal. [Image Source: Kelvin Ma/Bloomberg]

He says that some will move to cities -- where more Ford Zipcars await -- while others will opt to move to the suburbs and buy a vehicle for commuting.  He says those buyers are more likely to buy a Ford.

In total, Zipcar's Ford fleet logged 2.2 million driver hours last year, with about 700,000 drivers.

II. Manuals Seeing Strong Sales Among Younger Drivers at Ford

In an interview Eric Merkle was asked about how Ford would react to manual drivership decreasing in younger buyers.  Mr. Merkle disputed that premise stating, "Oh no, [Millennials] do really like to drive manuals.  I really think that you're starting to see the manual starting to come back."

He supports his claim with sales figures.  He says approximately 12 to 23 percent of Ford Fiestas sold per month (as many as 1 out of every 5 sold) and 9 to 17 percent of Focuses sold per month come with manuals.  

Manual Transmission
Around one in five Focus and Fiesta buyers pick manuals some months.
[Image Source: Automobile Magazine]

While he did not cite a breakdown by generation, the Focus and Fiesta are cars that are thought to do quite well with Gen. Y buyers, so his claim may well be accurate.

Ford views its chief competitors in the super segment -- particular in the manual sales -- as Mitsubishi Corp. (TYO:8058), Fuji Heavy Industries Ltd. (TYO:7270) subsidiary Subaru, and Volkswagen AG (ETR:VOW).

III. Ford Blasts Back at Critics of MyFord Touch

Mr. Merkle also commented, "[With Sync/MyFord Touch] we didn't want the vehicle to become the cell phone; we wanted to integrate seamless with the cell phone."

I asked Ms. Marentic about Ford's struggles with harsh criticism from J.D Power and Associates and Consumer Reports regarding its graphically overhauled MyFord Touch infotainment system.

MyFord Touch
MyFord Touch in the F-Series. [Image Source: Jason Mick/DailyTech]

She defended Ford's strategy, acknowledging that much like the smartphone, the system started with some bugs, but has gained from continual patches/improvements.  She also asserted that Ford's customer satisfaction surveys consistently rank vehicles sold with MyFord Touch above those not sold with it.

I asked her why the disconnect then, by Consumer Reports, when they are supposed to predict how consumers will react to a vehicle in terms of satisfaction.  She responded, "That's true.  That sounds like a good question for Consumer Reports."

Responding to my inquiry about whether the criticism would soften amid competitors like GM introducing similar technologies in their vehicles, she predicted it likely would, commenting, "As the first mover you get a lot of love, and you get a lot of criticism.  But everybody's going there [to infotainment].  It is the future."

IV. CAFE Quandaries and Looking Ahead to the 2014 Fiesta Mix

I asked Ms. Marentic if she worried about the demand for smaller vehicles to backfire if it flips in coming decades, as automakers may have grown more complacent with regards to tough CAFE increases, such as President Obama's 54.5 mpg 2025 target.  She said she didn't think so, arguing that Ford is always an industry leader in fuel efficiency.

The advertising campaign will kick off not long before the new 2014 Fiesta ST -- a performance-geared variant of the popular front wheel drive (FWD) subcompact  -- hits dealerships the new Fiesta ST "hot hatch" hatchback will be driven by a 1.6L EcoBoost four-cylinder engine, with 197 hp and 214 lb-ft of torque, feeding into a six-speed manual transmission with overall steering ratio of 13.6:1 and increased roll stiffness at the rear axle.  The hatchback is currently the sales leader in Europe in its segment.  

2014 Ford Fiesta
2014 Ford Fiesta ST

Ford will also introduce a new fuel efficient 1.0L inline 3-cylinder EcoBoost Fiesta later in the fall. The engine block of the I3 is light enough to carry onto an airplane (around 50-60 lb, according to estimates).  

Ford Fiesta
Ford Fiesta's 1.0L engine block takes a trip through airport security as a carry-on.
[Image Source: Ford via AutoBlog]

The petite engine is expected to produce around 123 hp and 148 lb-ft of torque.  It bumps the highway fuel economy to 40 mpg.  The new 2014 Fiesta models pack an improved MyFord Touch screen.

Ford's hybrids (Fusion, C-Max) have been seeing strong sales, although its Focus Electric battery electric vehicle has seen tepid sales, forcing deep discounting.

[A special thanks to web-designer and photographer Paul Stamatiou for the shifter shot.  

Sources: Ford [1], [2]



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longevity
By Randomblame on 3/22/2013 9:49:37 PM , Rating: 2
The best part of a manual is they rarely die sure the clutch needs to be changed and gear oil but that's not much worse than an AT flush filter and pan seal. The clutch tends to take the wear - Ive had 3 ford auto transmissions go out on me and that gets expensive fast. I have a pile of 4 and 5 speed z car transmissions that have been heavily used for 30+ years and they're all perfectly good still. If you want a car to last more than 1-200 thousand miles get a manual




RE: longevity
By PaFromFL on 3/23/2013 9:35:51 AM , Rating: 2
Most modern automatics are very durable and reliable. Fuel mileage goals are driving the industry toward dual clutch automatics with six or more speeds and turbocharged engines with broad torque curves (manuals make more sense for engines with narrow torque curves). At the same time, transmission control software is improving to the point where it outperforms almost all drivers, even in race cars. As an added bonus, transmission control software makes it easy to limit the strain on the engine and transmission, reducing warranty liability.

Manual transmissions were much more effective and fun than the older 3 and 4 speed automatics. Times have changed, and I now get almost as much enjoyment driving modern automatics.


RE: longevity
By chick0n on 3/23/2013 12:04:39 PM , Rating: 1
That's because the Auto maker wants to make MORE money (cuz Automatic Transmission has a really high markup for being "automatic")

There are a lot of rooms for Manual Transmission improvement, problem is there are so many retards out there who weren't supposed to drive wants to drive. and these retards will never be able to use a Manual, so what to do? oh yea, create something that drives(shifts) for these retards and charge them a premium. ooosh !

As for race cars, they are nothing but test beds for the next "Technology", in this case, they want more "Auto Transmission for dummies" so even idiots can drive fast = idiots will buy their higher priced cars.


RE: longevity
By bennyg on 3/25/2013 10:28:17 AM , Rating: 2
erm, possibly because an automatic transmission is a component an order of magnitude more complex than a manual? Have you ever seen an exploded diagram of an autobox? You will understand why repair cost is often more than the cost of a new one on labour alone simply on taking one apart and putting it back together!

I don't understand the "I drive manual I'm superior" line. I can drive manual. I'll most likely get a manual conversion on my 540i when (not if!) the autobox gives out. I bought auto because it have been godknowshowlong and $10k more for a manual version of the car I wanted.

It's a 4L euro V8 with f-tonnes of torque, all the gear changes would just get tiring. They're just unnecessary when I can go everywhere without going over 2000rpm.

I do agree 3 or 4 speed AT suck. The bad rep around ATs must come from the 70s and 80s. Would never buy a car with less than 5 speed. 02 Mazda 323i sits on 2700rpm @ 100kph, noisy, wasteful and highly annoying.


RE: longevity
By lagomorpha on 3/26/2013 11:35:43 AM , Rating: 2
quote>possibly because an automatic transmission is a component an order of magnitude more complex than a manual?

I've rebuilt both and automatics aren't that much more complicated (with the exception of crazy German 7 speed autos that I want nothing to do with).

quote:
I do agree 3 or 4 speed AT suck. The bad rep around ATs must come from the 70s and 80s.
<

In a lot of those 70s and 80s autos the torque converter never even locks so they just slip the whole time they're on the highway :O


RE: longevity
By superflex on 3/26/2013 1:42:50 PM , Rating: 2
Huh,
Audi charges $32,500 for a CVT base A4, $33,400 for a six speed manual, and $34,600 for a 8 speed tiptronic.
$800 is obscene profit? The Audi tiptronic trans is a sealed unit. No maintenance required.
I'll bet you spend $800 on an Audi clutch replacement.


RE: longevity
By superflex on 3/26/2013 2:22:55 PM , Rating: 2
Where's the damn edit button.
$1,200 upgrade to auto.
Still cheaper than a clutch replacement unless they can resurface the flywheel.


RE: longevity
By superflex on 3/26/2013 2:29:40 PM , Rating: 2
$1,400 to upgrade from a 6 speed manual to 7 speed dual clutch on a S4.
I'll bet the DSG shifts quicker and I know it gets better mileage.


RE: longevity
By macca007 on 3/26/2013 2:39:45 AM , Rating: 2
Spot on well said, A lot out there think they are THE DRIVER, Times have changed though autos are pretty damn good now especially on the higher end models, not the budget econo boxes, Everything is computerised and can out do any average joe in fuel savings from changing gears, hell some cars now with the V8's even have cylinder deactivation and can run on 4 to save a bit on the juice when idling or low speed driving!


RE: longevity
By elleehswon on 3/23/2013 9:54:40 AM , Rating: 2
of note, regarding clutch wear. that, too is all dependant on how you drive. for example, i have 171K miles on the original clutch on my 98 camaro SS. do i beat the hell out of it? yep, just about daily. why hasn't the clutch worn out yet? well, i only use the clutch going into reverse or 1st(from a stop), or getting out of gear. everything else is match shifted. i know what i'm doing and how the tranny works, so i'm not wearing out syncro's or the clutch, or putting the strain elsewhere.


RE: longevity
By dsquare86 on 3/23/2013 6:33:41 PM , Rating: 2
Last summer the clutch master cylinder went out of my 1991 Talon TSI AWD while leaving my grandmothers funeral about 30 miles from my house. Everyone was asking if I needed a ride. After checking a few things I decided I was going to make the 30 mile journey home with no clutch. My relatives were all mortified as well as my poor wife. But, much to her surprise we all made it home in one piece. She even made the comment, I have never seen someone drive a manual car without a clutch. If the car had an auto in it then we would have been getting a ride home when our slush box gave out.


RE: longevity
By bennyg on 3/25/2013 10:00:47 AM , Rating: 2
TCUs may have a 'failure mode' and put the box in a middle gear. Loads of 90s BMWs with ZF autoboxes were "lifetime ATF fill" - and exhibited failure in this way, called 'limp mode' (the AT stuck itself in 3rd). When the ATF pan was pulled and metal shards found usually the next call was to a scrapper. Yay, cheap parts for the rest of us that service our cars properly :)

The only issue I have with the 5-AT in my car (93 540i) is when it decides to downshift from 2nd to 1st halfway around a corner. Found that out on a wet day on a wide roundabout thankfully.


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