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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 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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RE: March of progress
By Iaiken on 3/23/2013 11:01:52 AM , Rating: 2
I give it a bunch of peddle, it starts accelerating in the gear I am in, then decided to downshift to the gear I need, then I go faster more better. How long it takes it to figure out what I am doing it dependent on the car but some take several seconds to downshift without manual intervention.

Your argument here is limited to traditional automatics with no gear selection, but in the case of a manumatic or dsg you simply select the gear you want in advance and mash the gas when there is an opening. The industry is trending away from these traditional automatics in favor of systems that allow the user to override.

In the case of Ford, they are moving over to these new electronically actuated manual transmissions dubbed new SelectShift and AutoShift. In the case of SelectShift, you still need to row the gear selector, but it is merely an illusion, the car performs the clutch/throttle play and smoothly shift into the desired gear for you in about 1/100th the time you could do it.

Personally, I won't miss the old cable/linkage system at all, but if I've learned anything in my time as an auto enthusiast is that there are plenty of die-hards out there that will bitch and cry about anything and everything that has changed since the 70's.

RE: March of progress
By Reclaimer77 on 3/23/2013 11:51:53 AM , Rating: 2
What bothers me most about DCT transmissions are the horrible variations in quality of implementation. It seems like half of them on the market have severe problems handling a downshift (we're talking like 3 second delays) or shift too roughly. Some of these problems might not be readily apparent on the test drive either. You're less likely to dog the vehicle when the salesman is sitting next to you.

In the case of Ford, they are moving over to these new electronically actuated manual transmissions dubbed new SelectShift and AutoShift.

Umm except Consumer Reports just nailed Ford for the exact issues I brought up with these transmissions. Especially extremely rough shifts. Most people just aren't going to be okay with that sort of thing.

And this isn't limited by vehicle price. Some very expensive brands have this issue.

Hey I think the technology is great, all I'm saying is get it right.

RE: March of progress
By Iaiken on 3/23/2013 12:51:24 PM , Rating: 2
Umm except Consumer Reports just nailed Ford for the exact issues I brought up with these transmissions.

No, Consumer Reports nailed ford over the PowerShift transmission which is a dual-clutch setup and rightly so. The Focus ST I test drove felt like it was kicking you in the ass every time you shifted up and almost put you into the steering wheel if you downshifted from cruising in 5th to 3rd for passing. I have yet to have a good experience with a DCG and my experiences with computer-controlled manuals has been hit-or-miss.

So far the transmissions I am talking about are only available on the 2013 Mustang, Flex, Taurus and Edge. So far the prevailing criticism of the current SelectShift incarnations is that the +/- rocker switch on the gear selector was entirely unsatisfying/out-of-place and that Ford should have opted for paddles or a manumatic style selector off to the side. Ford has responded by saying that redesigning the steering columns to facilitate paddles or to change the selector boot was prohibitively expensive with the new Mustang so close on the horizon.

For me the 2013 Mustang was a case of "this should have been a hit, but..." especially since the Edge/Taurus actually got paddles.

RE: March of progress
By Spuke on 3/25/2013 2:07:08 PM , Rating: 2
I drove a Focus with the Powershift and it shifted smoothly for me although not near as smooth as the BMW and EVO dual clutch units. BTW, the only US cars with the Powershift tranny are the Focus and Fiesta. Other Ford's have traditional auto's.

RE: March of progress
By Spuke on 3/25/2013 2:11:01 PM , Rating: 1
What bothers me most about DCT transmissions are the horrible variations in quality of implementation.
Different manufacturers, different implementations. Very true! Although have not been really disappointed in any of the implementations, I found BMW's and Mitsu's to be the best one's in my drives. VW's was only a little better than Ford's IMO. Not terrible mind you, just not as good as BMW and Mitsu.

"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher

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