Ford Cuts Renew Debate on Car Quality, Taste
MICHELE NORRIS, Host:
Analysts have said that downsizing alone won't solve Ford's problems. They say the automaker needs to boost sales and revenue by producing a line of products that are in step with consumer demands, which raises the question what do consumers want these days with gas prices still fairly high?
For answers, we turn to Csaba Csere. He's the editor in chief of Car and Driver and Csaba, what's the problem with Ford's current product lineup?
CSABA CSERE: Ford currently has a business model that's simply out of step with reality. For the last 20 years, Ford was making very good money with pickup trucks, vans and SUVs. They comprised about two thirds of the company's sales and probably 100 percent of their profits.
But as gas prices have gone up, that model doesn't work anymore, and the problem is gas prices can skyrocket almost overnight. It takes three or four years to revamp your product line.
NORRIS: So if Ford does need to retool and reposition, what does it need to do to produce cars that consumers really want?
CSERE: Well, part of it is to simply focus more on cars, to put more of their development money on different versions of cars rather than just different versions of trucks. But the other part is to get their costing underway, because right now, Ford actually has a few good cars. The Fusion that was introduced last year is fairly successful, but it's not very profitable. And they have to revamp their business in such a way that they share platforms, they share components and that they can make money on $15,000 and $20,000 cars just as easily as they do it on $30,000 SUVs.
NORRIS: You used a term there that civilians might not be familiar with, share platforms?
CSERE: Yes. The platform is the underpinning of a car and it's the basic, heavy mechanical components, the power train, the suspension, and those are very expensive parts to develop. They're very expensive parts to manufacture.
And what Ford and all car companies are trying to do now is to use the same platform, the same group of these basic mechanical parts on a variety of difference vehicles. Some are cars, some are crossovers, which is what we call car-based SUVs. And the more ways you can share these parts, the more profitable you're likely to be.
NORRIS: Ford's new North American boss says that by 2008, 70 percent of Ford, Lincoln and Mercury cars will be new. That's quite an overhaul. I'm wondering if you've had a chance to look at some of these new cars, if you know what they actually look like?
CSERE: Well I have. In a couple of months, Ford is actually bringing out two very good products - the Ford Edge and the Lincoln MKX, and these are the so-called crossover SUVs. They're mid-sized. They're actually based on car platforms. So they ride pretty well, they get decent fuel economy, but they look like SUVs. They have a lot of room, they're very versatile, they're available with all-wheel drive and these are very appropriate vehicles to today's market.
NORRIS: Csaba, what do consumers want in a vehicle and how has that changed in recent years?
CSERE: Well, certainly consumers today care more about fuel economy than they did two years ago, with the price of gas. They are less likely to purchase an inefficient vehicle just because of fashion or image.
But it isn't just fuel economy. The Honda Insight, the highest fuel economy car in the country, is being discontinued because it's too small and not practical enough for most people. People still want utility, they want space, they want their luxury, they want reliability and safety, and on some level it really helps to be excited by a vehicle.
You look at a car like the Ford Mustang. That vehicle isn't selling because of fuel economy or reliability or safety, it's selling because it's simply cool. And a cool factor works in all product segments.
NORRIS: If you look beyond Ford, what other automakers are producing cars that actually meet that portfolio?
CSERE: If you look at the Nissan lineup today, almost all of their cars have distinctive styling and a lot of performance. If you look at the Toyota lineup, the hybrids actually have a certain cool factor that is above and beyond their fuel economy. It's simply the high tech nature of them, the fact that you're doing something to save the planet, that you're on the cutting edge of technology.
There's a lot of ways that cool factor can be done, but it's very useful to have it because that's what makes people want to buy your car, rather than simply looking for the best discount.
NORRIS: Csaba Csere is the editor in chief of Car and Driver magazine. Thanks so much for talking to us.
CSERE: My pleasure.