thanks

Bogs

Instead of spending money bringing the Mondeo to the States, Ford thought it would be a good idea to discontinue the Tauras (a best seller a few years ago) and then rename the Five Hundred with the Tauras name. I think the Ford executives are trying to kill the company on purpose. Nothing else explains their actions.

I don’t understand why Ford can’t send a car that’s clearly a stellar exception to its lackluster fleet state-side since all we want is a nice mid-size sedan that handles terrifically at an attractive price. This car looks like it could be the ticket.

Ford keeps reinventing the Taurus, it also has the 500 and the Fusion – cars you never actually see on the road. People don’t want a Taurus anymore! If Ford wants to compete with the much more attractive in every way European and Japanese sedans, why not send over a car that already has established itself as a winner? This is exactly what US mid-size car customers want.

http://www.businessweek.com/ap/financialnews/D8UFP5A80.htm

My question is, why instead of wasting money on the re-design they don’t use that money to bring whatever they need to bring to build the Mondeo we all fell in love with in the 007 movie here in the usa?? I just don’t get it. And also, regardind euro design in the usa….. Audi, Bmw, Volvo, and VW are doing good here no? And they look very euro to me..
Im not a big ford fan, but my eyes are insulted when I have to see some of the models that we got here in the us on the streets.

Toyota has its eyes set after F series truck. Ford should take on Toyota bread and butter ‘Corolla and Camry’, however Ford cars are not visually appealing – they almost look like an egg too much rounding up.

Another reason there is no Ford model that stays for long. How old is Corolla and Camry? they never kill those models.

People prefer the devil they know than the person they do not know – except for Mustang, Ford has nothing that is 40 years old car like Corolla and Camry, they have many numerous models that came and went.

Ford should make the car to look like BMW body wise it should be appealing in the looks – Camry and Corolla are good looking and they are reliable, Ford can do it, for some reason they have done nothing and that is annoying me.

Back to Euro-pricing vs USA-pricing. So look up the price of some car we have here in the USA and see what it costs in another country that also has the Mondeo. In my 2 min look Ford did offer those prices as quickly as Honda did on the Accord. Anyhow I think that would yield a more realistic idea of pricing. If that Accord is 30% more in the foreign markets then take 30% off of the Mondeo prices in those same markets. We could take more money off of the price if we removed any taxes that we wouldn’t be paying here in the states. The price could be further reduced if the Mondeo was built in the USA with parts made in the USA (or likely Mexico or China like everything else these days). Anyhow – make those parts to the world design – i.e. the same as the Euro parts except where laws require them to be different.

That brings up another point I want to make – why aren’t the big domestic car makers trying to unify the pollution and safety standards of Europe and the USA (best of both basically) so they can certify cars for sale here and there and save ALOT of development costs???

Though I know several folks have mentioned a “not made here” mentality at the domestic car makers – they ought to wake up and truly join this global market that they so quickly mention in their marketing.

Honda, Toyota, VW, etc etc sell basically the same vehicles around the globe. Why not Ford and GM?

The other players sell basically one axle design around the world, they sell basically the same engine around the world, the same seats, the same fenders, etc.

Why NOT spread the development cost across Europe, Asia and the Americas vs making unique vehicles for North America? Then they contract suppliers around the world to build them parts. Maybe they one one supplier for all the seats sent to factories around the world, maybe they use a North American supplier for our factories, a European supplier for their factories there.

Then they have Ford selling the same old bloated overweight stuff that some people here in America like to buy and Mercury could sell the import-ish vehicles sold around the world. Someone mentioned canabilizing their own sales but what’s wrong with selling ALOT of cars that the world wants with real style and variety and recapturing market share? I mean if Mercury was REALLY different than Ford then those divisions would be selling to different customers anyhow. An Accord driver wanting another Accord style sedan is not going to be stealing sales from Mustangs or big trucks.

Oh and while we’re on it, combine all FOMOCO dealers into one – no more separate dealers for the different divisions – otherwise we get back to more rebadging schemes where one division worries that they don’t have a popular seller like the other division.

Sajeev Mehta :

NetGenHoon: but is the Mondeo really a domestic car?

If Toyota and Honda having plants in the states doesn’t buy them domestic status, I don’t see why Ford having a plant in Europe loses it for them. At least in the eyes of anyone who believes TTAC is anti-domestic.

GM can sell the Astra here as a Saturn because it has the extra capacity in Europe. But note that, in Europe, GM’s operations have not been as healthy as those of Ford. Hence, the extra capacity.

Ford has a good thing in the Fusion, and now it needs to apply the Toyota/Honda approach of continuous improvement to the car.

Er, no I’m not. PPP is used as a measure of relative purchasing power, i.e. the ability of consumers in Country X to buy goods in comparison to consumers in Country Y.

PPP is not a measure if what a consumer is willing to pay for a product, just his ability to pay for it. In this context, you are confusing the price of a Big Mac with demand for a Big Mac. Demand for a Big Mac (or a car or anything else) is not just a function of its price.

This website has covered the Ford branding problem enough for all of us to know that it carries more taint in the US than it does in Europe, which has a corrosive effect on its US pricing of passenger cars. Americans may have more buying power, as measured by per capita PPP, but they won’t use it to buy $30,000 sedans from Ford when there are cheaper alternatives that they prefer.

As for PPP in the context of production costs, you’ve managed to jumble up your concepts. The Economist uses the “Big Mac Index” as an illustrator of PPP because most of a given country’s Big Mac production utilizes commodities sourced from its host country, so it is possible to use it as a representative basket of cost differences. If Big Macs were exported, then it would not be a useful measure of PPP for those in the countries that import them.

So you can’t use PPP to defend your argument. All things being equal, Ford’s costs of building a car in Germany are the same, no matter who buys it. The issues at that point are the marginal costs of exporting it (transportation, complying with the importing country’s regulations, tariffs, etc.) and what consumers in that other country are willing to pay for it.

I think we’ve clearly established that Americans just won’t pay the same amount of euros for a mid-sized mass market sedan as would a European — cars are much cheaper in the US, even before tax — so Ford would lose margin on every US sale. If they lose too much margin, they won’t earn money at all on those US sales.

(Americans would pay more for a premium sedan from a premium automaker, but Ford is considered to be anything but a premium automaker in the US.)

The only way to compensate for local costs differences would be to build the Mondeo in a lower-cost labor market such as Mexico, as the author suggests. But again, that doesn’t necessarily mean that anyone in the US would want to buy a Mexican-made Mondeo.

If Ford Europe has excess capacity to make more Mondeos in existing factories with existing tooling and minimal extra payroll then it might well make sense to build some for the US market.

If Ford has an abundance of extra capacity, then that’s not an opportunity, but signs of a management problem. If a company is competently run, it shouldn’t have a lot of unused factory capacity.

This concept you’ve defended here is precisely what has driven Detroit into the ground. Instead of building vehicles with the goal of stimulating and fulfilling demand, Detroit built vehicles to amortize fixed costs over more units, which increased their margins on paper by dumping unwanted product onto the market. That is what produces a dependency on fleet sales and encourages a loss of customer focus.

Instead of trying to foist Mondeos onto the American public, Ford should figure out what Americans want and give it to them, at a price they are willing to pay. If they want to increase their margins, they should do so by making a car that Americans prefer over the alternatives, so that they can charge more for it relative to the competition.

I will say again that you cannot simply translate European prices by way of a currency calculator into US prices. It simply isn’t that simple.

Forget about cars for a moment. If you did that math using the price of a Big Mac in Europe you would notice that a Big Mac sells for about 3.10 Euros. At present exchange rates that implies a US$4.57 price for a Big Mac (not the meal, just the sandwich). But in fact a Big Mac in the US sells for between $3.00 and $3.50.

Professional economists differentiate between purchasing power currency comparisons and financial market currency conversions. Arm chair analysts often miss this important distinction. PCH101 is making this mistake.

In order to make the argument that a Mondeo would be too costly to be competitive if made and sold in the US you have to look at the purchasing power equivalency, not the financial markets exchange rate. The only time the exchange rate argument is relevant is when the question of importing a European vehicle into the US is on the table.

Even with the importation question there are fixed vs. variable cost questions to consider. If Ford Europe has excess capacity to make more Mondeos in existing factories with existing tooling and minimal extra payroll then it might well make sense to build some for the US market. A factory running at 99% of 3 shift capacity is vastly more productive than is one running at any fraction thereof.

and this one
http://www.autoblog.com/2007/01/29/ford-may-bring-mondeo-s-max-to-u-s/

I think your points have nailed it. Even if Ford brought/built the car here, it wouldnt have a 140hp diesel and six-speed manual that many on this list would want, but a big V-6 and automatic, just like the volume-selling US Camcords. In the end, I would not buy one.

I was the proud owner of a 1980 Fiesta, my first new car. Except for the 1600cc engine, it was not very well adapted to the US market and was far outsold by more expensive and less reliable VW Rabbits, not to mention the also more expensive, but more reliable Civic. Later tries also failed, Merkur, Contour/”Mistake”, Australian Capri, and maybe others I have forgotten.

It is in Europe, where imports are subject to tariffs. It wouldn’t be in the US.

In any case, I think that it needs to be accepted that US tastes and needs differ from those of Europeans.

Europeans like nimble, versatile cars with fuel economy that suits their fuel tax and engine displacement taxes, hence the prevalence of hatchbacks and smaller cars with smaller engines.

Americans prioritize reliability, passenger space, low-end torque and are a bit more skewed toward ride quality over handling, and they associate hatchbacks with cheap student transportation. Fuel taxes are low, and registration fees tend to be ad valorem (based on value), not fuel consumption or engine size. As a result, Americans tend to prefer sedans with motors large enough to give them the low-end torque that they want, matched to automatic transmissions, sold by brands that they associate with reliability. Ford is not one of these brands.

And there are different styling preferences as well. Consumer tastes differ between the markets, that’s just how it is. From a market standpoint, one is not better than the other, just different.

I quite like the Euro Fords myself, and am a bit crestfallen that they can’t succeed here, but past efforts to sell them have all failed. But enthusiasts are a tiny minority of the car buying public, and you can’t play primarily to our sentiments to sell mainstream mid-priced cars.

But I have to ask: which data are you using? EU list prices multiplied by US$?

I have provided evidence that the Mondeo is priced well within the Camry/Accord/Vectra/Sonata cohort. Additionally, I have used quite simple reasoning to argue that according to purchasing price parity, the Mondeo — if built in the Dollar zone — should be competitive. And you just come back and say the Mondeo is too darn expensive. I don’t get it.

Jurisb: ach, the Depression. C’mon, Helicopter Ben won’t let that happen. The monoliners will be bailed out (with taxpayer money). But tell me: what is your opinion on the Mondeo’s exterior and interior? I am unsure about the latter.

The implication of this is that the Mondeo is priced similarly to the Accord. However, in the US, it isn’t.

For what a Briton pays (before tax) for a 2.3 liter four-cylinder Mondeo with a 2.3 liter four-cylinder motor, an American can buy a six-cylinder Accord with best-in-class reliability and a 0-60 time about four seconds quicker than the Mondeo.

Or in the alternative, an American can buy a four-cylinder Accord for about $7k less than the four-cylinder Mondeo, and it will still beat the Mondeo off the line.

Could Ford attempt to sell the Mondeo for the same price as the comparable Accord? Sure, but then, why would it deliberately choose to lose money? It’s already losing enough cash by mistake, there’s no point in making a conscious effort to lose more of it.

Is the Mondeo better than the Fusion? I’m guessing that it probably is. But is it $7-10k better? For most people, it probably isn’t.

Perhaps the car most comparable to the 2.3 liter Mondeo being sold today in the US is the Acura TSX, which is a rebadged Euro-market Honda Accord with the 2.4 liter engine. The TSX comes fully equipped for under $30k and despite the association with Honda, sells in low volumes. If Honda isn’t able to sell a lot of TSX’s, I can’t imagine that a brand-challenged company like Ford could reinvent itself enough to fare any better.

I haven’t driven the Fusion, so joining in on a comparison between the Mondeo and the Fusion is beyond my remit.

But pray tell: is the Fusion desirable? Is it anything near sexy? Is it best-in-class? Has anybody (of repute) said it is better than a Mercedes, at Accord prices?

That is what a mid-size sedan has to be, if it is going to be a winner. Tinkering with the Fusion sounds half-way to me.

Daimler started making cars in the US in 1888. To this day, it is only a niche player in the US market. 120 years later, and it still has only 2% market share in the US.

Toyota entered the US market in 1957. It took Toyota 32 years after that to establish the Lexus brand.

Honda entered the US market in 1969. It took Honda 17 years to establish the Acura brand. And has been reported here, their results with this have been mixed.

Ford does not have 120 years, 32 years or even 17 years to reinvent its brands, it must do much more, much sooner. Mercury and Lincoln have too much taint to be used for reinvented overnight as a seller of Euro-style cars at near-luxury price points. Ford is a mainstream brand, and has little place in its lineup for a costly sedan when the brand lacks the cachet needed to support the price, and when it has a very similar sedan (Fusion) already in its lineup.

If another example of branding constraints is needed, consider the Lincoln LS. If you squinted just right, it almost looked like a 5-series BMW. Which was fine, except that most people who consider BMW’s buy BMW’s (or Mercedes, Lexus, etc.), and almost certainly not Lincolns. So that was a non-starter.

Ford has to work within these constraints. And I see absolutely nothing wrong with improving the Fusion. It generates respectable sales, and has the potential to morph into a bona fide competitor. The last thing Ford needs is an overseas distraction that keeps them from fulfilling the Fusion’s promise, when the potential is within reach.

Audi was mentioned, this should be Fords target to lift it out of the doldrums of red ink good looking car that felt well engineered and had a nice interior that drove well and didn’t break – having a pleasant dealers would be nice too.

A ttac analysis? Is that slang for putting the boot in in an amusing way?

Run this situation through a TTAC-style analysis, and the problems are clear: The brand isn’t up to the job and the price point is wrong.

This website devotes a lot of effort attempting to educate its readership to the importance of branding. Branding is a factor here — the American consumer does not associate the blue oval with desirable European cars that are worth a premium. When Americans think of European sport sedans, they run to the guys with the propeller, three-pointed star, and less often, the four interlocking rings, not to Dearborn. Aside from Volvo, Ford has no brands that can appeal to this market in the US.

The only four-cylinder mainstream cars sold in the US with sticker prices in the $30k range come from SAAB, Audi, Mitsubishi and Subaru. The first two bolt on turbos to those four-bangers; the latter two are limited to high-performance variants sold in low volumes. The US version of the Ford brand can’t play in this sandbox — none of the brands have the cachet or reputation to pull it off.

TTAC often observes (correctly) that Detroit frequently errs by allowing the few decent ideas that it gets to ultimately fail because it fails to evolve them. Here, Ford has the Fusion; if Alan Mulally follows TTAC’s advice, then he would fixate and focus (not Focus) on making the next Fusion better than the last, while capitalizing on its strengths.

And it’s a basic question of economics: There is no good reason for Ford to sell a car in the US at a $10,000 discount when it can sell the same vehicle in Europe for a lot more money. This would be a bit like trading dimes for nickels, particularly when it has a Fusion that is worth improving.