Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Nothing Wrong With The Focus That Better Management Can't Solve

Posted by: David Kiley on June 20, 2006


Two weeks ago, I wrote a piece for the magazine about how Ford has botched the management of the Ford Focus and how it loses big money on each one it sells. What I couldn’t get into in the small space I had was the fact that there isn’t anything wrong with this car in terms of packaging, performance or, it seems these days, quality.

The U.S. Focus, which is a carry-over platform from the 2000 Focus (Europe got the new and even better one, but we didn’t), had higher sales last month as more people are shopping for fuel efficient vehicles. $3.00-plus per gallon gas will do that. Still, Focus has been under-performing the so-called B-car segment for some time. And since Ford decided not to invest in the Focus here in the U.S. to bring it up to the standard of the Euro model, it is stuck selling the car on price, not fashion.

That’s a shame. Since Ford worked to clean up the quality problems that bedeviled the Focus in its first few years, and upgraded the interior and a few bits of the exterior, it is a car that stands up fine to new entries like the Toyota Yaris and Honda Fit. Pricing, which is hard to compare dollar for dollar because of the nature of the retail transaction, is very close. A base model Yaris, which I am driving this week, can be had, says, for $11,830. A comparable Focus ZX3S hatchback, after rebate, can be had for $12,767.

That’s about $1K more, but once you start sliding options around and navigate how badly the dealer is going to try fleece you, I bet the stickers on both look a lot closer than that when comparably equipped.

The point is this: Ford needs to hunker down and start working out the fashion appeal of every new model, and get the alchemy of successful new model launches correct. The newness of the Yaris, is going a long way toward making it look better than the Focus right now, while I think I’d probably opt for the Focus if I was spending my own money.

As Ford is developing three new models under $20,000 (probably under $16,000)for 2008, let me offer this about creating the right alchemy. It goes like this: Let the designers trump the engineers and accountants+ build the vehicle in a place that allows you to make a little profit+plan on spinning variants from the car over the course of four or five years rather than coming out with them all at once at the start+substantially upgrade the platform every four years+freshen the exterior every four years+assign the marketing to an advertising/communications agency that is not necessarily your ad agency of record, but rather the agency with the best read on the vehicle and your brand+spend adequately on compelling and creative advertising over the course of the whole year=a vehicle program you can proud of.

Reader Comments

Joel A

June 21, 2006 11:47 AM

Isn't that what Ford--and even GM--is trying to do? However, analysts are giving the automaker flack for such delays.

phillip hines

June 25, 2006 8:17 AM

Good morning, this is a very interesting article concerning Ford's small car situation. It is amazing when you compare the marketing of this product on the North American Site versus let's say "the U.K.". I personally think the Focus was a better looking car inside and out when it first arrived, but of course the massive recalls diluted any potential valuable of this vehicle. Amazingly enough Ford now decides to have Mazda engineer their small cars. Does anyone remember the Mercury Tracer LTS 1.8 liter powered by Mazda. It was not a perfect car, but it was better than the Ford engineered Focus in North America. I don't remember any major recalls. I had the 1.8 version powered by Ford and it was horrible. Ford consistently markets vehicles and kills them. Toyota has proven more so than anyone you can make money on small cars if you continue to invest in a product over the long term. The Camry platform of course created the Camry, Avalon, Highlander, RX330, and probably more I can't think of. Spreading the cost, increasing the profit, and lowering your risk. I have not seen a small car since the Fiesta and Festiva. Does it cost that much to modify a car to meet American Specs? The Japanese Big 3 are doing it and Ford can't see it. Please educate me on the economics of this process, because I do not have a BA in Business.

Post a comment



Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

BW Mall - Sponsored Links

Buy a link now!