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Ford explores new routes for reaching buyers
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Written by The Dallas Morning News   
Saturday, 29 August 2009
Six months ago, when Nicolas Garcia began his search for a new cargo van, he had never even heard of something called a Ford Transit Connect.

Garcia, who co-owns Electro Plate Circuitry in Carrollton, stumbled across the 2010 Transit as he slogged through Web sites, and last month he became the first buyer of a Transit Connect in the U.S.

Guys like Garcia fascinate Jim Farley, Ford's group vice president of global marketing.

In an era of gargantuan $500 million ad campaigns, Farley is using every blog, Internet site and chat room available to attract buyers for some of Ford's more unusual new vehicles – and lots of other venues as well.

"The new marketing is different than the large-market advertising we all used to follow, where a dealer would just put a big Ford banner in the stands at a football stadium," said Farley, 47, a highly regarded marketing whiz who was formerly a fast-rising exec at Toyota.

"That won't reach all the people we need to reach."

Young millennials, who rival the baby boomer generation in size, are becoming the nation's primary consumer group as boomers enter their retirement years.

Years ago, clothing retailers and beverage companies began focusing their "alt-ads" on millennials. Now the auto industry is following.

"Millennials are moving from beverage and apparel to homes, cars – the big stuff," Farley said. "They have moved through those businesses and changed winners and losers. In our industry, they also will define winners and losers."

Ford, whose sales were up 1.5 percent last month in a tough market, is introducing several vehicles over the next few months that don't even vaguely resemble the big trucks for which Ford is famous.

And the company really needs them to succeed. Unlike Chrysler LLC and General Motors Corp., Ford Motor Co. did not ask for any loans from the U.S. government, nor did it seek bankruptcy protection – a fact that seems to have earned the company some goodwill with consumers.

Instead, Ford took $23.5 billion in loans shortly before the economy collapsed, mortgaging practically everything it owns so it could restructure and survive. Though that debt could be a major burden in the years ahead, the loans allowed Ford to continue developing cars and trucks in one of the worst environments in auto industry history.

"Product success will repay that debt," said Jessica Caldwell, industry analyst at Edmunds.com. "And Ford, for now, has momentum."

The automaker will continue to use television and print media for mainstream vehicles such as the F-150 pickup and Mustang, Farley said. But it needs to mine unconventional venues to reach consumers like Garcia who are outside Ford's traditional sphere.

Much is at stake. Over the next two or three years, the automaker has a unique opportunity to substantially increase its market share while GM and Chrysler struggle – and become the dominant domestic. Ford is currently the No. 3 automaker in the U.S., behind GM and Toyota.

"They are going to have one of the best market shares in the U.S.," predicted John Wolkonowicz, an auto analyst at IHS Global Insight in Massachusetts. "Over the next decade, we will probably see Ford and Toyota duking it out for the top spot in the industry."

More than Mustangs

But to get there, Ford must convince skeptical consumers that it offers more than hot Mustangs and 5,000-pound pickups and SUVs, Farley acknowledged.

Among the automaker's introductions in the months ahead will be several European-derived small cars such as the 2010 Fiesta and Focus, and an all-new Explorer, a crossover/SUV for 2011. .)

"I think we have a ton of work to do," said Farley, who also oversees Ford's operations in Canada, Mexico and South America. "But if we stay committed for the next five years and don't lose our focus or concentration, we will have market-share power and pricing power we haven't seen since the '80s."

Garcia says he is pleased with the Transit Connect his company pressed into service about six weeks ago. Electro Plate, which employs 75 people and has annual revenue of $10 million, had considered buying two vehicles for deliveries: a fuel-saving four-cylinder car for small items and a full-size van for big items such as the occasional 55-gallon drum.

"With this, I only need one," said Garcia, 51, who founded the company in 1981. "I think they will really do well with this vehicle."

Pricing worries

Pricing may be one of Ford's biggest challenges. The company needs to generate enough revenue to be profitable in spite of its debt, but keep its prices competitive, said Gary Dilts, senior vice president of automotive operations at J.D. Power and Associates.

GM, the automaker's chief domestic competitor, has shed much of its debt and lowered its costs through bankruptcy.

"The question is: Can Ford get there from here?" Dilts said. "They have done a lot of things to fix their internal problems. They have some good new products. I think they might just pull it off."

"Might" isn't good enough for Farley.

"My obligation is to make sure our new products are visible to every customer using whatever means I can find," he said. "I don't want people to discover them a year from now. I want them to know it now."
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