The Future of Ford’s Mid Sized Car Business

One thing I really like about traveling to Europe is looking at the subtle differences between cars that sold in Europe and in the U.S., in addition to checking out the cars that are only sold in Europe. Last time I was there I saw a fairly sporty looking car that I assumed was either a VW or a European brand that isn’t sold here; in the end the make didn’t matter because it was something that I definitely wanted to test drive. As it turns out, the car is produced by a company whose products this happy Audi and BMW driver would never consider: Ford (F).

The car is the new Ford Mondeo, a car designed by Ford Europe and based on a platform designed by Volvo, a platform it doesn’t share with Ford’s Fusion and other mid-sized vehicles for the American market. In fact, both cars were more or less developed independently, with the Mondeo never being designed with the U.S. market in mind. While it would undoubtedly be expensive to modify the car for the U.S. market, those costs are undoubtedly lower than that of separately developing the Fusion on a different platform.

The car has been a top seller in Britain and Germany, and recently won family car of the year from the British TV show “Top Gear”. In fact the car easily competes with cars like the VW Passat and Honda Accord, and is considered a benchmark in its class, something that Ford Midsized cars in America can only dream of. Simply put: Ford of Europe designs Ford’s best car and yet the company made no plans to sell this car in its most important market, during a time when SUV sales were fading the car desperately needs something to compete with the likes of Honda (HMC), Nissan (NSANY) and Toyota (TM).

After all when Car and Driver claims...

The '08 Mondeo drives better than its forebears and we would judge it to be superior to any other front-wheel-drive sedan from a mainstream manufacturer. This is not to say it is a dynamic peer of the heralded BMW 3-series, but the Mondeo largely succeeds at capturing the feel, solidity, and refinement of more expensive luxury sedans.

...it doesn’t take a rocket scientist to figure that Ford of America should scrap its mid-sized car designs and let Ford of Europe do the heavy lifting, whilst the Americans focus on making sure the car meets American specifications with regards to safety, emissions, etc.

A car like the Fusion, especially with its sport and luxury spec versions, is the ideal product for these times, as the higher spec versions could potentially replace some of the higher margin sales Ford loses with the drop in SUV sales. Remember, consumers aren’t trading in SUVs because they’re too expensive; they’re trading them because they’re too expensive to fuel. When it comes to Detroit’s recovery, this is a distinction they would be wise to keep in mind.

I bring all of this up not to join the legions of American Auto Journalists and bloggers opining for Ford to bring the car to America (because, well, I already did that), but to point out a nice little indicator of whether or not Ford is going to wake up when it comes to its next generation of mid-sized cars for the U.S. market (if not in general). The next generation of the Mondeo and the Fusion will be the same car, same platform, and the same “hat” on top, despite the objections of some parties within Ford America who feel that the styling of the Fusion better fits the U.S. market. IF the car is a compromise between a group that can design a great car (Ford Europe) and those that think we Yanks want a stodgy one (Detroit) then Ford is headed in the wrong direction, if instead we get a car that is just an improvement on the current Mondeo with minimal meddling from the Americans then Ford is headed in the right direction.

But don’t take my word for it, just take a look at the two cars and ask yourself: which car most looks like a car that would resonate with American drivers and cause them to abandon their Accords, Altimas, Camrys and Passats?

The Ford Fusion?

Image courtesy of Ford  

Or the Ford Mondeo?

Image courtesy of Business Week

Do I really even need to ask?

Sources:

• Automobilewoche: “Ford wertet Mondeo-Einführung als Erfolg” – June 19, 2007
• Business Week: “NY Auto Show: Of Ford and Top Hats” – David Kiley, March 20, 200.
• Car and Driver: “2008 Ford Mondeo 2.5T – Car News” – Ray Hutton, July 2007.
• ACF Car Finance
• Top Gear

Disclosure: at the time of publishing the author didn’t own a position in any of the companies mentioned in this article.

Comments

[Stephen Metzger]

"Down-styling&quo... the American model is a bit of a tradition. I remember years ago traveling to Europe, seeing a sporty looking car, and to my amazement finding out it was Europe's version of the Escort, the American version of which could only be viewed as pedestrian. Automobiles, by the way, are not the only big ticket items that are biased against the U.S. market. Try kitchen appliances.

[User 216893]

This needs to go to the head of ford and then the head of ford needs to do what he is being paid to do and that is make a decision. If he is worried about stepping on toes then he needs replacement

[rushmore kid]

What is Ford thinking??? They need to introduce an American Mondeo version NOW!!! The Fusion is bland, bland, bland. Why do they think the Cadillac CTS sells way more cars than the MKZ? Styling and more styling even though it pales in comparison to Lexus, BMW, Infiniti et. al. for ride, comfort, value and quality. When will American car makers 'get it'?

[notsosmart]

now how many years has the phrase"when will american car makers get it" been heard?the first thing u.s. manegement should invest in is hearing aids.

[Markham]

Honda has been chasing the Mondeo in Britain for years now, while in the U.S. I doubt Honda is particularly worried about Ford's offerings in the mid-sized car category. The fact that Ford is letting internal politics and misconceptions about the American market prevent them from bringing a car over to the U.S. market that is a legit competitor for the Accord is mind boggling.

To be sure it's probably not just politics and misconceptions that are the problem, it's the fact that Ford is undoubtedly trying to "prove themselves right" and win customers with an "American style Ford". Instead of just going with what the marketplace wants and selling a German style one. A lot of companies in trouble do this, they don't change they just try to improve upon what's not working.

It's probably a mixture of politics, misconceptions and psychology/aversion to real change.

Either way the Mondeo is a sweet looking car.

Thanks for the comments!


-M

[fatcat]

At least they are bringing in the Fiesta soon. Its already a best seller worldwide.

[Jobu37]

The Fusion/Milan/MKZ are some of the oldest models in the mid-size segment and are still selling very well. In December they all get mid-cycle refreshes that include totally new front and rear clips, new interiors, and engine upgrades. Not to mention hybrid offerings based on the 2nd generation hybrid platform that won't have limits as to how many Ford can sale. They will use a battery supplier not controlled by Toyota. The plant that builds these models is running at full-capacity currently. These refreshes are very dramatic and it is becoming obvious that Ford will have to add production at another plant to meet demand. These three cars will build on their already impressive customer base and in 2011-12 when the Mondeo and Fusion platforms merge you may very well see Ford in the mix for the top spot in the mid-size segment. This refresh will help pull even more import buyers back to domestic along with the apparent positive response that the Malibu has received it looks like there may be a four car race for mid-sizd supremacy. You combine the long in the tooth look of the Camry and the cool reception that the new Accord received it appears the gap may close sooner than even my prediction above. Especially if you take into account that both the Fusion and Malibu rank higher than either the Accord or Camry in intial quality.

[Green Penny]

I just returned from 3 weeks in Europe and I was impressed with the vehicles being offered to them. Overall, the styling of the bulk of them is pleasing and the performance of the small engines are impressive. In the back of my mind, I kept thinking "The U.S. automakers must think we are a bunch of jerks and just comtinue to feed us a line that they are doing the best can, and then they sell the cars we are looking for in Europe". A big engine there is 2500cc, with most falling in the range of 2000cc. They climb the mountains well and get great gas mileage.
Five years ago, I rented a car there that was sold here as a small Caddy. I drove it 1100 miles. It had a great ride, lots of room, and I averaged around 38 mpg (on the motorway about 42 mpg). Here, the Caddy version was lucky if it averaged 23 mph.
The U.S. automakers can do better if they want to. Now they may have to.

[User 169775]

Remember that the last old-line Taurus (not the rebadged Five Hundredths) is a curvy soap-bar-shaped car that Mondeo resembles. Anybody can make a soap-bar shaped car.

Styling is subjective. I hate driving soap bars and frankly I'm not impressed by the Mondeo.