GM, Ford Turn Up The Volume To Market And Advertise Cars

GM, Ford Turn Up The Volume To Market And Advertise Cars http://tinyurl.com/2s2pfa
DETROIT (AP)--When Ford Motor Co. (F) did research to compare the
Fusion mid- sized car with its Japanese competitors, it uncovered something scary.
Although many who drove the Fusion and other cars in hood-to-hood tests liked the Fusion's styling, performance and handling better, they still wouldn't buy one because they had such good experiences with their Honda Accords and Toyota Camrys.
General Motors Corp. (GM) found similar results in its research, showing both automakers that they have a long way to go in cracking the Japanese dominance of the all-important mid-sized car market. Both Ford and GM have responded with far more aggressive advertising and marketing campaigns in an almost desperate attempt to pull import buyers back into their showrooms.
"We've really got to fight hard," Mark LaNeve, GM's vice president of North American sales, service and marketing, said in a recent interview. "If you see a more aggressive tone, we just want to shake people's consciousness a little bit."
Ford launched television, print and Internet ads comparing the Fusion directly with Accord and Camry, and GM's Saturn brand started urging people to rethink their values as well as how they view Saturn and American cars. On Monday, Saturn will post Accords and Camrys at all 435 U.S. dealerships for customers to compare with its new Aura mid-sized sedan.
All of this is designed to change what U.S.-based automakers say is an incorrect perception that they make cars that are inferior to Honda and Toyota.
"We need to earn people's confidence and trust, and we believe we've got the goods to back it up," said Barry Engle, general manager of Ford Division marketing.
Ford and GM have lost a huge portion of their car market share in the past 27 years. In 1980, GM dominated with 46% of the U.S. car market, but that has dwindled to 19.2% so far this year, according to Autodata Inc. Ford went from 17.3% in 1980 to 11.1% this year.
During the same time, Toyota Motor Corp. (TM) more than tripled its U.S. car market share and Honda Motor Co.'s (HMC) share more than doubled, largely by selling Camrys and Accords that have reputations of reliability and quality.
The results went straight to the bottom line. Toyota and Honda recently have made billions of dollars while GM and Ford struggle with losses, especially in North America.
If new ads are going to help reverse the quarter-century trend, Ford and GM must emphasize data showing they've bridged the quality gap with the Japanese, said David Koehler, a clinical marketing professor at the University of Illinois at Chicago.
"It's a desperate time for Ford and GM," Koehler said. "They're begging the consumer to at least try us and consider us."
Georgia State University marketing professor Ken Bernhardt said Saturn's showroom comparison is smart because potential Saturn buyers would be looking at Hondas and Toyotas anyway.
"Looking at yours and the competition simultaneously can prevent someone from going to one of those other dealerships and getting sold," he said.
Previous traditional Ford and GM ads were too subtle to bring about any changes in consumer behavior, according to Koehler.
"They've got to do some drastic measures now," he said.
Ford can tout its recent strong performance in the J.D. Power and Associates initial quality comparisons, Koehler said, and GM is effectively showing its quality by trumpeting its five-year, 100,000-mile powertrain warranty, Bernhardt said.
To go with the car-to-car comparisons, Saturn's "Rethink" television and Internet ads force people to see a different view of status, beauty, power, strength and essentially their value systems, said Jill Lajdziak, Saturn Division general manager.
Viewers then see that Saturn has five new models that aren't just small cars, including hybrid gasoline-electric powered vehicles. At the end, the ad challenges people to "Rethink American."
"In my mind, our campaign goes squarely back to the roots of Saturn," said Lajdziak, whose company was started in 1990 as GM's small-car answer to the Japanese automakers. "You want people to rethink many things in life. We want them to rethink what they think about Saturn."
That's exactly what GM and Ford need to do as they try to regain lost ground, said Bernhardt.
"When there's a perception gap, marketing becomes much more important and has a tougher job," he said. "You have to do something that grabs the attention of the consumer in a highly cluttered environment where it's difficult to do that."
Ford's "Fusion Challenge" ads have helped propel growth in the car's sales ( they're up 15.4% so far this year to 66,260), but they're still dwarfed by the Camry, which is the largest-selling car in the U.S. with 193,900 sold during the first five months of the year.
But Ford executives realize that the gap took decades to create and won't be made up by ads over the short term.
"You cannot change perceptions or behaviors overnight," said George Pipas, Ford's top sales analyst. "You have to start somewhere in order to crack segments that represent strongholds for other competitors."
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Although the market share for GM and Ford are down, it is not as bad as the percentage would make it appear. Based on 46% 0f the 8,000,000 total market on 1980 and their 19.2% of the 16,500,000 market in 2006, GM actually sold around 500,000 MORE vehicles than they sold twenty seven years ago. Ford at 17.2% and 11.1% actually sold around 300,000 more vehicles in 2006 than they did in 1980. Toyota and Honda sold only a few 100K vehicle in 1980, making the growth look better as a percentage.
What's happening today is the market continues to grow but the growth is with six times as many players in 2007 than 1977 and the players are building smaller cars in other countries and in assembling midsize cars in the US for a lot less money compared to GM and Ford. They latest published figures show Toyota an Honda spend $30 an hour less than GM and Ford on labor and benefits.. Even though Toyotas and Hondas sell for at least 20% more than comparable sized and equipped domestics.
No all buyers of those foreign brands are happy with their purchase, as evidenced by all of the Toyotas, Hondas etall one sees today on domestic used cars lots, traded on domestic vehicles.
I just saw a 2007 Corolla sitting on the Lincoln Mercury dealers lot. I ask why and was told the buyer traded a 2004 Taurus on the Corolla to get better fuel mileage. 5,000 miles later they discovered the size, ride, and low power of the Corolla was not worth the few miles more per gallon. After discovering around a $6,000 difference in price between trading the Corolla on a V6 Camry and V6 Milan, the customer bought the Milan.
Part of the trade difference was the Toyota dealer was offering the person $2,200 LESS for the Corolla than did the Mercury dealer. So much for so called great resale prices for a Corolla at the Toyota dealers ;)
mike

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Mike Hunter wrote:

Players in 1997: Ford, GM, Chrysler, DiamlerBenz, Volvo, Jaguar, BMW, VW, Yugo, suzuki, toyota, honda, hyundai, Nissan, Misubishi, Mazda. (some of the other brands, like Kia, Audi and Jeep are actually part of other auto companies). There are also bit players like Aston-Martin (which was part of Ford), Mini Cooper (part of BMW) and RollsRoyce (BMW again), but those are too small to have much market impact.
Those are the same players today, except the number has actually gone down: Jaguar and Volvo are owned by Ford.
So there are fewer players in the US market. But almost all of the foreign players have increased market share.
Total small vehicle sales in 2005 was a little less than in 2004, and sale in 2006 were less than 2005. So vehicle sales are not growing. And vehicle sales for 2006 are down about 1.3% so far this year.

Quality costs money. Can you please back up your claim that Toyota spends $30 less than Ford and GM?

What brand is "etall?" That's a new one to me.
One can be very happy with a car, yet trade it in for another brand car. Or might lease a car for a period of time. Having a car on a lot doesn't mean that the previous owner was unhappy.

Good for him. And other people will prefer the size and ride of the Corolla better than the Taurus. Different people prefer different types of rides.

I don't recall anyone claiming that the Toyota dealers offer a great trade-in price.
Jeff

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Jeff wrote:

the Taurus is a BAD car, looks ugly, the interiors are pathetic. Looks like something designed in the late 80s.
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BlueD wrote:

In your opinion.
There are others who like the Taurus.
Jeff
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Jim Higgins wrote:

what about designing cars that doesn't suck so bad? I just bought a Fusion, but boy, the average American designed car looks like a piece of steaming crap. If you go to the European Ford sites you'll see the Mondeo and the interiors and they're SO different, a completely different category. I don't know what's that about, but American builders seriously need to brush up and start selling nice cars (well equipped and good looking) here in the USA.
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BlueD wrote:

A lot of people would say that the Fusion is ugly.
I am quite impressed with the American cars. The Dodge Avenger, Magnum, Caliper, etc., all look pretty cool to me. The Nitro and some of the Jeeps are also cool. The Caravan looks like its got some great features.
GM has the Korean Aveo which has good mileage, The Coblart, and Malibu. And Ford has the Escape hybrid taxi, Taurus and Edge.
You obviously don't like these vehicles. Other people do. That doesn't make us wrong (or you wrong).
About as many people buy vehicles from the Michigan 3 as from the other makers, meaning that a lot of people must like the vehicles and find the vehicles have appropriate value for the vehicles.
I do wish that Ford word bring the Mondeo back (the Contour is Mondeo-based). But the Michigan 3 do make some pretty nice cars.
This year, the Impala, Cobalt, Focus and Fusion were all in the Top 10 cars sold. So a lot of people do like the vehicles.
Jeff
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BlueD wrote:

I used to own a 1995 Contour. Nice handling, but underpowered for a car its size.
2 engines, either the 4 Cylinder Zetec or the 2.5 Duratec V6.
The Mondeo, it's European cousin, has at least 5 more engine choices, stiffer steering and suspension, and is still made today.
Why is it when they bring designs here they are almost always softening suspensions, steering, and getting them all crappy?
I want a stiff steering. I want decent cornering & drive. I won't mind a stiffer suspension if handling stays the same as European designs.
My current car is a Grand Marquis, and it could use stiffer steering & handling. I'll have to swap sway bars, shocks, and have the steering box adjusted. Could also use 3.55 at the rear instead of the 3.27 it came with.
Couldn't they bring the Australian Falcon here?
Bring back the Mondeo?
Hatchback Focus?
It seems as they don't even want to listen to customers...
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