Jim Farley, Ford’s marketing chief have talked about the future of small cars in the U.S.
Ford Grand C-Max
What are the chances of U.S. success for the Grand C-Max small minivan?
The Mazda 5 has proven that such a vehicle could be very interesting for U.S. customers. During the  escalation of fuel prices and also in August with Cash for Clunkers, Mazda sold more than 2000 a month with virtually no marketing. The number two in-source customer base for that vehicle is Ford customers. Given [the 5's] distribution with no marketing, we could easily double that for a Ford with mass-media marketing. The fact of the matter is that we have a glaring hole in our lineup in the U.S: If you want to buy a three-row Ford and you have $25 grand to spend, there’s nothing to buy.
When I was at Toyota, we sold a lot of minivans, but with an Odyssey, or a Sienna, or even the Korean products, a vehicle with leather and a Car DVD player in the back is at 30 grand. Three-row products in the U.S. are very scarce and they’re very expensive. I think if we do a well-executed car like a Mazda 5 that gets great fuel economy—and if fuel goes where we think it will, priced like it was [in 2008], which is a scenario we see over the next five or six years—we think it’s going to be a really wonderful product for us. Plus, there are also all these people in their 30s who are now starting to have kids and they don’t get hung up on all of the classifications that we do.
I think the future of those upper-body variations of C-segment cars is really our future. What we saw in August was that one out of three vehicles sold in the U.S. was a B- or C-segment vehicle. We saw a similar spike in segmentation the previous summer.
Why C-Max instead of the bigger S-Max that’s sold in Europe?
The fact is that C-Max is a vehicle we are engineering now. S-Max is in the market in Europe today, but until we bring the platforms together between Mondeo and Fusion, we really don’t have the ability to globally manufacture the vehicle where we want to. Part of it is an engineering and manufacturing story, but the biggest motivation is the customer base. Toyota was successful in this country because they bet on the C/D segment and on the upper-body variations of that platform—the Highlander and the Camry, Avalon, Lexus ES and RX, all off the same platform. Ford’s bet is different. When the C/D segment took off, gas was $2.00 a gallon, but we think that with gas at $5.00 a gallon, the C-segment is going to be the most interesting for customers in the U.S. We saw two data points that were really encouraging to us and, frankly, we have a competency in doing these vehicles. In the next three years, we are going to launch 10 versions of the Focus [platform]. I feel that 20 years from now, an Accord or Camry will feel like a late-1970s domestic car and our global products coming to the U.S. will feel a lot like Hondas used to be.
Where does the Fiesta fit in and how are you going to position it and price it relative to Focus?
We want to position the Fiesta as a vehicle with a very different character. The basic personality of Fiesta is very different from Focus or Fit or Yaris. It’s not a commodity product, and we’re not trying to please everyone. It’s a product with a design that tells people you don’t want a washing machine.
People in the U.S. are buying much more expensive B, C, and C/D cars. Look at the transaction price over the past five or six years: Civic is a $20,000 car, Fit is a $16,000 or $17,000 car. The Corolla is a $15,000 car and the Camry is a $17,000 or $18,000 car. The reality is that you don’t have to make a car that’s for everyone. Mazda 3 showed that. If you make a car with a strong personality, there will be a group of people who really appreciate it. And if you combine that unique personality with our dynamics, and our design, and our technology, and you offer specification levels that attract buyers from segments above you, there’s a huge number of downtraders in the U.S. There’s a lot of downsizing going on, not just because of the economy but because of a lot of other reasons, one of which is that the products have got a lot better.
Our take? Well, there’s little doubt that gas prices will go up when the world’s economies start recovering from the funny-money-induced meltdown we’ve just experienced, and future CAFE rules will encourage the purchase of smaller vehicles. But betting on C-segment cars in America is definitely risky in the short term.
As for those 10 Focus-based cars, here’s our best guess as to their future identities: Focus sedan, wagon, three- and five-door hatchbacks, and convertible/coupe; Kuga/Escape and Mercury Mariner small SUVs; C-Max and Grand C-Max mini-minivans; and a Lincoln premium small car, perhaps based on the C concept from the ‘09 Detroit show.