Ford mpg strategy is at a crossroads
Company loses its bragging rights but sticks with message
Ford Motor Co. plans to retain fuel economy as a pillar of its marketing, but its rollback of mpg numbers on six models this month will force the company to abandon many of the competitive and superlative claims it has made over the past 18 months.
A 90-second Ford commercial during this year's Super Bowl claimed its Fusion Hybrid had "nearly double" the fuel economy of the average vehicle. Now, the Fusion Hybrid's revised 42 mpg combined rating is just 75 percent higher than that of the average car, and less than the Honda Accord Hybrid's 47 mpg.
Ford had touted the Fiesta subcompact powered by the 1-liter, three-cylinder EcoBoost engine as the most-fuel efficient non-hybrid in the U.S. market. The Fiesta SFE's updated rating of 31 mpg city, 43 mpg highway and 36 mpg combined puts it behind the Mitsubishi Mirage.
Even after it corrected the C-Max Hybrid's combined fuel economy rating last year to 43 mpg from 47 mpg, Ford boasted that the C-Max was still ahead of the Toyota Prius V, a key competitor. This month's revision knocks the C-Max to 2 mpg below the Prius V's 42 mpg combined.
Ads for the Lincoln MKZ claimed the car had the best fuel economy of any luxury hybrid in the U.S. market. Now, the hybrid's 38 mpg city, 37 mpg highway and 38 mpg combined rating falls short of the Lexus ES 300h hybrid.
"When you're a product planner, what you dream of are those unique selling propositions that give the marketing team something to talk about," says Larry Dominique, executive vice president of TrueCar and a former vice president of product planning at Nissan North America. The latest revisions will "require Ford to do a major revaluation of its marketing."
Dominique says building a marketing strategy around fuel economy numbers is getting harder as ratings become less of a differentiating factor between competing vehicles. Tougher fuel economy regulations have pushed automakers large and small to invest billions of dollars in transmissions with six or more speeds, continuously variable transmissions, gasoline direct injection and other fuel-saving technologies.
Ford, for its part, was an early adopter of six-speed transmissions and has widely incorporated its EcoBoost family of smaller, turbocharged engines across its lineup.
The result has been a steady gain in fuel economy over the last decade, especially in passenger cars, a category where Japanese companies traditionally led. Ten years ago, Ford's cars had the lowest average fuel economy ratings among the six largest automakers in the U.S. market, with a combined city-highway average rating of 21 mpg, according to EPA data. Toyota and Honda cars averaged 26 mpg combined.
Last year, Ford passenger cars averaged 29 mpg in combined driving -- according to EPA ratings in place at the time -- putting it in fourth place among the six largest automakers and ahead of General Motors and Chrysler. While Ford still lagged Toyota, Honda and Nissan, the gap between Ford's cars and mpg leader Toyota's had narrowed to just 3 mpg.
In 2012, Ford CEO Alan Mulally touted the 2013 Fusion Hybrid’s 47 mpg.
Ford is playing down the impact of the revisions on its marketing. In a statement, Chantel Lenard, general marketing manager for Ford and Lincoln in the U.S. market, said that fuel efficiency is a key part of Ford vehicles' DNA, and the brand's marketing will continue to reflect that by highlighting fuel-saving technologies such as EcoBoost and hybrids, if not the comparative numbers.
"Our vehicles continue to provide excellent fuel economy and we are not going to back away from fuel economy as a message," Lenard said.
Still, the revisions could hamper Ford's ability to compete head-to-head in some segments, particularly hybrids.
According to J.D. Power and Associates, fuel economy was the No. 1 reason that consumers purchased one of Ford's hybrid or plug-in hybrid models last year.
Sales of the C-Max line have cratered since the hybrid model's mpg rating was first reduced last year. C-Max sales this year, including both the conventional and plug-in hybrids, are down 38 percent through May, to 10,510 units. Ford faces the risk of similar drops for its Fusion Hybrid, Fusion Energi plug-in hybrid and Lincoln MKZ hybrid.
The lowered mpg ratings will make it especially tough for Ford to win over customers who are also shopping Toyota's Prius family, the incumbent leader in hybrids.
"If you're winning the battle, that's a feather in your cap," says Dennis Bulgarelli, automotive director at digital marketing analytics firm Millward Brown Digital. "If you're not, it's easy to fall by the wayside because Prius is the one that's on everyone's mind."
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