Ford Motor Co. begins a major ad campaign this week to sell tires.
Ford will use TV, radio and print commercials to promote its dealers' first national foray into the tire business.
The tag line will tout Ford, Lincoln and Mercury dealerships as 'America's newest tire store.' A direct-mail campaign also begins this month.
With only a handful of exceptions, Ford, Lincoln and Mercury dealers have not sold replacement tires.
New-car dealers as a group avoid them. Consumers tend to buy from independent tire dealerships, retail stores owned by tire companies and mass merchandisers such as Sears.
Dealers say they find tires cumbersome to stock, and consumers generally prefer discount chains because prices have been lower.
Now Ford has persuaded 2,400 Ford, Lincoln and Mercury dealers who generate 75 percent of the company's annual service volume in the United States to stock, promote and sell tires. In the past 10 months, dealerships have added needed equipment such as alignment racks and promotional banners and displays. Personnel are being trained.
Ford has negotiated contracts with Goodyear, Firestone, Michelin and General Tire that assure competitive retail prices and quick stock delivery, said Carl Bergman, customer service operations manager for the Ford Customer Service Division.
'Dealers can now advertise that they will match anyone's price in the marketplace,' he said.
In 1998, wholesale tire sales in the replacement market totaled 217 million.
Ford wants to sell 1 million tires this year, 3 million in 2000 and 6 million in 2001, he said.
The tire push is part of a wider campaign within Ford to become more customer-oriented and to reach out to consumers in new ways. In addition, warranty revenues have fallen during the last three years, forcing dealerships to seek new sources of service revenue, Bergman said.
Right now, Ford captures an estimated $6 billion annually of the $100 billion U.S. service parts market, excluding labor charges, Bergman said. The company wants to raise its mark to $12 billion in five years, he said.
2 KEY POINTS
'Customers leave us for two reasons: price and convenience,' Bergman said. 'We are focusing on both of those.'
For example, Ford cut prices on 19 common parts, sparking dramatic sales increases, he said. Through the first half of this year, Ford's dealers have recorded sales increases of 46 percent for batteries, 163 percent for alternators, 74 percent for wiper blades and 127 percent for starters compared with the same period a year ago, Bergman said.
'Brakes and tires are the biggest (customer) defection points,' he said. 'Once they leave, they don't come back. Tires are the key to holding the customer.'
The new marketing campaign promotes Ford, Lincoln and Mercury dealerships as 'America's newest tire store.'
One 30-second TV spot, from agency Ogilvy & Mather, uses computer animation to promote tires. A second spot promotes batteries, brakes and shocks. A second wave of advertising is scheduled in October and November.
Dealers will use two direct-mail campaigns to reach 8 million people who own 3-year-old Ford, Lincoln and Mercury vehicles.