Chairman Nick Scheele knows how important the new Mondeo is to Ford Motor Co.'s ailing European operations.
'You'll never cost-cut your way to success,' Scheele told Automotive News International at the Paris auto show. 'The only way you can succeed is to build products people want to buy, and make people want to buy another product from the same stable.'
He hopes the new Mondeo is such a car. The Mondeo, now Ford's largest passenger car, must serve as the automaker's European flagship. Mondeo spearheads what European development chief Martin Leach calls a 'product-led recovery.'
Karl Ludvigsen, chairman of Ludvigsen Associates Ltd., a London industry consultancy, said: 'It really represents the car with which Ford of Europe can make some money. Since Ford of Europe has given up the Scorpio, this is its largest luxury car. Ford has to do its best to eke out high profitability from Mondeo.'
The Mondeo is a conservatively designed car, but a technological tour de force under the skin. It's clearly designed with Germany in mind. Ford's New Edge design takes on a Teutonic look with this car, which contrasted with the curvier, more senusal Renault Laguna at Paris. The two will be rivals.
The Mondeo is larger than the previous model and nearly as large inside as the Scorpio, Ford's former flagship that is no longer available. The Mondeo has firm, Germanic ride and handling. The car probably would be too firm for American roads, but Ford doesn't plan to sell it in North America, anyway.
Given Ford's attention to the German market, it is no surprise that the automaker benchmarked the Volkswagen Passat. While the Passat's build quality leads that market segment, Ford studied other vehicles, too. One was the Peugeot 406, known for its class-leading ride. Ford also studied the diesel powertrains offered in the Laguna, Passat and 406.
With the Mondeo, Ford hopes to radically update its product portfolio, which looked tired. By Scheele's own estimate, Ford's European product lineup is an average 5.4 years old, compared with an industry average of 3.5 years. The new Mondeo is the first item in a product offensive that will bring the average product age down to 2.9 years by 2003. Sluggish product development has left Ford lagging behind its European competitors. At the Paris show, Renault introduced the new Laguna, while Citroen unveiled the C5. Another headliner at Paris was the undisputed king of the segment, the Passat. The German automaker updated the Passat's exterior in a bid to move upmarket. Some critics have noted the similarity between the new Mondeo and Passat.
Next year, Ford plans to sell 290,000 Mondeos in Europe and 350,000 worldwide. The automaker will offer the Mondeo in more than 60 countries, including every region except North America and Antarctica.
Lately, making money has not been Ford of Europe's forte. Last year, Ford earned a skimpy $28 million on European sales of $30 billion. That compares unfavorably with Ford's record $6 billion profit in North America. Worse yet, Ford's European market share has plummeted to 9 percent, down from 11.5 percent in 1995. For the first nine months of 2000, sales of Ford's blue oval brand are off 11.7 percent, the largest drop of any major manufacturer. That kind of performance, in Scheele's admission, is 'totally unacceptable.'
To solve the problem, Ford President Jac Nasser transferred Scheele from Jaguar last year to Ford's European headquarters. Scheele was a logical choice: He had nursed a sick Jaguar back to health. Scheele quickly formed a task force to plot Ford's comeback.
Under Scheele's leadership, Ford of Europe has regained much of the product development autonomy it lost under Ford 2000. The new Mondeo goes on sale this month. Analyst Ludvigsen believes Ford is doing the right thing by not 'getting greedy' on the pricing. 'They need to establish Ford as desirable product with good value for the money proposition,' he said.
Scheele hopes European customers will find a lot to like about the new car and the products soon to follow. He knows Ford has run out of excuses for failure.
'We have an exciting future,' Scheele told a gathering in Paris when introducing the new car. 'I don't believe we have much time to deliver it.'
You can e-mail writer Bradford Wernle at [email protected]