DEARBORN -- The resale value of newer Ford Motor Company vehicles rose 23 percent in the past year alone, the result of stronger demand for Ford's new vehicle lineup and improved quality and durability ratings.
At the same time, warranty repair rates on Ford vehicles have declined by an average of more than 40 percent globally in the past three years.
Ford, Lincoln and Mercury vehicles with one to five years on the road are fetching significantly higher resale values at auction in the first quarter of this year compared to the first quarter a year ago. Overall, the resale value of Ford's three brands at auction rose 23 percent from a year ago to outpace the industry, which saw resale values increase by 19 percent, according to the latest National Automobile Dealers Association auction data.
"Wholesale price performance was extremely strong throughout 2009, and during this period Ford, Lincoln and Mercury products matched or exceeded the performance of the overall market," said Tom Webb, chief economist, Manheim Consulting, the world's largest provider of automotive remarketing services. "And, in 2010, Ford products have outperformed the overall market, especially in the increasingly important segments of compact cars, midsize cars and crossover vehicles."
For example, on average, the redesigned 2010 Ford Taurus is selling 50 percent higher at auction than the 2009 Taurus after one year in service. Similarly, the 2010 Ford Fusion V-6 commanded 26 percent more at auction than the 2009 model after one year in service.
"Wholesale used vehicle prices have generally been firming over the last year and a half; however, the price performance of Ford products has generally exceeded that of the market as a whole," said Tom Kontos, executive vice president, Customer Strategies and Analytics, ADESA Analytical Services, which is a used vehicle auction network.
Rising resale values means more money in customers' pockets when it is time to sell or trade in for a new vehicle. Combine these savings with lower repair and maintenance costs and better fuel economy, and the cost to own a Ford product drops dramatically over the life of the vehicle.
Aggressive product refreshenings
Fueling Ford's improved resale value is the company's strong vehicle lineup that includes many new and redesigned cars and trucks. Ford gained market share in the U.S. last year, while improving transaction prices.
Strong retail performance, in both transaction price and sales of a new product, serves as an early indicator of that product's future resale value. When combined with Ford's quality rankings, these factors help Ford vehicles hold their value.
"The positive reception by consumers of our recent product introductions and freshening is reflected in our higher transaction prices and increased market share," said Jim Farley, Ford's group vice president of Global Marketing.
Laser-like Focus on quality
Ford performance in third-party consumer quality rankings has been steadily improving for the past several years. Years of a consistent and disciplined focus on quality is paying off, including a marked decline in warranty repair rates.
Ford has reduced its warranty repair rates on vehicles in their first three months of service by an average of more than 40 percent in every major business region around the world in the past three years.
Ford, Lincoln and Mercury vehicles' initial quality in the U.S. has improved for five straight years. Ford vehicles now have the fewest number of defects of any full-line manufacturer, according to the GQRS study conducted by RDA Group.
For Ford customers, this means fewer trips to the dealership for repairs. This also means savings for Ford as the company has reduced its warranty repair costs by $1 billion in the past three years.
"We are operating with a truly dedicated discipline to quality," said Bennie Fowler, Ford group vice president, Global Quality. "The results are paying off for our customers with fewer trips to the dealership and a higher satisfaction with the Ford, Lincoln or Mercury product they purchase."
As Ford's newest vehicles hit the road, company officials expect resale values to continue to improve and warranty claims to continue to decline.
Ford's commitment to world-class quality and a positive ownership experience extends beyond just preventing things that go wrong. Customer-driven product features, such as fuel economy, craftsmanship, quiet interiors and high-tech in-car communications systems are designed into the vehicle to deliver an exceptional product at an affordable price.
"The difference in Ford's products today is significant," says Farley. "We're proud of the progress we've made. It feels good to be able to deliver great-looking vehicles and industry-leading quality at an affordable price in every sense of the word."