Jim Farley, Ford group vice president of Marketing and Communications, called the second quarter of 2009 "a breakthrough quarter for Ford Motor Company" during remarks he made to reporters and analysts who participated in the automaker's June sales call Wednesday afternoon. He added that the April-May-June period was a time when Ford’s newest products drove consideration to levels "beyond what the company thought was possible." Below are highlights of his presentation.
Brand Perception Improving
We have experienced a significant improvement in the perception of the Ford Brand and our products. We just received our second quarter brand tracking results. The Ford Brand registered all-time highs throughout the Purchase Funnel, which includes Favorable Opinion, Consideration, Shopping, and Intention to Purchase. Since the first of the year, we have seen a 17% improvement in Favorable Opinion of the Ford brand with Consideration up 13 and Shopping up 16%.
The improvement is driven by customer response to our new products. For example, since the launch of the 2010 Fusion and Fusion Hybrid earlier this year, Favorable Opinion and Consideration has shown double-digit improvements. The “lower funnel” improvement has been even more impressive with Intention to Purchase and Shopping up 60% and 125%, respectively.
Richer Product Mix
Customers love our new products and they are equipping their vehicles with levels of content and features that have caught us by surprise. On the new Fusion, for example, 60% of customers choose to buy the Hybrid, SEL, and SES packages. Our stock mix for these three series is 46%. Higher levels of content have contributed to higher transaction prices. Fusion transaction prices are $1,800 higher than the previous model.
Another example is the F-150 SuperCrew cab style, which accounts for 61% of total F-150 sales, compared to a stock mix of 51%. And 31% of customers select the top-of-the line Lariat package, compared to a stock mix of 24%. F-150 transaction prices are $6,000 higher than the previous model.
Bottom line: In the second quarter, Ford average transaction prices increased at a rate more than double the average industry increase.
Improved Residual Value for Customers
Projections show Ford vehicles are holding more value than domestic competitors and closing the gap with key foreign competitors. These improvements are worth hundreds of dollars to our customers when they trade their vehicle, and they are worth hundreds of dollars to the company. This is one of the desired outcomes from the virtuous circle discipline – building products that customers want to buy and then aligning production with demand to reduce costly incentives that destroy brand image and resale value.
Focus on What Customers Want to Buy
Of course, it is good to see the market share gains, but, as I have said before, our Plan is not based on market share gains. Our Plan is to build products that customers want to buy because they have quality, safety, fuel economy and smart technology and value that is second to none in the industry. And you know what? Customers don’t have to wait to have the best the industry has to offer. They can have it now – a very smart purchase at a great value.