Automotive News - March 31, 2008 - (Page 4)

4 • MARCH 31, 2008 Farley retools Flex marketing strategy Ford claims the Flex is cool — suitable for trendsetters and families Amy Wilson awilson@crain.com DETROIT — Ford Motor Co. will market its new seven-passenger crossover without focusing on one of its biggest potential customer categories: families. The 2009 Ford Flex will go on sale in June, said Kate Pearce, Flex marketing manager. But don’t expect kids and dogs to show up in the advertising, even though the Flex is roomy enough to haul around the paraphernalia of modern-day families. Instead, Ford will try to position the Flex as a trendsetting vehicle for people wanting a stylish ride. The automaker will reach out to urban and suburban consumers alike, even those without children, Pearce said. “There’s much more to this vehicle when you look at it rather than just narrowly defining it as a family crossover,” she said. “It is the style that draws people to this vehicle. Good or bad, it evokes an emotion.” The marketing strategy is a departure from the positioning that Ford initially developed for the Flex. The agent of change? Ford’s new marketing chief, Jim Farley. 2009 Ford Flex Ford marketers don’t worry that the Flex is priced too high because many consumers switching from SUVs to crossovers are actually coming down in price, Pearce said. Minivan stigma The Flex marketing strategy is also part of an effort to escape the perceived minivan stigma. Ford dropped sliding rear doors that initially had been planned for the Flex. Using cheaper conventional rear doors freed up money to improve the interior. That interior, in addition to the Flex’s exterior looks, will be showcased in the advertising campaign, Pearce said. Families will find the car even without overt target marketing, she said. Themes for the commercials aren’t final, but they will come back to potential consumers’ desire to express a personal sense of style. Said Pearce: “You can’t not want to be noticed when you drive down the road in a two-tone vehicle with really cool grooves down the side.” c Farley at work When Farley arrived at Ford last fall, he saw the potential to pitch Flex as a cool vehicle suitable for both trendsetters and families, Pearce said. The Flex team already had been exploring ways to hype the bold look, but Farley’s guidance turned the positioning around. Ford marketers decided not to limit the Flex’s potential by painting it so visibly with the family brush. “So it’s caused us to second-guess and take a second look and kind of widen it up and say, ‘You know what, you don’t have to have a fami- Vehicle type: 6- or 7-passenger crossover Price: Starts at $28,995 On-sale date: June ly to love the car,’ ” Pearce said. Ford expects the Flex to sell well on the West and East coasts, as well as in some major metro areas in the middle of the country. Flex pricing will start at $28,995, including shipping, and will approach the mid-$40,000 range. Ford expects natural customer traffic to come from people who have been driving mid- and full-sized SUVs. Chrysler: Any deal for partner would be done by Cerberus Bradford Wernle bwernle@crain.com Trade marques From December through February, buyers of the 2008 Chevrolet Malibu, shown, were most likely to trade in these brands’ vehicles. Chevrolet: 42.3% Ford: 7.2% Pontiac: 6.6% Buick: 4.2% Toyota: 4.0% Dodge: 3.8% Nissan: 3.0% Chrysler: 2.8% Oldsmobile: 2.8% GMC: 2.3% Source: Power Information Network NEW YORK — If Chrysler LLC gets a global partner, as many experts suggest the company should, the job of handling those talks would be up to Cerberus Capital Management. Chrysler CEO Bob Nardelli said he and his colleagues in the office of the chairman — copresidents Jim Press and Tom LaSorda — are in charge of running the company’s day-to-day operations. Cerberus, the New York private equity firm that owns 80.1 percent of Chrysler, would be the dealmaker. No such talks are going on at present, Nardelli told journalists at the Nardelli: Daily New York auto show this operations month. But Chrysler continues to pursue regional alliances and build regional engineering centers. Those jobs are being handled by the company’s executive team. LaSorda is in charge of setting up regional alliances and building the engineering centers. Chrysler plans to build or expand four regional centers as it tries to boost market share outside North America. Nardelli said the centers will handle design, engineering, distribution and parts sourcing. Regions include Mexico, China, eastern Europe and southern Asia. Chrysler is rapidly building up the engineering centers. The engineering office in Mexico City is now fully staffed with 230 to 250 people, said Frank Klegon, executive vice president for product development. Chrysler also is moving its China engineering office, with a staff of about 50, from Beijing to Shanghai. And Klegon visited eastern Europe in mid-March to scout possible sites in Poland and Romania. The company also is looking at Russia. Klegon declined to say how soon a small car made by Chery Automobile Co. in China might be ready for North America. Chrysler is working on a wide range of products with Chery. Chrysler also has a partnership with Nissan, which will manufacture Versa subcompacts for Chrysler in Latin American markets starting next year. c Malibu attracts import-minded buyers Mary Connelly mconnelly@crain.com DETROIT — As General Motors works to strengthen its position in the U.S. car market, the redesigned Chevrolet Malibu is attracting more cross-shopping with Japanese vehicles, appealing to younger buyers and bringing higher transaction prices than the version it replaced. A year ago, Toyota and Nissan weren’t among the brands that buyers of the Malibu mid-sized sedan were most likely to trade in. Now, they are. From December through February, both Japanese brands were among the 10 most frequently traded by buyers of the 2008 Malibu, according to J.D. Power and Associates’ Power Information Network. “You don’t generally see that with mainline domestic brands,” said Tom Libby, the network’s senior director of industry analysis. “I made a note to myself to watch this.” Chevrolet cites internal data that conclude that the redone Malibu is generating more online cross-shopping with the segment-leading Toyota Camry and Honda Accord. It also is attracting more attention from online shoppers, Chevrolet says. Conquering hero And the Malibu is winning critics’ kudos for its stylish design, said Cheryl Catton, Chevrolet’s general director of car marketing. “One quarter doesn’t tell the story,” Catton told Automotive News. “It has got to keep happening. But early indications show that we are starting to see some significant changes.” Chevrolet began building the 2008 Malibu in October. Catton said Malibu tracking data in the fourth quarter of 2007 compared with the third quarter suggest these trends: Consumer awareness of the Malibu redesign has boosted the car’s reputation for good quality, dependability, engineering and design. “The image of the product is certainly coming up,” Catton said. The Malibu has notched “significant” growth in shopping at such third-party Web sites as KBB.com and Edmunds.com. Chevrolet has charted “a steady increase” in online cross-shopping among the Camry, Accord and Malibu. “It continues to go up every month,” said Catton, who declined to provide specific figures. Malibu conquest sales in the import-saturated markets of Florida and California are rising. Catton called these markets “important for the growth of our brand.” Power data show that from December through February of this year, 4 percent of 2008 Malibu trade-ins were Toyotas and 3 percent Nissans, Libby said. Those percentages are “noteworthy” and bear watching, he said. During the same period, Chevrolet cars and trucks accounted for about 42 percent of Malibu trade-ins. That high figure is typical for a vehicle launch, Libby said, because brand loyalists tend to wait for a new product. “That has to flush itself out of the system,” he said. “Then we will see a more normal level.” The average transaction price for the 2008 Malibu was $22,233 in the three months ending Feb. 29, Power says. In the year-ago period, the comparable price for the 2007 Malibu was $17,577. During the Power study period, Libby said, the average age of Malibu buyers dropped to 49 from 53 a year earlier. ‘A little bit of everything’ Ron Hogg, general manager of Tom Bell Chevrolet in Redlands, Calif., said he sold 15 2008 Malibus in January and February, compared with 23 Malibus in all of 2007. “The trades vary,” Hogg said. “It is a little bit of everything. But I am getting conquests, and I got one Toyota trade-in. Everybody really loves the styling.” Hogg said his daughter is driving a new Malibu. “She would never drive the old one,” he said. “She always drove a Tahoe.” Mike Futrell, general manager of Champion Chevrolet in Tallahassee, Fla., said limited availability of the 2008 Malibu initially constrained sales. But he said more of the cars are arriving at his dealership. “There won’t be any comparison to the volume of the former body style,” Futrell said. “People love the overall design of the vehicle. They think it looks European.” In January and February, Malibu sales rose 29.1 percent over the year-ago period to 27,001 units. That total includes leftover 2007 models. Chevrolet’s Catton said the Malibu redesign aims to overcome what she called American consumers’ bias against domestic-brand cars. Said Catton: “We knew we had to debunk the skepticism about not just Malibu but domestics in general.” c http://KBB.com http://Edmunds.com

Table of Contents Feed for the Digital Edition of Automotive News - March 31, 2008

Axle strike leads GM to alter production plan Industry expert Ferron joins Automotive News Group Hummer adds E85 models Lear expands in China Ford spills the beans on car seats Concern ... confidence ... curiosity — welcome to America, Tata Expect most Ford-bred executives to stay put Tip for Tata: Let British brands be British brands Dana CEO sees need for growth in Asia Chrysler: Any deal for partner would be done by Cerberus Farley retools Flex marketing strategy Malibu attracts import-minded buyers European purchasing execs to suppliers: Costs must fall Reynolds removes dealership modems New Saturn ads will promote Aura, Vue, Outlook This Spring Hill launch is a fraction of the first one GM works on small global car Hal Riney, Saturn campaign creator, dies Dealer sours on China importer Secret computer lets Nissan planner peek into future XM-Sirius merger: Lower prices, more choices? Key Chrysler product developer resigns Ford's new boss in HR plans no major changes Wagener to replace Pfeiffer as Mercedes design chief It's time to break the glass ceiling Autos don't cause all global warming Toyota plumbed the depths of Scion Customer loyalty is serious business Future bright for Tata brands Dauch sends wrong signals as Axle strike drags Yanase opened Japan to Western cars Fewer dealers, sure, but more brands What if Ahn falls short? Want to inspire Lori Queen? Just say no Hanwha to build GM Powertrain assembly line Toyota enters untapped Korea, home of Hyundai James O'Rourke Jr. Picture This -- March 31st, 2008 Lexus pays dealers for innovations Suppliers to the 2009 Dodge Journey Ricardo center has battery focus Howa USA opens interior parts plant in Kentucky N.Y. show suggests a future of smart powertrains, muscle BMW sees new models as sales saviors Ford contract has unique take on core jobs 6 more PACE-setters in auto innovation Buy-here, pay-here may grow Dealers Mercedes SL: A fresh face — with 1 flaw Ex-Chrysler design chief John Herlitz dead at 65 Future could be bright for Jag, Land Rover Land Rover in good shape, but challenges remain Fuel economy fines loom for Tata As segment shrinks, Chrysler minivan output takes a big dip Mercedes names 27 AMG dealers Continental to cut jobs Cobalt SS price: $22,995 Kia opens Ga. training center Nissan idles Mexico plant Plastech legal bill: $1 million for a month Magna will add 3 plants in Mexico El Camino diehards say Pontiac G8 should have been a Chevy No 2nd chance for Nasser, other Ford alums Buick grabs a name from the past After short list, a short stay for Laymon Lori Queen or Ellery Queen? Daimler's mum on BMW Southern supplier strategy Tracing the Camaro's bloodline Alfa searches for a U.S. factory

Automotive News - March 31, 2008

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