Is Ford Really Going To Cut Its Product Line-Up?

Ford CEO Alan Mullaly recently announced that his company was going to dramatically reduce its product line-up. Bloomberg reported the following: “’There will be less than 30, on our way to 20 to 25,’ Mulally said in response to questions on the future lineup of ‘nameplates’ or models after addressing the Confederation of British Industry in London today. ‘Fewer brands means you can put more focus into improving the quality of engineering.’”

That’s an admittedly small number, far less than a high of around 97 models just a few years ago. I counted them up myself just to double check, but getting to that number meant not only counting Ford-badged vehicles but those from the Mercury, Lincoln, Volvo, Land Rover, Jaguar and Aston Martin brands as well.

So the headline-worthy quote here is really a bit sensational in that Ford has already shed the majority of the models in question. You may recall that Aston Martin was sold in 2007, Jaguar and Land Rover were sold as a package deal in 2008, and Volvo was officially jettisoned just a few months ago. Earlier this summer, Ford announced that it would be discontinuing Mercury as well, after years of lackluster sales.

So, the only brands the Blue Oval will have left for 2011, at least here in the U.S., will be its eponymous marque and Lincoln. Overseas, Ford sells its vehicles under just the Ford label, and the Europeans have quite a few models we don’t see in showrooms here. But here, Ford’s product lineup has become quite concise:

1. Ford Fiesta
2. Ford Focus
3. Ford Fusion and Fusion Hybrid
4. Ford Mustang and Shelby GT500
5. Ford Taurus and Taurus SHO
6. Ford Edge
7. Ford Flex
8. Ford Transit Connect
9. Ford Escape and Escape Hybrid
10. Ford Explorer
11. Ford Expedition
12. Ford Ranger
13. Ford E-Series
14. Ford F-Series (including SVT Raptor)
15. Ford Super Duty
16. Lincoln MKS
17. Lincoln MKT
18. Lincoln MKX
19. Lincoln MKZ
20. Lincoln Navigator

So, if my count is accurate, we are looking at no more than 20 distinct vehicles between the two divisions – and the Ranger is scheduled to disappear after 2011.

It’s really astonishing just how much the company has changed direction in the past three years. Shedding five of seven brands and nearly 75 vehicles is a pretty big deal. In fact, the company is starting to resemble another successful automotive juggernaut, Toyota. Both have bread-and-butter, mass-market vehicle line-ups that extend from small cars to crossovers to people movers to SUV’s and pickups, and both have one luxury division. A pretty good formula, it seems.

While Mullaly likes to talk about how these consolidation moves help Ford’s plans to standardize features and parts to reduce costs and improve quality, there’s another benefit that doesn’t sound nearly as impressive when you’re addressing business groups -- it immediately gives you more money to spend on marketing.

Let’s look at some numbers. Last year, Ford Motor Company (which included Ford, Mercury, Lincoln and Volvo brands at the time) spent $932 million in measured media, of which $750.5 million – roughly 80 percent -- went to the Ford brand, according to Nielsen. (And that number does not include online spending, which we know is significant.) That $932 million was actually down from $945 million the year before, of which only $641 million was spent marketing Ford division cars and trucks, about 68 percent.

Given that Volvo and Mercury were getting at least some percentage of that total marketing spend these past two years, it stands to reason that Ford and Lincoln both will greatly benefit from that boost to their coffers. Last year’s increase in marketing dollars going to the Ford brand, along with a great deal of turmoil among its chief competitors – Toyota with its recall woes, and GM and Chrysler with their bankruptcies -- helped to grow Ford’s market share by over a full point, from 12.7 percent to 13.8 percent. So, say what you will about marketing, but if the product is solid, marketing helps put butts in seats.

In this attention-deficit-disorder world, where consumers have little loyalty and a “what have you done for me lately” mentality, it is essential that car companies not only keep their product fresh, relevant and made with high quality but that they also keep the customer base informed and aware, consistently, not just when they launch new products.

As a former marketer at Ford and DaimlerChrysler, I can tell you that there is nothing quite so frustrating as the “launch ‘em and leave ‘em” strategy that we would inevitably employ when the funds dry up and other vehicles require whatever cash we have on hand. By eliminating so much internal competition for scarce marketing dollars, Ford should have plenty of cash available to keep its remaining models in the limelight.