GM vs. Ford: It's On, Whether Ford Likes It or Not
Okay, so the proposed tug of war between the Chevrolet Silverado HD and its Ford F-Series rival '” proposed by GM anyway '” is a non-starter for the Blue Oval. Per the company's Tweeted response, 'We typically don't respond to challenges. We let the vehicles speak for themselves.'
(Quick aside: Isn't having a potential battle between these heavy-duty behemoths play out on Twitter a bit like having the Super Bowl devolve into a slap fight?)
Anyways, the point is that Alan Mulally and company may be ducking this challenge, but they better be prepared for a whole lot more of them from General Motors. It's part of a new, much more aggressive way of doing business I've detected at GM, one that starts right at the top with GM's no-longer-interim CEO Ed Whitacre.
I'm not ready to become a card-carrying member of Team Ed yet, but let's take a look at some of what GM has been doing so far under his watch. On the marketing side, the General has increasingly moved away from focusing solely on its own products to calling out those of other OEMs. You've got Howie Long ever-so-subtly equating Honda cars with its lawnmowers, you've got the truck brouhaha with Ford and now you've got the General specifically preying on consumers' (perhaps valid) concerns over Toyota quality by offering incentives aimed directly at current Toyota owners.
And the Toyota situation, which continues to spiral out of control, brings up an interesting scenario on the sales side of things. Call me crazy, but I'm thinking Toyota's not going to have the best sales year in 2010, and this will open up all kinds of opportunities for the other OEMs
Think of it like this: Toyota had about 18.2 percent of the U.S. market last year. This year, if the company's share remains stable, it would be getting 18.2 percent of the pie, but it should be a bigger pie and still net Toyota a sales increase. But I believe that has gone from being the worst-case scenario to about the best the automaker can expect. Prior to its current problems, most analysts, myself included, had anticipated that Toyota actually would grow its share and therefore benefit from both the expanding market and its expanding chunk of that market. Now, as the saying goes, not so much.
Instead, other automakers will get to fight over both customers Toyota will lose from its current market share as well those the automaker hoped to gain from increasing its share.
In fact, if things get bad enough for Toyota, then Ford and GM will find themselves with a surprising amount of breathing room between themselves and the rest of the crowd. Right now, Ford, the No. 3 automaker in the U.S., sells 40 percent more vehicles here than the No. 4 company, Honda. That means if Toyota sales truly fall into a black hole, the landscape of the U.S. auto industry could look like the Big 10 of the 1970s, with GM and Ford playing the roles of Ohio State and the University of MIchigan.
Which, in turn, would shine an awful lot of candlepower on the head-to-head competition between the General and FoMoCo '” and there should be plenty of it.
In the key car segments, it's true the Ford Fusion can outplay the Chevrolet Malibu in the mid-size sedan segment, but '” except for the hybrid business '” the Chevy sedan remains a surprisingly impressive performer, with nice lines and (slightly) better fuel economy than the non-hybrid Ford: The Malibu goes 22/33/26 in the EPA's city/highway/combined ratings, while the Fusion notches 22/31/25.
Working our way down, size-wise, the Blue Oval is getting plenty of hype over the new Ford Focus, but let's remember that General Motors is preparing to launch a strong rival '” the Chevrolet Cruze '” in about the same time frame. And yes, the Ford Fiesta looks like a winner in the subcompact ranks, but so does the upcoming new Chevrolet Aveo. Further, GM also has committed to entering even smaller segments with the Chevy Spark, something for which, as things stand now, Ford won't be able to directly answer.
Although I'll float up a rumor here: Mulally, in discussing the future of Mercury, made some recent comments to the effect that the division would/could be repositioned as a small-car brand for Ford. Does this mean Mercury could serve as a gateway through which to bring the Ford Ka city car '” a potential Spark rival '” to the U.S.?
Cherry-picking at the trucks and crossover segments, I think it's safe to say the Silverado/F-150 competition will stay hot, tug of war or no. But now, Ford is looking to cut into GM's large crossover sales with its all-new Ford Explorer, which will switch to unibody construction for its soon-to-debut 2011 model.
The Chevrolet Traverse, Buick Enclave and GMC Acadia have been seeing good sales but without a lot of direct competition. I mean, on paper, the Ford Flex and Lincoln MKT would seem to offer good alternatives, but I'm thinking their distinctive, untruck-like exteriors, while obviously attracting a fair number of customers, aren't attracting that many from the GM threesome. The Explorer, on the other hand, should get more people who are cross-shopping the Traverse, et al.
The space that Ford most needs to fill, however, is in the mid-size crossover segment. The Blue Oval just doesn't have a good answer for the Chevrolet Equinox, GMC Terrain and Cadillac SRX, with the Ford Escape/Mercury Mariner being smaller and truckier and the Ford Edge/Lincoln MKX at a huge disadvantage at both the gas pump and on the bottom lime. For example, the Equinox, which starts at $22,615, puts up an EPA line of 22/32/26, while the Edge, with a base MSRP of $27,420, only goes 18/25/20.
And this is just the way things stand now. GM is at work fast and furious to catch up to the Fusion hybrid, while Ford is readying an electric Focus with which to compete against the Chevy Volt. The 2011 Ford Kuga will leverage the Blue Oval's global approach against GM's smaller crossovers, while you can be sure the General will use its decision to keep building body-on-frame SUVs '” like the Chevrolet Suburban and GMC Yukon '” as fodder in the Ford vs. GM truck wars.
Who knows, at the rate things are currently going, a Whitacre-Mulally cage match might be next on the agenda.