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GM, Ford Get More Aggressive

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GM, Ford Get More Aggressive

By TOM KRISHER 06.08.07, 3:48 PM ET

When Ford Motor Co. did research to compare the Fusion mid-sized car with its Japanese competitors, it uncovered something scary.

Although many who drove the Fusion and other cars in hood-to-hood tests liked the Fusion's styling, performance and handling better, they still wouldn't buy one because they had such good experiences with their Honda (nyse: HMC - news - people ) Accords and Toyota (nyse: TM - news - people ) Camrys.

General Motors Corp. (nyse: GM - news - people ) found similar results in its research, showing both automakers that they have a long way to go in cracking the Japanese dominance of the all-important mid-sized car market. Both Ford and GM have responded with far more aggressive advertising and marketing campaigns in an almost desperate attempt to pull import buyers back into their showrooms.

"We've really got to fight hard," Mark LaNeve, GM's vice president of North American sales, service and marketing, said in a recent interview. "If you see a more aggressive tone, we just want to shake people's consciousness a little bit."

Ford launched television, print and Internet ads comparing the Fusion directly with Accord and Camry, and GM's Saturn brand started urging people to rethink their values as well as how they view Saturn and American cars. On Monday, Saturn will post Accords and Camrys at all 435 U.S. dealerships for customers to compare with its new Aura mid-sized sedan.

All of this is designed to change what U.S.-based automakers say is an incorrect perception that they make cars that are inferior to Honda and Toyota.

"We need to earn people's confidence and trust, and we believe we've got the goods to back it up," said Barry Engle, general manager of Ford Division marketing.

Ford and GM have lost a huge portion of their car market share in the past 27 years. In 1980, GM dominated with 46 percent of the U.S. car market, but that has dwindled to 19.2 percent so far this year, according to Autodata Inc. Ford went from 17.3 percent in 1980 to 11.1 percent this year.

During the same time, Toyota more than tripled its U.S. car market share and Honda's share more than doubled, largely by selling Camrys and Accords that have reputations of reliability and quality.

The results went straight to the bottom line. Toyota and Honda recently have made billions of dollars while GM and Ford struggle with losses, especially in North America.

If new ads are going to help reverse the quarter-century trend, Ford and GM must emphasize data showing they've bridged the quality gap with the Japanese, said David Koehler, a clinical marketing professor at the University of Illinois at Chicago.

"It's a desperate time for Ford and GM," Koehler said. "They're begging the consumer to at least try us and consider us."

Georgia State University marketing professor Ken Bernhardt said Saturn's showroom comparison is smart because potential Saturn buyers would be looking at Hondas and Toyotas anyway.

"Looking at yours and the competition simultaneously can prevent someone from going to one of those other dealerships and getting sold," he said.

Previous traditional Ford and GM ads were too subtle to bring about any changes in consumer behavior, according to Koehler.

"They've got to do some drastic measures now," he said.

Ford can tout its recent strong performance in the J.D. Power and Associates initial quality comparisons, Koehler said, and GM is effectively showing its quality by trumpeting its five-year, 100,000-mile powertrain warranty, Bernhardt said.

To go with the car-to-car comparisons, Saturn's "Rethink" television and Internet ads force people to see a different view of status, beauty, power, strength and essentially their value systems, said Jill Lajdziak, Saturn Division general manager.

Viewers then see that Saturn has five new models that aren't just small cars, including hybrid gasoline-electric powered vehicles. At the end, the ad challenges people to "Rethink American."

"In my mind, our campaign goes squarely back to the roots of Saturn," said Lajdziak, whose company was started in 1990 as GM's small-car answer to the Japanese automakers. "You want people to rethink many things in life. We want them to rethink what they think about Saturn."

That's exactly what GM and Ford need to do as they try to regain lost ground, said Bernhardt.

"When there's a perception gap, marketing becomes much more important and has a tougher job," he said. "You have to do something that grabs the attention of the consumer in a highly cluttered environment where it's difficult to do that."

Ford's "Fusion Challenge" ads have helped propel growth in the car's sales (they're up 15.4 percent so far this year to 66,260), but they're still dwarfed by the Camry, which is the largest-selling car in the U.S. with 193,900 sold during the first five months of the year.

But Ford executives realize that the gap took decades to create and won't be made up by ads over the short term.

"You cannot change perceptions or behaviors overnight," said George Pipas, Ford's top sales analyst. "You have to start somewhere in order to crack segments that represent strongholds for other competitors."

Associated Press Writer Jeff Karoub in Detroit contributed to this report.

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Those GM market loss numbers are astounding. Ford has actually done much better in terms of market share retention although their numbers aren't great either. They both squandered market dominance by incompetence, greed and hubris. Now is time to pay the piper.

As I have said on here before, they both need to go for the jugular of Honda and particularly Toyota and they better have the goods to back up what they're saying. They need to convince the incremental buyers they're lucky enough to conquest that they've made a good decision buying domestic. Buying Toyota or Honda is now considered to be the "safe" decision. Nothing will piss off a buyer faster than realizing they made a mistake by taking a chance. They'll never be back.

Edited by ellives

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GM, Ford Get More Aggressive

By TOM KRISHER 06.08.07, 3:48 PM ET

All of this is designed to change what U.S.-based automakers say is an incorrect perception that they make cars that are inferior to Honda and Toyota.

The Nail on the Head

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