The embattled U.S. car giant has launched the Fiesta in China, a move Ford hopes will significantly raise sales in a critical market and offset severe losses in the U.S. All three of America's top car makers, Ford, General Motors Corp. and Chrysler, are fighting for survival in their home market.
The launch is also a strategic move into new territory--China's small car segment--to take on rival models like the Toyota Yaris, Volkswagen Polo and Honda Civic. The sticker price for a Fiesta ranges from 78,900 to 111,900 RMB ($11,527 to $16,348.18).
The Fiesta was designed and developed in Europe and will go on sale throughout Asia, Europe and South America this year. Next year, it will be introduced in the U.S., where some potential buyers weren't born in 1980, the last year Ford sold a Fiesta car there.
But the new Fiesta was almost tailor-made to succeed in China, the first market globally to sell the four-door sedan model of the Fiesta. The Fiesta launch on March 8, 2009, followed a weekend of dealer events and launch parties in key cities such as Shanghai.
With the global economy tanking, the purchase of big ticket items like cars have stalled everywhere, including China. But small car sales remain a bright spot as drivers scale back in both price and size, a market the sporty, stylish Fiesta fits snugly with its swept-back headlights and a deep grill flanked by fog lights.
It is also an eco-friendly car, emitting less than 100 grams of carbon dioxide per kilometer, a strong selling point as Chinese increasingly opt for environmentally friendly purchases to cut down on the pollution choking nearly every major Chinese city.
In a stroke of good luck for Ford, the Fiesta goes on sale in China just as the government has cut retail taxes on small cars in half, to 5%. The government is also finalizing plans to give subsidies for new car purchases in rural areas as part of its $585 billion economic stimulus plan.
"The timing [of the Fiesta launch] is good for us, especially since the government has just announced a reduction on the purchase tax for small cars. But the time is also right from the customer perspective," Ford's VP-China, Nigel Harris, told AdAgeChina.
Mr. Harris, who is based in Chongqing, is also general manager of the Changan Ford Sales Co., the marketing, sales and service arm of Changan Ford Mazda Automobile Co., a joint venture between Ford and the ChangAn Automobile Group that manufacturers Fiesta cars in China.
Fiesta designed for young adults
The model is aimed at 20-somethings, opening up a new demographic for Ford in China. The company already has two models there aimed at older consumers. The Focus is a mass-market family sedan and the Mondeo appeals to risk-loving entrepreneurs.
In terms of "style, safety, design, features and best of all price, it's almost as if Ford sat down with 25-something-year-old men and women and designed the car around them," said Bryce Whitwam, the general manager for Wunderman in China. The agency handles customer relationship management support for Fiesta, including electronic direct marketing and telemarketing activities.
Most potential Fiesta consumers grew up in single child households and will likely be helped on big purchases such as a car by their parents.
Besides online surfing, women in this demographic spend a lot of time reading fashion magazines, but tend to avoid TV.
"The guys tends to be more business-oriented and driven to succeed. Their goal in life is to make good money, get good career and buy car and apartment. They want to show they are someone of substance to get wife and start a family," Mr. Harris said.
To appeal to a generation that shuns television, Ford launched a six-week marketing campaign this week called "Live bold, live sexy," created by JWT, Shanghai, that reflects the mixture of eastern and western influences on young consumers.
The TV spot departs from typical car advertising in China. Instead of showing lifestyle and car images, it is set in a stylish factory.
In a nod to Tom Cruise's famous suspension scene in Mission: Impossible, factory workers on wires swoop in to assemble the car in a high-tech manner suggesting the car is fashionable and tailor-made for consumers. One worker flips gracefully to attach the wheel, while another kisses the car badge.
Ford's largest digital campaign to date
The commercial's role is just a small part of the launch campaign.
Young adults in China "consume a huge amount of digital media. The amount of time spent online is unbelievable, so this campaign by far has the greatest amount of digital media we've used for a car," Mr. Harris said.
Ford has created a Chinese web site (www.ford-fiesta.com.cn) to provide information about the Fiesta and is running banner, logo and pop-up ad across social networking sites such as Xiaonei.com, Kaixin.com and MSN's IM Robot service.
An online teaser campaign launched on those sites just before Chinese New Year flashed 1.3 billion during the past six weeks. More than 1.2 million people have downloaded the soundtrack from the spot on www.qq.com, Tencent's popular Chinese web portal and the ad has been viewed more than 6.8 million times on Youku.com, a Chinese online video site.
Online activities promoted pre-launch events held in dealerships and trendy venues around the country, Mr. Harris said.
"We needed to link the online media ads back into the physical world, so we spent a lot of time trying to pull people into dealerships, so they can see, feel and touch the car."
The amount of free online coverage has surprised Mr. Harris. Spontaneous video clips captured by consumers at the launch parties have been posted online, generating hundreds of thousands of hits.
China is battleground for automakers
Technically, Ford is relaunching Fiesta in China. An older version of the subcompact--and the first car Ford produced in China--went on sale in January 2003. It was taken off the market a couple of years as part of a global redesign.
When the first Fiesta launched six years ago, China represented a sliver of global car sales. Today, it is a vital battleground for car manufacturers, particularly American companies.
Passenger car sales there, including sport-utility and multipurpose vehicles, rose 24% in February 2009 to 607,300, according to the China Association of Automobile Manufacturers. Sales increased 5.8% to 1.22 million for the first two months of 2009, compared to the same period in 2008.
U.S. auto sales, by comparison, dropped by more than 41% in February to the lowest level in almost three decades. Ford's U.S. sales fell 48% in February, compared to a 53% drop for GM and Chrysler's 44% decline. In January 2009, car sales in China surpassed those in the U.S. for the first time, according to industry estimates.
Chinese consumers are trading down on both price and size from their original purchase decisions and taking longer to purchase than before, Mr. Whitwam said. "Having a sexy car at a lower price bracket will help Ford lift sales in the entry level sector."
Sales in China grew in part because of the government's reduction on tax, and because the week-long lunar new year holiday in late January gave families time to comparison shop for cars.
Last year's lunar new year fell in February, and coincided with massive snowstorms that disrupted business in China, causing a significant slowdown in car sales for several weeks.
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