With news that Ford’s upmarket Vignale line is falling below expectations, are the wheels already coming off the Blue Oval’s last chance saloon?
The key to viability in the European car market is finding ways to encourage customers to pay more. Easier said than done. According to a report last week in Automotive News, a JATO Dynamics analysis states the average UK customer pays £25, 400 for a mainstream brand D-segment car. By contrast, the average spend on a premium branded car of similar size was 36% higher.
What isn’t made clear is whether those differentials are a function of a premium brand’s higher base price, lack of discounting or option takeup, but nevertheless, JATO’s metrics make dispiriting reading for Ford and their ilk; findings showing the combined sales of premium D-segment cars last year outstripped those of the mainstream for the first time. Half year European sales for 2016 bring further gloom; figures for Mondeo to June showing the model is flatlining a mere two years into its life. So has the endgame has begun in earnest?
Having seen their costbase shrink in the aftermath of the PAG firesale, Ford bosses could only watch helplessly as others reaped the dividends owed to them had they not let go of what they thought they knew. Perhaps prudently, Ford have opted not to sell cars under the Lincoln brand on this side of the Atlantic, yet desperately lack an upmarket offering. Hence Vignale.
Launched last year on the Mondeo model, Ford’s marketers anticipated the Vignale line to account for 10% of sales. But Ford’s UK sales head, Kevin Griffin told Automotive News last week that UK sales for the Mondeo Vignale in the year to June are running at between 2 and 3%, a good way short of projections. But is this really a surprise? Frankly the idea that UK customers – perhaps the most brand-aware in (or out of) Europe would rush to buy a ‘brougham-ised’ Mondeo seems a little naive, which is puzzling given that Ford is not a company I’m predisposed to accuse of naivety.
It’s probably a little premature to be writing obituaries just yet, but what we can say without fear of hyperbole is that Vignale hasn’t exactly leaped out of the starting blocks. 10% of sales is a nice aspirational figure to aim for but is likely to be well above Ford’s break-even point for the line. Given how relatively inexpensive the Vignale concept is by comparison to say the Citroën option, even a modest percentage uptake could represent profit worth having.
Griffin says he expects the percentage of Vignale sales to increase as additional models are given the blusher and eyeliner treatment. Already the S-Max Vignale has been launched and we can expect the SUV model lines to follow suit. One thing as yet unclear is how far down the range Vignale can be stretched. The forthcoming 2017 Fiesta is believed to be more upmarket than the outgoing model, but cost implications raises the question of whether the numbers work at this price point. Having said that, a brougham Fiesta would be a rather fine thing.
Back in 2009, Alan Mulally looked like the smartest man on the block having negotiated the sale of Ford’s loss-making prestige marques. Seven years on and the decision doesn’t look anywhere near as clever. But it’s too late for hand-wringing now. Done is done. Ford might as well execute the hell out of this plan because there doesn’t seem to be much in the way of options.
Our American cousins nostalgically refer to the ‘Great Brougham Epoch’ – a period when tinselled (mostly Ford) sedans ruled the turnpikes. For many, these luxury liners represented a final flowering for the US industry before the malaise-era set in. Is Vignale set to be Ford’s upmarket European swansong? It’s looking increasingly likely.