Ford Motor Co. should shed its Lincoln, Mercury, Land Rover, Mazda and Aston Martin marques and concentrate on Ford, Volvo and Jaguar, says former marketing executive Charles R. Hughes.
However, Hughes, a onetime CEO of Mazda North American Operations and president of Land Rover North America, dismisses the notion domestic auto makers can downsize themselves to prosperity, an ongoing strategy at both Ford and General Motors Corp.
Rather, Hughes says, Ford, and to a lesser extent GM, has to reverse years of what he calls “bad branding” in order to be successful.
Good branding, Hughes contends, “gives you recognition with a certain group of customers.
“Branding is a simple business strategy to set yourself apart in the marketplace,” he tells Ward’s. “Branding is a promise wrapped in an experience. And by promise I mean you have to stand up and make a commitment and stand for something.”
Ford overextended itself when it bought Jaguar, Land Rover and Volvo in the late 1980s and 1990s, Hughes says, making it difficult to concentrate on transforming any one brand into a global powerhouse.
Growing too quickly ultimately led to Ford’s current predicament of declining sales and market share in North America, where key leadership positions have changed hands at a frenetic pace, he says.
That means the solution is to shed brands, Hughes says. “Building one world-class brand is sufficiently difficult, and when you (talk about) GM and Ford, you’re talking brand portfolios.
“For (Ford) to be successful they have to get down to three brands worldwide, and the three brands should be global and have no overlap,” Hughes says. “(Ford) should shut Mercury and Lincoln and sell Aston Martin, Land Rover and Mazda.”
Hughes does leave open the possibility Ford could retain its 33.4% ownership of Mazda, or even purchase the remaining shares, as the Japanese auto maker provides Ford with many of its key vehicle platforms.
However, should it decide to part with Mazda, Hughes says, Toyota Motor Corp. would be eager to take Ford’s place.
“If I were sitting at Toyota, I would be at Ford asking to buy Mazda,” Hughes says. “If you’re playing chess, it’s like taking a pawn away.”
While many pundits say money-losing Jaguar would be the most logical brand for Ford to shed, Hughes says Jaguar remains a valuable brand that has been prevented from realizing its potential by Aston Martin and Land Rover.
“Jaguar has a very bad product lineup,” he says. “They can’t build the best sports cars because that’s Aston Martin’s role, and they can’t do world-class SUVs because that’s what Land Rover does. Having two sister brands is truncating what Jaguar is today.”
By trimming its product portfolio to just Ford, Volvo and Jaguar, Ford would have a chance to consolidate its talent and concentrate on strengthening three brands that have virtually no overlap, says Hughes, about to embark on a tour to promote his new book, “Branding Iron,” coauthored with longtime auto writer and editor William Jeanes.
He points to Toyota, which despite fielding the Lexus and Scion marques, mostly relies on its Toyota brand for strong worldwide growth and revenues.
Toyota’s success can be attributed to a single-minded focus, shared across its entire workforce, Hughes says. “At Toyota, 99% of the people wake up every day to try and make Toyota better. They know what the message is.”
Ford could be one of the strongest nameplates in the industry if it intensified its focus on the blue oval brand, Hughes says.
“Ford should clear the decks and get rid of the brands that get in the way and make cars that everyone wants, more so than Toyota,” Hughes says.
“We’ve seen in their past they’re capable of doing that. There was a confidence of what they were doing, and they need to get back to that. They need everyone in the company to wake up and think about that.”
Suggestions Ford should form a partnership with another auto maker, perhaps the Renault Nissan Alliance, is a “lose-lose” scenario, he says.
“It takes focus and a clear-headed look at the marketplace, and all these arrangements and partnerships take the eye off the ball,” Hughes says. “Look at BMW (AG) and Rover (Cars Ltd.). They spent all their time trying to fix Rover. And DaimlerChrysler (AG), all that effort hurt Mercedes-Benz.
“The companies that are going to win are the ones that look at the marketplace and work hard on revenue and committed brand strategies.”
