Still Life Left in Manual Transmission, Ford Says

DEARBORN, MI – Ford officials dismiss reports of younger buyers steering away from manual transmissions, saying the auto maker is seeing an uptick in take rates among Fiesta and Focus buyers.

As a result, expect a heavy marketing play designed to lead millennial buyers into its “hot hatches,” ranging from the top-trim Focus Titanium – which added a manual transmission option last year – to the high-performance ST models.

“Our Fiesta manual mix has been as high as 20% (on a monthly basis),” Amy Marentic, group marketing manager-global small and medium cars, says in answering a query from WardsAuto about the manual trend. “I really think you’re starting to see some of the manual coming back. People are finding it cool again.”

Marentic adds that manual take rates for the Focus range 9%-17% on a monthly basis.

There’s no specific reason why manuals are rising in popularity, she says. The transmissions historically have been more affordable to buyers, but transaction rates are trending upward for Focus and downward for the Fiesta.

Other auto makers have stumbled in maintaining demand for stick shifts. Most notably, Chrysler acknowledged overproduction of manuals in its newly launched Dodge Dart compact, stalling sales last year.

Take rates industrywide for car manuals totaled 11% in the U.S. in the ’12 model year, according to WardsAuto data. Installations on domestic models ran somewhat lower, at 9.5%, while import buyers opted for the self-shifters in 15% of cars.

Ford launches the Fiesta ST later this year and Marentic says the auto maker is not concerned the hatchback, expected to come at a lower price, will steal sales from the Focus ST.

“What I’m trying to crowd into is (the) VW and Subaru and Mitsubishi (market),” she says.

The Focus ST, introduced in North America last year, has been a surprising success for the auto maker, Marentic says. “We expected Focus ST to transact lower than it is, but 70% of people are taking the highest package. We expected 20%, maybe.”

The hot hatches fall into a new marketing initiative announced by Ford this week to court not only millennials but baby boomers as well.

All Focus and Fiesta models, along with the C-Max hybrid, Fusion midsize sedan and Escape cross/utility vehicle are part of what Ford calls its “super segment,” targeting independent twentysomethings and their empty-nester parents.

Over the next decade, Ford predicts millennial buyers will come into their own, starting with a smaller car and moving into a larger CUV or midsize sedan as lifestyles and incomes change. Conversely, baby-boomer drivers no longer in need of large family cars may consider a smaller vehicle.

Ford executives here liken it to the McDonald’s strategy of building business off its popular Big Macs, but also cultivating a customer base with lower-priced and healthier options. While F-150 pickups are Ford’s top seller, marketers and dealers also must pay equal attention to customers for D-segment and smaller vehicles.

“If we don’t crack the code in the area of business that is growing significantly, then we’re going to lose share,” says Erich Merkle, Ford’s top U.S. sales analyst.

Next month, the auto maker launches its “And not Or” campaign, telling buyers they don’t have to sacrifice one technology for another. For example, a driver can have both voice-controlled functions and top fuel efficiency. And as a nod to the rise of the Focus ST, that offshoot will have its own “And not Or” ad.

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