Ford Motor will announce that it's renaming the Ford Five Hundred sedan at this week's Chicago Auto Show. As first reported in BusinessWeek.com's Auto Blog on Jan. 4, the 2008 model will be renamed the Taurus.
Ford (F) stopped production on the original Ford Taurus last November. The sedan, at one time the best-selling car in the U.S., had become primarily a rental car for Ford by the end of its production run. The auto maker had two plants dedicated to making the Taurus, giving it far more supply—more than 400,000 cars annually—than the retail market demanded. In the last year, Ford consolidated assembly to one plant before closing production all together a few months ago.
Ford CEO Alan Mulally last December told BusinessWeek that he believed abandoning the Taurus name, which had built up so much recognition and awareness in the marketplace "was an incredible waste of an investment."
What to call its cars has been a vexing problem for Ford, as well as for General Motors (GM) and DaimlerChrysler's (DCX) Chrysler division. All three companies have worked hard the last few years to improve vehicle designs and close the quality gap with Toyota (TM) and Honda (HMC).
In Ford's case, it sold the Lincoln Zephyr sedan for a year, and then decided to rename it MKZ on the belief that its American luxury brand should have alpha-numeric names along the lines of BMW, Mercedes-Benz, Acura, Lexus, and more recently, Cadillac. In GM's case, some executives have expressed marketer's remorse at abandoning names like Deville and Seville for alpha-numerics like CTS, STS, and SRX, which confuse a lot of consumers.
Then there's the question of negative brand legacy. As GM has dramatically improved its Chevrolet Impala and Malibu sedans, there has been much internal discussion about whether consumers will embrace the substantially improved designs since they bear names that are associated with rental-agency cars and past banal designs. Chrysler recently launched a newly designed sedan, the Sebring, after much deliberation inside the company about whether the car should have an all new name. "I think you can revive interest in an old name with an excellent design," says AutoNation CEO Mike Jackson.
In the case of bringing back the Taurus name, Ford has another issue. The Five Hundred sedan has been much criticized for its bulbous exterior design. Even Ford President of the Americas Mark Fields last December called it "the much-derided Five Hundred." Sales of the Five Hundred last year reached just 84,000, down 22% from the year earlier. That's substantially below Ford's sales goal. By the admission of Ford's own managers, the Five Hundred was abandoned, from a marketing standpoint, after its 2004 introduction as 2005 model.
The problem for Ford was that the reviews by most in the auto press were so scathing that the car lost all momentum after its launch. Taking the most heat was the dated exterior design, which many compared to a 1990s Volkswagen Passat, as well as an under-powered engine. Ford solved the engine problem by putting a 3.5 liter V6 engine in the sedan to replace the 3.0 liter engine. The 2008 model will also be updated with Ford's now-signature three-bar front grille.
From Bricks to Mush
Only time will tell if the Taurus name still has some magic in it. "The Taurus was an excellent name when the car launched in the 1980s, and it has great awareness, which is important," says Max Richards, a Seattle-based independent marketing consultant who often helps companies with product naming. "Now, Ford can just worry about advertising the vehicle's benefits without having to pump the market just to recognize a name that has no awareness."
Unlike the Five Hundred, the Taurus' design was considered revolutionary when it launched in mid-1985. Until then, most sedans had been designed like "flying bricks," with sharp corners, for more than 15 years. The Taurus was more aerodynamic, featuring a tear-drop shape with softened edges and corners. The Taurus was given a facelift in 1992, and a total redesign in 1996, which was viewed by consumers and the automotive press as a total failure. The car had been even more severely changed to an ungainly, almost mushy looking, egg shape with even softer edges and corners.
By 1997, it relinquished its top-selling sedan status to Toyota's Camry, and began its steady descent to its position as a mainstay of Hertz lots. (Hertz at the time was owned by Ford, which sold it to investment firms Clayton Dubilier & Rice and the Carlyle Group in late 2005, for $5.6 billion.) Eventually, more than 50% of Taurus sales would be to rental fleets before going 100% rental in the last year.
The move by Ford is a bit reminiscent of Volkswagen's decision last year to rename its new Golf hatchback Rabbit. VW had a famous line of Rabbits in the 1970s. But it abandoned the name after quality problems began eating away at the line's sales and reputation.
VW then called the model Golf, the name under which it was known in the rest of the world, until this recent switch back to the old monicker. VW sold almost 29,000 Golfs and Rabbits last year, an 82% increase. It's hard to tell, though, how much the renaming helped, since the design was brand new to the U.S. last year.
The Five Hundred has been such a debacle, and the sales so disappointing, that turning to a familiar name that once stood for Ford's leadership in the family-car market may strike many as the automotive equivalent of a Hail Mary pass. Still, while it may not be the freshest idea to emerge out of Ford in recent years, the car has been almost invisible in the marketplace. By calling attention to the vehicle, and its new engine, with the Taurus name, it can't help but bring attention to the car and give some journalists and potential buyers a reason to look at it anew.