New Taurus, New Sable, Old Blueprint

When the Ford Taurus went on sale on Dec. 26, 1985, it heralded the renaissance of Ford Motor Co.--and something of a comeback for U. S. carmaking. Proof that the Dearborn (Mich.) company would no longer be a patsy to imports, the Taurus and its smaller-selling twin, the Mercury Sable, wooed back many foreign-car buyers, led to a major shift toward more aerodynamic car design, and drove Ford past rival General Motors Corp. in profits for four of the past five years. Through July, Taurus has held its place as the No. 2-selling car in the U. S., behind Honda Motor Corp.'s Accord.

On Sept. 4, Ford unveils the first major redesign of the models. The new Taurus and Sable symbolize not only Ford's strengths but also its major weakness: tortoise-like new-product development. Ford spent six years and $600 million updating the car, but the redesign doesn't have much pizzazz, say dealers and others who have seen it. They praise the new car for its sleeker interior, with touches such as a passenger airbag and power-window switches angled and lit for easier use. But external changes are minor, such as slightly different headlights and taillights. The car isn't due for a total revamp until 1995, and dealers fear the design will start to seem stale. Says Fred Ricart of Ricart Ford in Columbus, Ohio: "I've sold six Tauruses to one family. They're really kind of sick of looking at it."

No one is sounding Ford's--or Taurus'--death knell yet. Bold styling isn't always necessary to make a car sell. Ford's Explorer off-road vehicle is hot without price rebates or radical design breakthroughs. Indeed, Ford feared alienating the 1.5 million Taurus owners by changing the car too much. "Our primary marketing thrust is to get Taurus owners into a new Taurus," says Beryl S. Stajich, Taurus' marketing-plans manager. And Ford has new trucks coming out this year to help boost overall sales. It's reworking the F-series pickup, which outsells the Taurus, and the Econoline van.

DOLLAR DRAIN. If Taurus starts looking tired, it may be because Ford didn't reinvest enough of its profits in new-car development. Amid record profits, Ford's automotive capital spending held steady at about 5% of sales for several years after the car was introduced. Rather than spend more on car development, Ford poured money into financial services and defense. In 1989, it plunked down $2.6 billion for Britain's Jaguar.

Meantime, Ford let the Taurus and the compact Tempo, which dates to 1982 and won't be revamped until 1994, grow old. Japanese companies overhaul their designs every four years. In other cases, Ford skimped by linking with rivals. In 1988, the company, which had claimed design leadership with the Taurus, teamed with Nissan Motor Co. to build a minivan--and asked Nissan to design it.

Now, Ford must spend more--just as profits are turning down. In 1990, automotive net fell by 97%, to just $98.7 million. But Ford invested 9% of its $81.8 billion sales in its auto operations. That's more than it spent in 1986 and 1987 combined. As Maryann N. Keller, managing director and automotive analyst at Furman Selz Inc., points out: "If there's nothing in the budget, engineers aren't going to get new cars out the door."

Without a snappier new Taurus, Ford may have a hard time holding on to the gains it made (chart). Taurus pushed Ford's market share in midsize sedans from 14% in 1985 to 38% now, mainly at the expense of GM. Taurus also added nearly $7 billion to Ford's revenues in both 1988 and 1989 and was "terrifically profitable," says Joseph G. Paul, auto analyst at Sanford C. Bernstein & Co.

But now, the car is facing a slew of rivals. Since the model was introduced, the Accord has grown from a compact into a Taurus-like midsize sedan. This fall, Toyota Motor Corp.'s Camry also will become a midsize, and Toyota expects the Camry to knock the Accord from its No. 1 perch. Next year, Chrysler Corp. will unveil a midsize sedan, code-named LH. The LH's "cab-forward" design, which dramatically increases interior space relative to the car's exterior dimensions, could well become the styling theme of the `90s, replacing Taurus' "aero" theme. And in 1993, GM will unveil revamped versions of its midsize Buick Regal, Chevrolet Lumina, Oldsmobile Cutlass Supreme, and Pontiac Grand Prix.

To beat those rivals, the latest Taurus must have plenty of staying power. If it doesn't, the car that led Ford's renaissance could become a symbol of the company's having rested on its laurels.

James B. Treece in Detroit

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