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Ford Readies for Cash-for-Clunkers Program

The program comes at an opportune time for the auto maker, which is in the midst of launching several key new products, including the ’10 Ford Taurus flagship sedan.

Ford Motor Co. plans on being the de facto source of information for the “cash-for-clunkers” program by conducting ongoing training sessions with its U.S. dealers and preparing a marketing campaign focused on the government-backed initiative, the auto maker’s North American marketing chief says.

“We’re setting out to be go-to experts on the program itself,” John Felice, Ford Div. marketing manager, tells Ward’s. “We’re communicating with our dealers and making sure they’re equipped on details.”

Felice declines to provide details on Ford’s planned marketing initiatives for the program, but says they will be national, regional and local. “The direct-marketing approach is a good approach to identify who’s eligible,” he says.

The bulk of Ford’s cash-for-clunkers marketing efforts will be digital, and the auto maker has diverted marketing funds to bolster its online budget, according to an informed source.

To date, Ford has allocated some 10% of its total planned expenditure to promote the government incentive program, Ward’s has learned.

The program, which last week passed the U.S. Senate and awaits approval by President Obama, is designed for the dual purpose of stimulating vehicle sales and replacing older, less fuel-efficient cars and trucks with newer, cleaner vehicles.

Felice says the program comes at an opportune time for the auto maker, which is in the midst of launching several key new products, including the ’10 Ford Taurus flagship sedan.

“Look at our lineup. The bulk of our vehicles qualify for this program,” he says, noting Ford has more than 20 eligible nameplates.

The $1 billion program calls for credits of up to $4,500 for consumers scrapping vehicles that get 18 mpg (13 L/100 km) for new or used cars that achieve at least 22 mpg (11 L/100 km), or light trucks capable of 18 mpg or more. In addition, replacement vehicles must cost less than $45,000 and the trade-ins must have been insured for the past year.

The Ford Escape and Escape Hybrid cross/utility vehicles qualify for the initiative, as do the Ford Fusion, Fusion Hybrid, Mercury Milan and Milan Hybrid midsize sedans, Felice says.

“(The program) could be a lift not only for the industry, but a lift for us,” Felice says. “It could heighten awareness of our fuel economy.”

Program details have yet to be hammered out but are expected to be finalized within 30 days once the bill is signed by Obama, Felice says. Sen. Debbie Stabenow (D-MI) says the program will start at the beginning of August.

Ford has been “very active” in working with the government on crafting the rules of the bill since it was initially proposed, Felice says. “We don’t want to take all the credit, but we were very active bringing it to fruition.”

Felice is confident the program will be successful, as similar schemes in European countries have stimulated vehicle sales.

“I just returned from Europe last weekend where I met with colleagues from Ford of Europe and heard their lessons on scrappage in Europe, Italy and Great Britain,” he says.

According to industry trade group Alliance for Automobile Manufacturers, countries that have implemented such programs have experienced dramatic results. In Germany, sales jumped 21% in the first month following implementation of a fleet-modernization program in January, while U.S. deliveries tumbled 41% in the same period.

Felice admits the program may not create a similarly large impact in the U.S.

“Will it be the same magnitude as in Europe? Maybe not. But will it be a positive influence? Yes, it will be,” he says. “We’re communicating on how to get ready (for the initiative) and activity should begin in full force over the next 30 days.”

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TAGS: Vehicles
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