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updated: 7/17/2011 8:26 AM

Ford struggling with image in Germany

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Bloomberg News

BERLIN -- As it seeks to boost its image and prices in Germany, Ford is up against car buyers like Stefanie Weiland.

"Ford's reputation over here is deplorable," said Weiland, 46, a former Ford owner, as she shopped at a Volkswagen showroom in Berlin. "I want a car to still be in good condition, both visually and in technology terms, after 10 years. That's what you get with a VW; these cars are unbreakable."

Ford Chief Executive Officer Alan Mulally is aiming to replicate in Germany what he achieved in the United States: Use fuel economy and technology including voice-activated stereos to command more respect and cash from car buyers. Ford says its retail prices lagged VW by an average of 6.3 percent in the past eight months.

The Dearborn, Mich.-based automaker ranks fifth in sales, with 7.5 percent of the German market, according to J.D. Power & Associates. That's less than half the 20.8 percent for Volkswagen, the automaker founded in 1937 with a name that means the "people's car." Ford also trails Mercedes-Benz, BMW, General Motor's Opel brand and Audi, Volkswagen's premium line.

To take on VW, Ford is promoting its ties to Germany and trying to position itself as a technology leader. This month, it outfitted 1,100 German sales people with iPads loaded with a special Ford sales application that demonstrates fuel-saving technology. It is doubling the size of its stand at the Frankfurt auto show in September, adding a test track and hands- on displays that will make it "an adult science museum," said Jim Farley, Ford global marketing chief.

"We're a discount brand to Volkswagen, the data is pretty clear and compelling," Farley said in an interview. "We feel that the product facts are not in line with the perceptions of our brand."

The automaker ran newspaper ads touting the 40 million vehicles it has built in 80 years of carmaking in Germany. At news conferences at its plants in Cologne, where Ford also has its European headquarters, and Saarlouis, Ford has highlighted that it employs 29,000 Germans and is the largest U.S. investor in the country.

"One of the things we need to do is stop being shy about all of the things we've done in Germany," said Stephen Odell, chief of Ford of Europe. "In Germany, we're possibly considered less German. Maybe that's our fault."

Ford's outsider status is partially to blame for its transaction prices lagging VW in Germany, said Colin Couchman, a European auto analyst for IHS Automotive. German consumers view VW and other indigenous automakers as having better craftsmanship and more high-tech engines and features than Ford.

"The Ford brand is seen as wholly mainstream, whereas VW has a more upscale image," said Couchman, based in London. "Opel is very much seen as a German brand. But Ford is still seen as an American brand."

Ford's model line in Germany ranked near the bottom of a 2010 consumer survey of the most exciting automotive brands conducted by Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch-Gladbach. VW ranked among the top five, Bratzel said.

"For a company that's been active in Germany for 80 years, Ford has an extremely unexciting image," Bratzel said. "People simply don't know their offerings, whereas VW is a household name."

Brandishing its German bona fides may backfire with the country's fiercely nationalistic consumers, said Jeremy Anwyl, an analyst with, based in Santa Monica, Calif.

"Ford has been in Germany for a long time, but if they promote that too much it can seem contrived," Anwyl said. "Audi has an R&D center in California, but how many Americans know that or factor it into their purchase decision?"

Boosting German demand for Ford models will take years of overhauling the product line with new technology and designs, said Jeff Schuster, an analyst with J.D. Power in Troy, Mich.

"This is a long process and takes a significant investment in marketing and product development," Schuster said. Achieving parity with VW will be "a difficult and uphill battle," he said.

Ford's Farley agreed that matching VW's premium prices is "a pretty tall task," while he didn't rule it out.

"German consumers and Volkswagen have a very special connection," Farley said. "It's not our ambition to be a premium to Volkswagen, but in certain segments and on certain vehicles that may happen. Our real key focus is to close the gap."

Prices and profits will grow throughout Europe if Ford can elevate its reputation in Germany, Farley said.

"As goes Germany, so goes the rest of Europe in terms of our image," he said. "So this is really very important for us."