Ford Retools Fleet Emphasizing Fuel Economy

DEARBORN, Mich., July 22, 2009— -- Hoping to meet tougher government fuel efficiency rules and build on its growing momentum in the slumping U.S. auto market, Ford Motor Co. unveiled a global plan to boost fuel efficiency across its entire fleet of vehicles.

The investment in new technologies to improve fuel economy comes as the company tries to distinguish itself from General Motors and Chrysler, and to capitalize on the problems of its two American competitors, which only recently emerged from bankruptcy thanks to taxpayer dollars and government involvement.

At the company's test drive facility on Tuesday, Ford showed reporters its 2010 lineup, describing it as the "freshest" in history.

Ford CEO Allan Mullaly called the auto maker's progress reshaping its business during the tough start of the year for the auto companies "phenomenal."

"We're so pleased to have a product line, every one of them best in class, and to have consumers responding to them the way they are," Mullaly told ABC News. "It's pretty fabulous."

Ford is building battery-electric vehicles, next-generation hybrids and plug-in hybrids that will soon hit showrooms. In doing so, the auto maker is playing catchup with U.S. rival GM, which has been dabbling with electric and hybrid developments since the EV1 was introduced in 1996.

One of the new technologies Ford is most excited about is its EcoBoost engine program.

The engine, which will be placed in vehicles across Ford's fleet, uses turbo and direct injection technology to deliver what Ford says is "V-8 performance with V-6 fuel efficiency" making it 20 percent more fuel efficient than a comparable engine while producing 15 percent fewer emissions.

Ford also says it will offer a four-cylinder EcoBoost engine next year.

Several vehicles in the company's 2010 lineup will offer the new EcoBoost. The auto maker wants to improve fleet fuel economy by 35 percent by 2015.

Industry analysts say the new technology could shake up the market because it is an inventive way to make larger cars more environmentally friendly.

Ford Uses EcoBoost to Improve Fuel Economy

Auto analyst John Casesa called the EcoBoost "a practical way to improve fuel economy at a reasonable cost." He said it could add about $700 per car to install these technologies as opposed to the $3,000 to $4,000 additional cost for hybrids.

Ford's improvement in the market comes in part because of the company's delicate effort to try to distinguish itself from its government-owned competitors, said Aaron Bragman of IHS Global Insight.

"Ford is really taking advantage of the fact that a lot of American buyers and a lot of American car intenders are shying away from Chrysler and GM," Bragman said.

"The stigma of bankruptcy has not been as damaging as it could have been, but it's still affecting people's perceptions of each auto maker," he said. "The fact that Ford hasn't taken any government money in terms of a bailout, hasn't gone through bankruptcy, they appear stronger than the others."

It's not just that Ford has had the good fortune of avoiding bankruptcy, the auto maker thinks its product line is much improved because they've been focused on quality for several years now.

"Ford is in a very different place than our competitors. Through the worst of times we kept investing," Mullaly said.

For example, a recent J.D. Power quality survey found that the quality of Ford vehicles has improved. But still, challenges remain for the 106-year old company.

Foremost, Americans are not buying cars at the rate they had only a few years ago. The seasonally adjusted sales pace in June was down nearly 28 percent compared to a year ago.

And while Ford -- the only U.S. auto maker to avoid a government bailout -- has shown signs of stability, its sales are still down.

After selling 154,873 light vehicles in June, Ford was down 10.7 percent over a year ago but it fared much better than rivals GM and Chrysler, which were down 33 percent and 42 percent respectively.

Ford's top sales analyst predicted U.S. auto sales could improve later this year.

"In the last half of the year, our expectation is that sales might be at a rate that's about a million units higher," analyst George Pipas told ABC News. That would boost the total number of sales in 2009 to around 10.3 million, Papas predicted.

Ford Expects Increased Sales of New Models

Even if his predictions hold true, however, total sales in 2008 would still be fall 2 million units short of 2008 levels and far below the 17 million vehicles sold on average during the past decade.

Despite the tough road ahead, Pipas said Ford is particularly excited about potential sales for its 2010 models later this year, especially if the U.S. economic downtown improves.

"Just based on what appears to be pretty good consumer responses to the new products, we're certainly optimistic that we'll be able to participate in the growth of the economy going forward," Pipas said.

Ford said its dealers are reporting numerous inquiries from customers about the government's "Cash for Clunkers" program that provides a voucher up to $4,500 to replace gas guzzling vehicles with more fuel efficient cars and trucks.

Several vehicles in Ford's 2010 lineup have been substantially upgraded, according to the company. They are: The Ford Taurus and Taurus SHO, the Ford Flex, The F-150 SVT Raptor, the Ford Transit Connect, the Lincoln MKS and the Lincoln MKT.

ABC News' Charlie Herman contributed to this report.