Will This Be Ford's Achilles' Heel?

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I'll say this: When Consumer Reports doesn't like something, it doesn't beat around the bush.

And it really doesn't like Ford's (NYS: F) much-acclaimed (in some circles) and much-maligned (in others) MyFord Touch control system.

In fact, the benchmark consumer advocacy magazine dislikes the system so much that its ratings of new Fords have dropped sharply -- despite the Blue Oval's huge improvements in quality and competitiveness in nearly every other area.


And that could turn into a big headache for Ford.

A big-margin system that generates big headaches
Consumer Reports has been complaining about Ford's touchscreen "infotainment" system for a while, but the magazine's complaints hit a new high with an article on Wednesday, titled "Why the MyFord Touch Control System Stinks." (Like I said, it doesn't beat around the bush.)

MyFord Touch is a series of systems, optional on most Ford products, which builds on Ford's acclaimed (mostly) SYNC system. SYNC, developed jointly with Microsoft and Sony, provides voice-activated controls for in-car functions like the stereo and Bluetooth phone integration.

MyFord Touch goes beyond SYNC by eliminating many of the car's conventional control switches, instead relying on touchscreen controls and displays for a host of functions, including the car's audio and climate control systems.

SYNC and MyFord Touch have been popular options on new Fords and Lincolns, and they've been big contributors to the company's profits -- especially in North America, by far Ford's most profitable region. The systems' popularity (and profitability) has spawned a raft of imitators, including the new CUE system that General Motors (NYS: GM) has begun rolling out on its latest Cadillacs.

But from Consumer Reports' perspective, the fact that MyFord Touch has spawned imitators is part of the problem.

Why CR's complaint is a problem for Ford
The gist of the magazine's complaint with MyFord Touch has two parts: First, the system is complicated to operate. Drivers can't just feel for the controls, it says; they need to look to find them -- and that can be time-consuming because some of the touchscreen "pages" are cluttered with buttons. And that leads to the second part of its complaint: Controls that require the driver to look away from the road are a safety hazard.

For Consumer Reports, that's a big no-no. And it's costing Ford big points in the magazine's much-watched comparison tests. A test released this week ranked Ford's Taurus well below rival sedans from GM, Hyundai (OTC: HYMTF), and Chrysler -- in large part because of the magazine's frustrations with MyFord Touch.

That could be a problem for Ford. The company's quality has improved greatly by many measures in recent years. But thanks to Detroit's ongoing lousy reputation, many consumers have remained reluctant to consider Ford's products over known-quantity brands Toyota (NYS: TM) and Honda (NYS: HMC) .

This won't help. Consumer Reports is taken very seriously by lots of car shoppers. Even non-subscribers tend to have a general impression of where the major brands fall in the magazine's ratings. Ford's renaissance has been driven by its much-improved products -- but if consumers can't be convinced to test-drive those products, the improvement won't matter.

Where does Ford go from here?
Ford has acknowledged complaints from its customers, but many owners say the system just takes a little getting used to. Ford recently released an upgrade to MyFord Touch and its Lincoln counterpart that improved the system's usability a bit, and the company says that 71% of owners with the new upgrade say that they would recommend the system to others.

And the system is impressive to tech-hungry consumers, especially when demonstrated by a dealer who knows it inside and out -- something that has helped Ford's sales. SYNC and MyFord Touch are a big part of Ford's push to reach younger consumers, who as a group aren't as excited about cars as generations past.

But Consumer Reports' scathing critique seems likely to resonate. How will Ford respond? Stay tuned.

Ford's stock has been under pressure lately, dropping to levels not seen in years. But the company is still performing very well at home and is investing heavily for growth abroad. Have these short-term pressures created an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? To answer that, one of our top equity analysts has compiled a premium research report with in-depth analysis on whether Ford is a buy right now, and why. Click here to get instant access to this premium report.

The article Will This Be Ford's Achilles' Heel? originally appeared on Fool.com.

Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool owns shares of Microsoft and Ford. Motley Fool newsletter services have recommended buying shares of Microsoft, General Motors, and Ford. Motley Fool newsletter services have recommended creating a synthetic long position in Ford. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

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