Ford

The 2013 Escape will offer only four-cylinder engines. Can such engines really match customers' power expectations? Yes.

We’ve seen this movie before: Stagnant economy. Soaring gas prices. Government-mandated increases in fuel economy that doom the big vehicles Americans prefer.

In the 1970s, automakers responded to those conditions with that they called “downsizing.” Cars became cheaply made, cramped and slow. For some reason, consumers weren’t thrilled with these new models. The quick-and-dirty solution was to bolt a turbocharger onto their wheezing, underperforming four-cylinder engines with the promise of hot performance and good fuel economy.  Sailors have made more reliable promises to girls in foreign ports.

The technology was immature and the result was unreliable: short-lived engines with poor dynamic driving qualities. Ford was one of the culprits, with turbocharged four-cylinder engines offered in models like the Mustang and Thunderbird, which were traditionally powered by V8s.

But that was a long time ago.  In response to pricey gas and more stringent federal fuel economy standards, Ford is rolling out a family of smaller turbocharged engines to replace bigger, thirstier ones.  And this time, Ford got it right.

While the V6 engine option was popular in the outgoing Escape compact SUV, the 2013 Escape will offer only four-cylinder engines.  Can such engines really match customers’ power expectations? Yes they can. Especially when they are the turbocharged EcoBoost engines that Ford offers as an upgrade from the base engine.

The base engine is an update of 168-horsepower, 2.5-liter four-cylinder seen in the outgoing model and it is a good one for budget-conscious drivers, with 22 mpg city and 31 mpg highway.  But things start to get more interesting with the next step in the lineup, with a 178-hp turbocharger EcoBoost 1.6-liter four-cylinder.

That's an incredibly small engine to expect to move a 3,500-plus pound SUV, but thanks to modern turbocharger technology it makes both the peak power and the low-speed torque to move the Escape with good hustle.  It has marginally better horsepower, torque and fuel economy than the base engine, a combination that makes it an appealing upgrade.  The EcoBoost 1.6 offers the maximum fuel economy among the Escape’s engines, with 23 mpg city and 33 mpg highway.

A lot of buyers liked their V6 engines, though. What are they to do? The 240-hp 2.0-liter EcoBoost four-cylinder is the answer for them. Ford did extra homework on this engine, giving drivers more power than the old model’s V6 with fuel economy nearly equal to that of the base engine, at 23 mpg city and 30 mpg highway.

But just as importantly, Ford engineers sweated the detailed needed to make the EcoBoost 2.0 smooth and quiet enough to serve as a legitimate substitute for a V6. This is the area where carmakers will see the most resistance from customers, because V6 and V8 engines are smooth and quiet, with a refined exhaust note.  Four-cylinders are inherently raucous, challenging engineers to find ways to tame their obnoxious nature if upmarket customers are to accept them.

Ford has achieved that with the 2.0 EcoBoost.  The 1.6 EcoBoost targets a customer with a sportier mindset who might want to hear the engine a little bit, so it is louder, but the 2.0-liter is thoroughly muffled.

That quietness is indicative of the 2013 Escape’s overall refinement. Like the Ford Focus compact car on which it is based, the Escape is a notch above its competitors, providing a rich feeling driving experience. Unlike the Focus, the Escape enjoys a proper automatic transmission, with six gears and slick shifts, so the Escape won’t chase away potential buyers with an irritating, rough-driving automated manual transmission posing as an automatic.

The Escape’s cabin is opulently detailed, and even the entry-level models have pleasant soft-touch surfaces. The thick-rimmed steering wheel connects to excellent steering that provides superb feedback. The Mazda CX-5 is the Escape’s only equal dynamically, and the Escape has less road and wind noise inside for a more placid passenger space.

Like other new Fords, the Escape boasts an improved version of the annoying-to-use Sync voice command system and MyFord Touch touch-screen infotainment systems. The latest iteration is less of a pain in the, er, neck to use but still falls short of the simplicity and convenience of properly designed knobs and switches. At this point MyFord Touch remains an exercise in technology for technology’s sake, so we look forward to the next upgrade. We’d still opt for the conventional radio and climate controls.

But here’s a tiny electronic detail they got right: the turn signal. Seems simple enough, but in recent years Ford and other carmakers have decided that it would be better for the control stalk to return to center, even when you’ve activated the turn signal. For the Escape they’ve gone back to having the stalk remain in the raised or lowered position if the turn signal is on, letting you know it is still on and making turning it off simple. When the stalk is already in the middle, how do you cancel a turn signal?

Other electronic gimmicks: a tailgate that opens and closes remotely by kicking your foot under the rear in the manner of an old straight-ahead field goal kicker (props to Redskins kicker Mark Mosley, 1982 NFL MVP, the last straight-ahead kicker and the only kicker ever named MVP!).  And electronic grille shutters that block airflow to the radiator at highway speeds to trim aerodynamic drag and boost fuel economy.

The “U” in SUV does stand for “Utility” and Ford added that in the Escape by stretching the vehicle’s wheelbase and adding most of that newfound space to the rear seat for more passenger legroom. The cargo area is also larger for that ubiquitous “stuff” people cite when explaining their need for an SUV rather than a sedan.

The Escape marks our third consecutive compact SUV review, as this hotly contested segment turns over this year. That’s because compact SUVs are second only to sedans in popularity, and the two groups account for 60 percent of new car sales.

With impressive innovations like EcoBoost providing an excellent combination of power and frugality, it is easy to see why these vehicles are attracting a large following.

2013 Ford Escape

• Base price: $23,295 (including $825 delivery)
• Price as tested: $26,875 (including $825 delivery)
• EPA fuel economy: 23 city, 33 highway
• Pros: Slippery styling, zippy handling, bank-vault solidity
• Cons: MyFord Touch infotainment hassles, and, um, that’s about it
• Verdict: The best compact SUV in the mainstream segment, with the handling of the Mazda CX-5 and the quietness of premium-segment models.
• Standard equipment: 2.5-liter 168-hp four-cylinder engine, six-speed automatic transmission, power steering, AM/FM/CD six-speaker stereo, battery saver feature
• Major options: 1.6-liter 178-hp EcoBoost engine, Sync voice control, Sirius satellite radio, fog lamps, SecuriCode keyless entry
• Safety equipment: electronic stability control , antilock brakes, brake assist, dual-stage front airbags, side airbags, driver’s knee airbag, tire pressure monitoring

Robyn Beck / AFP - Getty Images

Facebook employees walk past a wall of graffiti at the company's headquarters in Menlo Park, Calif. GM's decision to yank its ads from Facebook could be a case of the automaker not correctly seeing the potential power of the social network to build brand loyalty.

General Motors Co.’s decision to stop advertising on Facebook is like the story of The Emperor’s New Clothes. In this cyber scenario, GM, not a child, is pointing out that Facebook may be a bit underdressed when it comes to getting consumers to buy the automaker’s products.

But is Facebook really naked when it comes to providing a bang for advertising bucks, or is GM just not able to see the real potential of the social media powerhouse?

The answer may come down to what companies want out of social networking sites such as Facebook: immediate clicks on ads, or the potential for brand-loyalty building.

“GM is making a mistake, and it’s probably because they don’t have the right analytics in place and are too obsessed about short term sales effects,” said Rex Briggs, CEO of Marketing Evolution Inc., which has worked with a host of large companies including GM to measure how ad dollars are spent.

The company, he stressed, is living in the past if it expects quick returns similar to the results from television ads or rebate promotions. Social media just doesn’t work like that.

“Social media is a square peg that doesn’t fit in those round holes and doesn’t fit the traditional way marketers think about incentives,” he noted. “It’s based on people engaging with a brand and becoming an advocate of the brand.”

Consumer products companies, he continued, need a major presence on Facebook and other social networking outlets, but they also need to spend money on ads, especially things like sponsored stories, which he said bring in $3 plus for every dollar spent on Facebook.

For GM, however, the ad payoffs on Facebook weren’t enough.

“GM could not see the value and I am guessing it’s not the only one,” said Peter Cohan, a management consultant and venture capitalist. “If an advertiser on Facebook can track a user clicking on an ad to an online purchase, then – depending on the price of the ad and the value of the purchase – that advertising money would be well spent,” he maintained. “Otherwise, it’s a waste of money.”

Some social media experts think the main value in Facebook is in building a loyal fan base.

“There has been a great deal of skepticism around Facebook's advertising model, but simply relying on display ads to do the trick is the wrong approach," said Jeffrey Dachis, CEO of Dachis Group, a social business consulting firm that works with companies such as Disney and Target. “It's about engagement. Users that can interact with compelling content on Facebook will be more likely to serve as brand advocates than those who are presented with an advertisement with no opportunities for interaction."

GM, Dachis noted, doesn't plan reductions to its marketing budget for content creation and community management on Facebook. GM did not immediately return a phone call requesting information on their decision. But a story in the Wall Street Journal Wednesday quoted the company's marketing head Joel Ewanick who said on Facebook "the content is effective and important."

When it comes to building a fan base, Jan Rezab, CEO of social media analytics company Socialbakers, said the auto giant has done a crummy job engaging potential customers on Facebook, noting that Mercedes-Benz has more than 7 million likes on its Facebook page, compared to less than 400,000 for GM.

“We think that GM should not scrap their Facebook marketing strategy yet,” Rezab advised. “A lot of brands have been successful.”

Indeed, Ford Motor Company, with 1.5 million Facebook likes, tweeted Tuesday that: “It's all about the execution. Our Facebook ads are effective when strategically combined with engaging content & innovation.”

When asked to elaborate on the tweet, Ford's global head of social media, Scott Monty, told MSNBC.com Wednesday that "we’ve found Facebook ads to be very effective when strategically combined with engagement, great content and innovative ways of storytelling, rather than treating them as a straight media buy."

The company has found success with Facebook and other digital outlets, he said, including the debut of the 2011 Explorer which "yielded better results than a Super Bowl ad for a fraction of the cost."

Aside from marketing, Ford also sees value in working with Facebook in research and development. 

"Our engineers have also been working with Facebook engineers to develop unique and safer ways of integrating the car experience with Facebook," he noted.

GM, on the other hand, apparently doesn't see the potential that Ford does, moving to dump Facebook ads, just days before the social networking site's initial public share offering. Some marketing experts believe it could get other companies thinking the same way.

“A lot of marketers at places like GM continue to see Facebook as a media buy rather than a conversation tool. When you look at it from that standpoint it doesn’t look like a good media buy,” said Elliot Schreiber, marketing professor with Drexel University's LeBow College of Business. “I suspect we’re going to see others who’ve been sitting on the fence that are going to back out.”

As for more companies bailing, Marketing Evolution’s Briggs said, “you can always get another lemming to follow over the cliff, but anyone who’s studying this and thinking through the difference between planting the seed and harvesting won’t follow GM over the cliff.”

Updated 2:05 p.m. ET: General Motors and Ford reported slight dips in U.S. new vehicle sales for April, but GM lifted its outlook for U.S. sales this year based on encouraging signs that the broader economy will grow.

Chrysler, controlled by Italian automaker Fiat SpA , said sales rose 20 percent to 141,165 vehicles, compared with 117,225 in the same month last year. Chrysler's performance was its strongest April in four years.

And Toyota, after a tough year of earthquake-related shortages, is back.

GM now projects the U.S. auto industry will sell between 14 million and 14.5 million cars and trucks this year, up from its previous outlook of 13.5 million to 14 million.

"Over time, strength in the manufacturing sector and strong retail sales will lead to more job creation," GM sales executive Don Johnson said in a statement. "That will help more consumers put the recession behind them."

The sales declines at GM and Ford were due partly to a quirk in the calendar. April has three fewer selling days than last year, which can skew results.

Including medium and heavy trucks, Ford expects the overall industry to post an annual sales rate in the "mid-14 million" range. Chrysler Group, the No. 3 U.S. automaker, forecast an April sales rate for the industry of 14.6 million vehicles.

That would be stronger than the 14.4 million rate projected by economists, according to Thomson Reuters, and would also top the March rate of 14.4 million.

GM reported an 8 percent decline in sales, due a 25 percent drop in fleet sales, to 213,387.

Ford sales fell 5 percent to 180,350 from 189,778 a year earlier. Sales of its Escape SUV model, which is expected to be replaced later this year, fell by a fifth while Fiesta subcompact sales dropped 44 percent.

When adjusted for the fewer selling days, Ford said its April sales rose 7 percent.

Last week, executives said Ford's incentive strategy in April would contribute to a drop in its U.S. market share for the month. TrueCar.com said incentives on Ford cars and trucks fell about 10 percent, compared with a drop of 4.7 percent for the industry.

Volkswagen AG reported a 31.5 percent increase in sales.

Toyota's share of U.S. auto sales likely climbed back to a level not seen since last year's Japanese earthquake, which disrupted production. Replenished supplies and hot sellers like the new Camry sedan and Prius C subcompact drove sales, analysts say.

Auto buying site TrueCar.com predicts Toyota's U.S. market share reached 15.3 percent last month, its highest level since December 2010. That's up from a low of 12.5 percent last September, when the automaker sold 61,600 fewer vehicles than it's expected to in April.

"We knew they were going to be able to gain back part of their share this year, but they're doing it quicker than we thought. The new products are doing well," says Jesse Toprak, TrueCar's vice president of market intelligence.

Auto sales are watched as one of the earliest snapshots of American consumer demand. In recent months, sales figures have proven a bright spot in an economy that expanded at a 2.2 percent annual rate in the first quarter.

But there are mounting signs that the broader U.S. economy is losing steam. Analysts debate whether high fuel prices and warm weather boosted sales in the first quarter, potentially leading to a pullback in sales later in the year.

Ford shares were up 1 cent at $11.29 and GM shares were up 13 cents at $23.13 on Tuesday morning on the New York Stock Exchange.

Reuters and the Associated Press contributed to this report.

Has retro finally run its course?  Much like Hollywood studios, automakers like to bet on sure things, and showrooms have plenty of examples of how everything old can become new again, like the latest reincarnation of the Volkswagen Beetle, and the revival of the Chevrolet Camaro.

But Ford, which scored a huge hit with the old-is-new ’94 Mustang remake, and which subsequently created a studio specifically to develop more retro design opportunities, is apparently ready to step into the future.

An all-new version of the original pony car – dubbed Mustang III by Ford insiders – will debut just in time for the nameplate’s 50^th anniversary, in mid-2014.  And it will have a lot more in common with the widely acclaimed Evos concept that Ford unveiled last autumn than with the current Mustang.

And the changes will be far more than skin deep.  Reflecting both the desire to start marketing Mustang beyond North American shores, as well as the need to meet increasingly stringent fuel economy standards, insiders report the new model will offer an array of advanced high-mileage engines.

Ford has further impetus to re-think the Mustang basics.  Long the dominant player in the pony car segment, Mustang has taken a beaten from the reborn Camaro, which is now solidly outselling the Ford offering.

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There’s no question Ford wants to hit a home run when it re-launches the new Mustang for 2014.  Introduced by former President Lee Iacocca at the New York World’s Fair, the original was an immediate success, demand quickly outstripping supply and setting off a race by Ford’s competitors to come up with a response.

Over the years, the big battle has been between Ford and Chevy, the GM division eventually dropping the Camaro due to sluggish sales.  But the 2010 revival has clicked with consumers and Camaro last year outsold Mustang 88,249 to 70,438.  Through March of this year, the gap has closed a bit, Chevy just 1,800 ahead of Ford – the latter maker hoping to reverse its fading fortunes with the updated, 650-horsepower Mustang Shelby GT. That will give it a 70 hp advantage over the ZL1, the most powerful Camaro ever launched.

But in reality, while such high-performance versions might offer a halo to the two brands, most customers opt for less sporty V-6 offerings.  And industry analysts say that trend is almost certain to continue in the face of rising fuel costs – and a U.S. Corporate Average Fuel Economy standard set to reach 34.5 mpg in 2016 and 56.2 mpg by 2025.

BMW Stretches the 3-Series

And that’s likely to mean a variety of big changes to just every detail of the next Mustang.

Like aerodynamics.  Expect the remake — likely to be marketed as a 2015 model — to deliver a much more wind-slick pony car.  The good news is that by reducing wind resistance Ford should be able to enhance performance, as well as fuel economy.

The same goes for weight.  As TheDetroitBureau.com reported last year, recently-retired global product chief Derrick Kuzak set a mandate of trimming the weight of the average Ford vehicle by about 700 pounds.  That’s good news considering that recent generations of the Mustang have gotten heavier and heavier as the maker loaded up all sorts of new hardware, from airbags to infotainment systems, never mind those big V-8s.

Switching to an all-new platform and body could also enhance the appeal of the Mustang overseas, where it has never been much more than a niche player.  But CEO Alan Mulally, as part of his One Ford strategy, has made it clear that whenever and wherever possible, Ford products will be sold in as many markets as possible with only the most minimal variations.  The new Fusion, for example, has about 80% of its parts and components in common with the European Ford Contour.

Ford Launches Plug-n-Play Focus Electric on Facebook

And like the Fusion, the Mustang III project appears to be relying on the basic shape of that Evos concept car – minus the four gull-wing doors shown at the Frankfurt Motor Show.  Images circling the automotive community – the one shown here produced for PopularHotRodding.com– suggest the new Mustang will even get the Evos/Fusion grille, itself clearly influenced by Ford’s former Aston Martin division.  But the flared rear shoulders, swept C-pillar and other details envisioned by artist Sean Smith show that Ford could still maintain key, classic Mustang cues.

Other widely anticipated changes will likely include a long-overdue switch for a “live,” or solid, rear axle to a fully independent rear suspension – much as GM endowed the new Camaro with.  While Ford has earned kudos for what it has accomplished with the old “stick,” it clearly can take things a big step further with an IRS.  And by increasing sales volumes it should be able to minimize the cost penalty.

As for powertrains, Ford may still find use for the current V-6, which surprised the motoring world with 30 mpg fuel economy and 300-plus horsepower when it debuted a few years back.  But the world is moving in a very different direction, and Ford isn’t content to play fast follower.  It has been rapidly expanding the use of its new turbocharged EcoBoost line-up which, Mulally has promised, will be available in 80% of Ford’s North American vehicles in a few years – and even more of its overseas lines.

Anticipate a 2.0-liter, inline-four EcoBoost, which would give the current V-6 a run for its money.  Meanwhile, there have been long-standing rumors of a V-8 EcoBoost project.  That could yield Shelby-style performance with even better mileage than the current Mustang GT’s relatively modest 5,0-liter eight-banger.

Somewhere in the middle might be a high-mileage, twin-turbo 3.5-liter EcoBoost, similar to the one in the current Taurus SHO – at least if the fuel economy advantage would offset the price penalty for this sophisticated powertrain.

How far might things go? There are even rumors of a Mustang hybrid. And considering that even Ferrari is toying with such technology why not Ford?

One of the challenges Ford faces will be marketing the next Mustang in different parts of the world where its competitive set might be markedly different.  That could mean anything from the Camaro to the BMW 3-Series, with the latest Hyundai Genesis Coupe thrown in for good measure.

There’s no question it’s a risky venture.  Ford came close to making a complete paradigm shift once before.  About two decades ago, it was ready to switch to a front-wheel-drive model that was little more than a renamed Ford Probe – a short-lived sporty coupe.

When word leaked out it triggered a tidal wave of opposition from traditionalists and led Ford to stick with the familiar pony car shape two generations had already grown up with.

Will a new Millennial generation be more accepting? If this artist’s guesstimate of the new Mustang III is on target, Ford won’t abandon the historic Mustang look entirely. And might some significant performance enhancements, such as the independent rear suspension, win over older Mustang loyalists?  Or will they flee to Chevy showrooms?

Ford will soon find out if the stories leaking out of its Dearborn, Michigan headquarters prove on target.

Ford says it will spend $600 million to expand its factory capacity in China as it tries to play catch-up with competitors.

The company says it will add to its factories in Chongqing to handle growing demand. The additions will give Ford the ability to make 350,000 more vehicles per year by 2014. That will increase its total to 950,000.

Ford Motor Co. says it plans to triple the cars in its Chinese lineup to 15 over the next three years. It also will add 20 new engines and transmissions.

The company will build a new assembly line, body shop and paint shop at the Chongqing site in southwestern China. The investment will be made with the company's joint-venture partner, Changan Ford Mazda Automobile Limited. 

The Associated Press contributed to this report.

David Zalubowski / AP

A line of 2012 Focus sedans at a Ford dealership in the south Denver suburb of Littleton, Colo.

Updated at 2:04 p.m. ET: The auto industry looks set to ride the appeal of smaller cars to its best quarterly performance in almost four years.

Auto sales rose sharply in March, boosted by consumers with more confidence in a recovering U.S. economy who want to buy fuel-efficient cars and trucks in the face of rising gasoline prices.

Strong sales in March are the most convincing evidence yet this year of a sustained recovery in the U.S. auto sector. Analysts said unseasonably warm weather last month drew out American car shoppers. The rise in gas prices to near $4 a gallon coupled with high used car prices also prompted some consumers to buy new vehicles earlier than planned.

Ford's U.S. sales rose 5 percent from a year earlier. Ford, No. 2 in the U.S. market, reported its best March for new auto sales in five years on strong sales of small cars such as its Focus sedan and its F-Series pickup trucks.

Chrysler, No. 4 in U.S. sales, reported a 34 percent increase, led by its Chrysler brand, which had a sales increase of 70 percent.

It was the 24th consecutive month that Chrysler showed a year-on-year sales gain.

General Motors, the No. 1 automaker in U.S. and global sales, said its U.S. sales rose 12 percent in March on solid demand for cars and small crossovers that achieve 30 miles per gallon or better on the highway.

Nissan said its sales in March rose 12.5 percent, and Volkswagen said its March sales soared 35 percent -- its best U.S. March sales since 1973.

Toyota, No. 3 in U.S. sales, saw a 15 percent rise in March sales.

South Korea's Hyundai, which has the best fleet-wide fuel economy ratings in the market, said it expected to have record monthly sales.

"The current level of gas prices will further accelerate the release of pent-up demand as consumers lean towards significantly more fuel-efficient new vehicles while used prices are still strong," Morgan Stanley analyst Adam Jonas said.

Consumer confidence rose in March to its highest level since February 2011, the Thomson Reuters/University of Michigan reading of consumer sentiment showed.

Consumers who held off purchases during the economic downturn -- which led to the worst U.S. auto sales since World War II adjusted for population -- are returning to the market, said Edmunds.com analyst Jessica Caldwell.

In February, auto sales rose to their highest level in four years.

"Vehicle trade-in rates have achieved sustained highs in recent months, which suggests that consumers have decided that they've held on to their cars for too long," Caldwell said. "And with the average credit score for new car buyers at its lowest level since the first half of 2008, the market is clearly becoming a friendlier place for all buyers."

As sales rise, automakers are also getting more profit per vehicle. Incentives continued to trend downward in March while the average transaction prices per new vehicle rose, autos consultant TrueCar.com said on Tuesday.

Auto analysts surveyed by Thomson Reuters expect an annualized sales rate for March of 14.74 million vehicles, which would be a rise from last March's 13.1 million sales rate. Analysts say pent-up demand, easier credit, more fuel-efficient product offerings and mild weather helped boost March sales.

Mike Jackson, chief executive of the nation's largest auto retailer, AutoNation Inc., told CNBC on Monday that the company raised its 2012 sales forecast to about 14.5 million from 14 million, based on the strongest quarter for auto sales since before the sales downturn that began in late 2008.

Incentive spending in March fell about 2 percent industry-wide, rising only for Chrysler, Nissan and Volkswagen, TrueCar.com said. Major automakers are expected to show gains on year-ago sales, led by Chrysler Group LLC, GM and Toyota Motor Corp.

"Automakers have hit the sweet spot this month with lowered incentives and double-digit sales increases, which signifies underlying strength in consumer demand," said analyst Kristen Andersson of TrueCar.com.

Truck sales continue to improve, but the improvements in car sales are relatively stronger, reflecting increased appetite for smaller, more fuel-efficient models, analysts said.

Is this a sign that the recovery is here to stay? Share your thoughts on Facebook.

Reuters and The Associated Press contributed to this report.

Paul Sancya / AP

The lawsuit said fuel tank linings on 10 E- and F-series truck models made between 1999 and 2008 would "separate and flake off."

Ford has been sued for allegedly selling trucks over a 10-year period that had defective fuel tank linings, and for hiding the problem from consumers even as it warned dealers.

The lawsuit filed Wednesday in a New Jersey federal court said fuel tank linings on 10 E- and F-series truck models made between 1999 and 2008 would "separate and flake off."

It said this would clog fuel systems with debris and rust, causing a sudden loss of engine power, and potentially causing vehicles to buck or kick or suddenly stall.

Ford in 2007 issued a "secret" technical service bulletin to dealers advising of the problem, but neither recalled the affected trucks nor offered to repair them for free, the complaint said.

"Hundreds, if not thousands" of drivers have experienced the defect, it added.

A Ford spokeswoman did not immediately respond to requests for comment. Lawyers for the plaintiffs had no immediate comment.

The lawsuit was filed by Chester, New Jersey-based Coba Landscaping and Construction Inc and its principal Galo Coba.

It alleges fraud, breach of warranty, and unjust enrichment, among other charges, and seeks compensatory, punitive and triple damages.

The F-series pickup is the best-selling U.S. car or truck. Ford is based in Dearborn, Michigan. The E-Series is a truck-based full-size van.

Reuters contributed to this report.  

Fabrice Coffrini / AFP - Getty Images

Visitors play a videogame at the Japanese carmaker's booth Mazda during the second press day ahead of the 82nd Geneva Motor Show on March 7, 2012, in Geneva.

The “zoom-zoom” company may be running out of gas.

Hammered by last year’s Japanese earthquake and tsunami, all but abandoned by long-time partner Ford Motor Co., and largely ignored by American buyers, Mazda has been struggling to reverse its waning momentum.  Profits are down -- even though sales in the key U.S. market are running ahead of the overall American automotive recovery -- forcing the maker to begin a series of “substantial” employment cuts later this week.

Hoping to stand out in an increasingly crowded and competitive market, Mazda is doubling down on a new technology, dubbed SkyActiv, that it claims can deliver most of the benefits of a hybrid at a fraction of the cost. 

It may be too little too late.  With Ford having sold off all but a minimal stake in its Japanese partner and no longer sharing the hefty cost of developing new products, some observers fear that Mazda can no longer go it alone -- something even its CEO grudgingly admits may force it to share the SkyActiv system to get some much-needed assistance.

“It’s a very serious situation because they don’t have a Ford to fall back on or another partner in the wings,” said George Peterson, chief auto analyst with AutoPacific, Inc. He describes the cuts set to begin at Mazda’s U.S. headquarters in California this week as “substantial.”

The maker isn’t yet saying how many of its employees will be offered voluntary buyouts, but it is expected to follow with additional, involuntary cuts in the coming weeks.

The news has taken few by surprise.  From its global headquarters in Hiroshima, Mazda Motor Corp. has predicted a dismal 100 billion yen loss -- or $1.2 billion at current exchange rates -- for the current fiscal year.  The company plans to raise 151.2 billion yen in a record share sale in hopes of offsetting what will almost certainly be its worst loss in 11 years.

A sizable share of that red ink is due to the impact of Japan’s natural disaster last March.  It reportedly cost the maker 80,000 units of production and $433.2 million in overall losses -- the fourth-largest figure among all Japanese makers.

But the situation has been complicated by lopsided exchange rates, which fell as low as 76 yen to the dollar earlier this year. Rates have now rebounded only slightly to about 83 yen to the dollar.

Yet ironically, Mazda is now more dependent upon its cost-disadvantaged Japanese production base than any other manufacturer.  And the situation is going to get worse when it walks out of a decades-long joint venture in Michigan, dubbed Auto Alliance, where it is currently producing the midsize Mazda6 alongside Ford’s Mustang.

Mazda hopes to offset that by building a new plant in Mexico to handle smaller models, such as the Mazda3, that are especially sensitive to exchange rates. Peterson says the company simply doesn’t have the money to open that plant right now, however.

“It’s not the first time Mazda has been in trouble,” the analyst points out. Indeed, Mazda nearly folded in the 1970s when it turned out that the maker’s distinctive Wankel rotary engine had serious quality problems. It slowly dug itself out of that crisis but fell into another financial hole barely a decade later. 

Salvation came from Ford, a long-time affiliate, which began building up equity in the small Japanese firm. Eventually, Ford held a 33 percent stake and, under Japanese law, was able to appoint its own management team, which at one point included Mark Fields, now Ford’s President of the Americas.

After joining the U.S. maker in 2006, however, new CEO Alan Mulally decided to draw down that stake. Ford now holds a minimal 4 percent and is largely severing product and powertrain development ties.

Mazda officials have put on a game face, insisting that this has freed them up to follow their own path without the compromises inherent in an alliance.  The payoff has been SkyActiv. 

The comprehensive system involves the transformation of just about every element of the automobile, from chassis design to the smallest water pump. But the key features are a lighter yet stronger body and more efficient gasoline and diesel powertrains.

The first full example of the new approach is the CX-5 crossover which recently began rolling into U.S. showrooms. With highway fuel economy of up to 32 mpg, the new model is nearly as efficient as comparably sized hybrids -- but at a base MSRP of $21,490, the CX-5 has a significant cost advantage.

If anything is being spared Mazda’s budget-cutting knife, it’s the marketing department which is heavily advertising the new technology. The good news for the maker is that U.S. sales are up 48 percent for the first two months of 2012. Product chief Robert Davis noted, during a recent interview, that 60 percent of the initial buyers traded in other brands.

While an automaker might hope to leverage such a high-tech system to its own advantage, Mazda CEO Takashi Yamanouchi recently acknowledged the maker might have to offer SkyActiv up as a bargaining chip as it “actively” searches for a partner to replace Ford.

“We are considering every option,” the executive acknowledged last month.

Part of the problem is that as good as Mazda claims SkyActiv is, the company also concedes it will eventually need to add hybrids to its powertrain line-up due to ever tightening fuel economy mandates in Japan, Europe and the U.S.

“It’s partner or die,” said David Cole, chairman-emeritus of the Center for Automotive Research, in Ann Arbor, Mich. 

Mazda has shown a surprising ability to maneuver itself out of trouble over the years, and SkyActiv could be the weapon it needs to battle back.  But the situation is “tenuous at best,” adds Peterson. There is little room for mistakes -- or more losses.

U.S. safety regulators have opened an investigation into an estimated 360,000 Ford Taurus sedans for a potential problem with the throttle getting stuck in an open position.

The National Highway Traffic Safety Administration said it is investigating the 2005 and 2006 model years.

The NHTSA  said on its website that 14 people have complained about the problem. No crashes or injuries have been reported, but several drivers said they felt unsafe when the throttles became stuck. One ran a red light and entered an intersection before the car could be stopped.

A preliminary investigation is the first step in a process that could lead to a recall if regulators determine that a manufacturer needs to address a safety issue.

The agency says the cruise control cable may become detached and hold the throttle open. Drivers have reported that it was hard to stop the car with the brakes, and several said they had to shut off the engine or shift into neutral to stop.

The investigation, opened last Wednesday, does not include a nearly identical car, the Mercury Sable. NHTSA posted documents outlining the probe on its website over the weekend. The investigation could lead to a recall, but so far none has been ordered.

Ford spokesman Daniel Pierce said the company is cooperating in the probe. He said the company was just notified of the investigation and he did not know why the Sable was not included.

One driver said in a complaint to NHTSA on Aug. 27, 2010 that a 2006 Taurus began to accelerate without any pressure on the gas pedal. The driver pushed the brakes to the maximum, but the car ran a red light and stopped halfway into an intersection. The engine revved until the driver shut off the car, and it revved again when it was restarted.

"This is an extremely dangerous situation," the driver wrote. "There needs to be something done about this before it becomes fatal."

On Nov. 27, 2011, a different driver reported that the brakes couldn't stop the car, which went through a red light and around two cars, reaching 70 mph (112 kph) before the driver put it in park and turned it off.

"Wow. The scariest thing I have ever experienced," the driver wrote. "If there was heavy traffic someone would have been killed, no doubt in my mind."

NHTSA said in the documents that it began investigating to assess the scope, frequency and safety-related consequences of the problem.

Reuters and the Associated Press contributed to this report.

And then there were ... more. The number of U.S. auto dealerships grew in 2011 for the first time in years.

It’s become a seeming fact of life that the number of U.S. auto dealers will steadily decline each year – with massive cuts during the industry’s recent downturn — but 2011 saw an unexpected turnaround with the dealer count actually rising for the first time in years.

New research also suggests that if the automotive recovery remains on track, 2012 could be the best year on record for American automotive retailers from a sales per showroom standpoint.

Research firm Urban Science reports the number of dealerships actually increased last year after two years of significant attrition. As of Dec. 31, 2011, there were 17,767 dealerships in the U.S., a 0.6 percent increase from 17,659 in 2010.

In a “normal” year, there is a 2 percent decline in the number of dealerships, making the rise quite significant, said Urban Science vice president John Frith.

The two largest contributors to the turnaround were Fiat, which added 135 dealerships in 2011, and Chrysler-Dodge-Jeep, which added 50 dealerships. Other OEMs also added retailers, but in smaller amounts.

On a state level, the largest increase occurred in California where 31 new dealers opened for business, In addition, New Jersey gained 10 dealerships while Ohio and Florida added nine each, and Texas added eight, according to Urban Science’s figures.

At the same time, there were a total of 29,380 franchises as of Dec. 31, 2011, a 2.4 percent decline from the 30,098 in 2010. This decline is attributed mostly to the final stages of phase-out of Ford Motor Co.’s Mercury brand last year.

(The majority of dealers now represent two or more brands, which is why there are more franchises than dealerships.)

“We have a stabilized, right-sized dealership network that has increased year-over-year for only the second time since we started this census,” said Frith. “Automakers and dealers are in a good, profitable position. To maintain that momentum and keep profitability high, they will need to resist the urge to abandon the expense controls and processes instituted the past few years.”

Based on 2011 vehicle sales of 12.8 million, Urban Science’s analysis of throughput — the average number of sales per dealership — increased approximately 10 percent year-over-year to 719 in 2011, compared with 659 in 2010.

Urban Science estimates that if vehicle sales reach 14 million sales in 2012, average sales per dealer could reach an all-time high, pushing past the old record of 784 set in 2005.

“This year, the key issue for many dealers will be figuring out how to handle a continuing sales influx,” added Frith. “This will shift more focus on ensuring that dealerships are meeting the automakers’ standards for staff, space, facility upgrades, policies and procedures.”

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