Ford hopes free driver‘s ed in Vietnam leads to sales

The cars idle at the starting line of an empty airfield that seems primed for racing. The engines start. And one by one, they take off — but with a steady glide rather than a screech of tires.

This is not an adrenaline-pumping driving school. But it's how Ford Motor (F) is hoping to turn a nation of bikers and walkers into safe drivers. By offering driver training, the American automaker wants to gain an edge over the competition — and increase its modest foothold in this nascent auto market.

Free driver training is "consistent with Ford's obligation to be a good corporate citizen," says Joe Hinrichs, Ford president of Asia-Pacific and Africa. But a benefit of the program is that "it provides a positive effect to the brand, and that's important."

While Vietnam's auto sales are the lowest of the major car markets in the Association of Southeast Asian Nations, it's the fastest-growing: From 2005 through 2009, annual car sales more than quadrupled to 144,500, according to J.D. Power, a market research firm. Last year, auto sales climbed in Vietnam even as sales dropped in other ASEAN markets —Indonesia, Malaysia and Thailand— amid the global economic turmoil.

An 'explosive cocktail' on the streets

With Vietnam's explosive auto growth comes more need for driver's education and safety standards in a country with sparse traffic lights and where most new cars are sold to first-time buyers. A motorcycle helmet law enacted in 2007 has reduced Vietnam's recent road deaths and injuries. Even so, every day, an average of 34 traffic accidents occur, killing 32 people and injuring 22 others, says Vietnam's General Statistics Office. (These are major accidents tracked by the government.) Accident rates are on the rise again in 2010 and are expected to surge along with cars on the road.

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VIDEO: A look at what it's like on Vietnam's roads

"As you start bringing more cars and trucks into the mix, you're going to have a lot more deaths and injuries to manage," says Tony Bliss, a road safety adviser for the World Bank.

As Vietnam's economy booms, the widening gap between the rich and the poor is producing a jarring sight on the streets: Families who can afford only one motorbike pile as many as five people aboard, while luxury cars whiz dangerously close by. The chaos — animal carts, pedestrians, bicyclists, motorcyclists and cars all compete for space on the roads — can make for an "explosive cocktail," notes Bliss, potentially resulting in severe injuries.

It's not just Vietnam's roads that are dangerous. Traffic accidents are becoming a bigger problem around the world as rapid income growth boosts car sales, and the number of first-time drivers. Even though low- and middle-income countries have less than 50% of the world's cars, they have more than 90% of the world's accidents, the World Health Organization says. In the Western Pacific region, which includes parts of Southeast Asia, road traffic injuries have become the leading cause of death for those between the ages of 15 and 44, says WHO.

"It's one of the dominant public health concerns," Bliss says.

At Ford's driving school in Ho Chi Minh City, more than 60 students, young and old, brave the sweltering heat to show up for a weekend driver's training session. The Ford instructor, Ngo Minh Quy Phong, takes them through concepts from buckling their seat belts to conserving gas and driving on flooded roads. Ford instructors also field questions, such as one from new driver Tran Quoc Vinh, 60, about how to know when to shift gears.

Before the session ends, students pile into cars —Ford cars, of course — with instructors, who take them on a slow drive around the military air base to practice the concepts they just learned.

Ford provides the driving program in seven countries, including Vietnam, China, Thailand and India, but plans to expand this year to South Africa and Australia and, in the near future, to reach 20 markets. Ford sells cars in all those countries.

Focus on family and safety

General Motors also offers a program in China that provides consumers in major cities with road safety education. These safe-driving programs will help "differentiate" American car companies and should resonate well in Asia, where consumers are highly focused on family and safety, says Michael Dunne, an auto consultant in Hong Kong.

Japanese carmakers dominate the car market in ASEAN countries, with American brands having only a "marginal" presence, says Mohit Arora, executive director of J.D. Power Asia Pacific.

In Vietnam, Ford — which has a joint venture with Song Cong Diesel Company — holds about 7% market share, well behind GM (which goes by GM Daewoo in Vietnam) and less than a third of the 25% share of market leader Toyota. Hinrichs says Ford's market share is related to "the amount of the products we have in the marketplace." Sales and market share should grow, he says, as more Ford products are introduced in Vietnam.

Ford's business will also increase if it can convince consumers like Tran, who attended the driver's training, that the brand stands for quality and safety. "Ford cars have many strengths and weaknesses," says Tran, who owns a Ford Everest. "But when I see the improvement in Ford's service, I believe (the company) can grow in this market."