Ford to upgrade, extend warranty on touch-screen system

LOS ANGELES (Reuters) - Ford Motor Co (F.N), the second-largest U.S. automaker, will upgrade its touch-screen entertainment and navigation system beginning next month as well as extend the warranty on the software by two years, a top executive said on Wednesday.

The MyFord Touch system has been criticized by analysts and users as too complicated, and analysts say these features are highly valued by prospective buyers. Ford has improved the voice recognition and navigation in what it calls "version 3.5" of the software, said Mark Fields, Ford's head of the Americas.

"We're thinking more and more like not only a car company, but a technology company," Fields said during a roundtable with reporters during the Los Angeles Auto Show.

On December 10, Ford will send out the upgrade to vehicle owners who do not have navigation, Ford spokesman Alan Hall said. Drivers with navigation will receive updates in January and owners of hybrids, plug-in hybrids and electric vehicles will be issued updates in the first quarter.

The automaker also extended the warranty on its MyFord Touch system to five years with unlimited miles, up from three years and 36,000 miles. The software on Lincoln brand vehicles will now be covered for six years with unlimited miles, up from four years and 50,000 miles, Hall said.

Ford launched its Sync software, which was jointly developed with Microsoft Corp (MSFT.O), in 2007. This software powers the MyFord Touch system, which Ford launched in 2010.

Entertainment and navigation systems are increasingly important to attracting car shoppers. Some 45 percent of car buyers said navigation systems that help drivers avoid traffic are very important to their purchase decisions, while 30 percent said the same of entertainment systems, according to a survey by IBM to be released soon.

But most of the systems offered now have been poorly reviewed. Consumer complaints about speed and ease of use of MyFord Touch prompted Ford to upgrade the system in March.

Ford's top executives, including Chief Executive Alan Mulally, received smaller cash bonuses for 2011 when Ford fell short of its quality goals partly because of glitches in the system. Ford also tumbled in Consumer Reports magazine's annual survey of reliability last month.

Ford has said it recognizes the problems in the MyFord Touch program and that consumers' satisfaction improved with the second update. (Reporting by Nichola Groom; additional reporting by Deepa Seetharaman in Detroit; editing by Matthew Lewis)