Ford Motor Co. is counting on a leaner and greener makeover of its Explorer to find new buyers for a once hot-selling sport utility vehicle that powered the automaker’s profits a decade ago.At the peak of the SUV boom in 2000, Ford sold 445,000 Explorers in the United States, powering an earnings juggernaut that helped to finance an expansion into luxury brands such as Jaguar, Land Rover and Volvo.
Explorer sales averaged 412,000 per year from 1995 through 2003, but tumbled as consumers turned away from heavier truck-based SUVs in favor of better-handling and lighter “crossover” utility vehicles built on car frames.
U.S. sales of the Explorer dropped by more than a third in 2009 to just over 52,000.
Once a cash cow for Ford, the Explorer is now outsold by new entrants like the Chevrolet Traverse, a 3-year-old crossover from General Motors Co. that offers segment-leading fuel economy.
Ford managers say they recognized that they had a problem when they set out to redesign the Explorer.
“Right now six out of 10 who own an Explorer defect to another brand,” said Amy Marentic, Ford’s car, crossover and SUV marketing manager. “We want to switch that around and keep all of those customers like we used to in the early to mid-1990s.”
Customers are migrating from the Explorer because “the product isn’t fresh,” she said. “They are looking for a modern up-to-date vehicle with better fuel economy.”
The new Explorer, set for production in the fourth quarter, is underpinned by a modified version of the car platform used for the Ford Taurus and Lincoln MKS. The vehicle will be built at the same assembly plant in Chicago as those sedans.
Ford expects an improved ride, sharper handling and at least a 25 percent improvement in fuel economy over the Explorer’s current 14 miles per gallon in city driving and 20 mpg on highways.
Some of that improved efficiency will come from better standard engines, an optional turbocharged engine, new six-speed transmissions and better aerodynamics.
The vehicle will retain many of the capabilities of a traditional SUV, with three rows of seats for up to seven adults, and the ability to tow a 19-foot boat.
LOTS OF CHOICE, LOTS OF COMPETITION
The new Explorer, which Ford began to unveil this week in pictures posted on Facebook and briefings for reporters and analysts, will hit a crowded part of the U.S. auto market.
Since 2000, the number of utility vehicles in the U.S. market has doubled to 100, including small to large sport utility vehicles and crossovers.
The Explorer will compete against the Honda Pilot, Toyota Highlander, Jeep Grand Cherokee, Chevy Traverse and GMC Acadia.
“We are recognizing the realities for a need for a product that is mid-size and where there are more competitors in the marketplace,” Ford U.S. sales analyst George Pipas said.
Ford, which expects a solid profit this year after avoiding the government-supported bankruptcies that engulfed rivals GM and Chrysler last year, does not expect the Explorer to deliver the kinds of sales it had in its peak years.
Analysts said Ford will count the redesigned Explorer as a success if it reverses the trend of owners switching out of the Ford brand for rival vehicles.
“The Explorer is a very important launch for them,” Autoconomy.com analyst Erich Merkle said.
Ford is investing $400 million to support Explorer production at its Chicago assembly plant and a nearby stamping plant. It is adding a second shift of 1,200 workers at the assembly plant to build the Explorer.
