Ford aims to lead in AWD model sales
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Ford aims to lead in AWD model sales
5 more vehicles to have all-wheel-drive built in
May 21, 2006
BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER
Ford Motor Co. is rapidly executing a strategy that could make the Dearborn-based automaker the nation's leading provider of all-wheel-drive cars and crossovers -- and threaten Subaru's decade-old lock on the market for reasonably priced all-wheel-drive vehicles.
By 2007, Ford expects that it will sell half a million all-wheel-drive vehicles in the United States, or nearly a third of those sold today. The automaker will add the feature to five models this year, bringing the total number of cars and trucks with all-wheel-drive to 22.
"We could be a very dominant player very quickly," Brett Wheatley, a product marketing and strategy manager at Ford, told the Free Press in a recent interview. "We think this is going to give us a real competitive advantage."
The plan will bring all-wheel-drive to the company's Ford Fusion, Mercury Milan and Lincoln MKZ mid-sized sedans in August and to the new Ford Edge and Lincoln MKX crossovers this fall. Ford already offers it as an option in other vehicles, such as the Freestyle crossover and the Five Hundred full-sized sedan.
Ford, which lost $1.2 billion during the first three months of the year, is in the early months of a turnaround plan that will close 14 plants and eliminate 34,000 jobs. So far this year, Ford sales are down 3.9%.
But Ford's all-wheel-drive strategy could be a way to differentiate its vehicles and even give sales a healthy boost. All-wheel-drive models account for only about one-tenth of the U.S. new-vehicle market, but that's still about 10 times the number of gas-electric hybrid vehicles sold last year.
"I think it's a good strategy," said Joe Phillippi, president of AutoTrends Consulting Inc. in Short Hills, N.J.
Wheatley said the automaker is so serious about its plan that it is even considering branding its all-wheel-drive system with a unique name, as Audi has done with its quattro and Mercedes-Benz has done with its 4MATIC.
All-wheel-drive systems, which deliver power to all four wheels and usually cost between $1,500 and $2,500 as an option, are valued for driving off-road or in bad weather. About 80% of the vehicles sold with all-wheel-drive are trucks.
However, the feature is becoming increasingly popular in cars and crossovers, especially in luxury brands, because of the superior traction, handling and connection to the road that it provides in everyday driving conditions.
Gas prices a factor
The timing for Ford's big move into all-wheel-drive, experts said, couldn't be better.
As concerns over rising gas prices have grown, droves of drivers have been moving out of big SUVs and into cars and crossovers, which often look like SUVs but are more fuel-efficient and built on car underpinnings.
Ford and other experts who study the automotive market say that many of these customers have been asking for the four-wheel-drive or all-wheel-drive systems that often came in their SUVs, even though they are slightly less fuel-efficient.
Drivers lose about 1 to 1.5 miles per gallon in fuel economy when they choose an all-wheel-drive system, largely because the added mechanical system adds weight to the vehicle.
To catch this post-SUV wave, Detroit-based General Motors Corp. and Auburn Hills-based Chrysler Group are also adding all-wheel-drive as an optional or standard feature in some cars and crossovers.
GM will launch its Saturn Outlook crossover this year with an all-wheel-drive option. At Chrysler, the feature is being offered in the Chrysler 300 sedan, Pacifica crossover and 2007 Dodge Caliber compact car.
Steve Bartoli, Chrysler's vice president for product planning, said Friday that he expects 10%, or 200,000, of Chrysler's annual U.S. sales will be of vehicles with all-wheel-drive systems by 2012. Only 4% of Chrysler's sales last year were all-wheel-drive.
However, Bartoli also cautioned that there might be significant counterbalances to that growth, such as fuel efficiency concerns and population shifts to warmer climates, which could reduce demand for such systems.
Dave Roman, a spokesman for GM, would not divulge the automaker's all-wheel-drive targets, calling them proprietary. Still, he noted, "we absolutely see there's more interest."
The AWD leader
Subaru's vice-president of marketing, Rick Crosson, said Thursday that he isn't threatened by Ford's new strategy.
He said that Subaru hasn't had much competition in the lower-price end of the all-wheel-drive market since 1996, when it decided to sell all-wheel-drive vehicles exclusively.
Ford, Crosson said, might even help Subaru educate the public on the value of all-wheel-drive systems.
Most cars on the market have two-wheel drive systems, where power from the engine turns either the front or rear wheels of the car. In a front-wheel-drive vehicle, the rear wheels are largely pulled along for the ride. In a rear-wheel-drive vehicle, the front wheels are essentially pushed forward.
These systems have their shortcomings. That's why automakers offer electronic stability and traction control, which experts see as only a partial solution.
Many trucks have a feature that allows the driver to flip a switch or pull a lever to provide power on command to all four wheels, so the vehicle can get better traction or control when needed.
All-wheel-drive systems, however, provide power to turn all four wheels without requiring driver action -- a feature that gives drivers effortless traction control and superb handling.
Aiming at the middle
Ford thinks it can be the all-wheel-drive leader by zeroing in on an opportunity in the middle of the market.
About 1.6 million, or 10%, of the 17 million vehicles sold in the United States last year had all-wheel-drive systems, according to data from R.L. Polk & Co.
Subaru made nearly 196,000 of those vehicles, all of which were cars and crossovers priced between $18,295 and $37,695. Most of the other all-wheel-drive cars and crossovers sold were expensive, luxury models made by Audi, BMW, Cadillac, Mercedes-Benz, and Ford's own Volvo.
But Ford believes the demand for all-wheel-drive is about to skyrocket for vehicles that sell for under $35,000.
Michele Stephanoff, 60, of Warren is just one driver who illustrates the expected market shift.
When she went shopping to replace her Ford Explorer, there were two SUV features she didn't want to give up: cargo space and all-wheel-drive.
"I felt it was important," said Stephanoff, who bought a Ford Freestyle crossover with all-wheel-drive. "I don't know if I would have gotten it otherwise."
source : freep.com
May 21, 2006
BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER
Ford Motor Co. is rapidly executing a strategy that could make the Dearborn-based automaker the nation's leading provider of all-wheel-drive cars and crossovers -- and threaten Subaru's decade-old lock on the market for reasonably priced all-wheel-drive vehicles.
By 2007, Ford expects that it will sell half a million all-wheel-drive vehicles in the United States, or nearly a third of those sold today. The automaker will add the feature to five models this year, bringing the total number of cars and trucks with all-wheel-drive to 22.
"We could be a very dominant player very quickly," Brett Wheatley, a product marketing and strategy manager at Ford, told the Free Press in a recent interview. "We think this is going to give us a real competitive advantage."
The plan will bring all-wheel-drive to the company's Ford Fusion, Mercury Milan and Lincoln MKZ mid-sized sedans in August and to the new Ford Edge and Lincoln MKX crossovers this fall. Ford already offers it as an option in other vehicles, such as the Freestyle crossover and the Five Hundred full-sized sedan.
Ford, which lost $1.2 billion during the first three months of the year, is in the early months of a turnaround plan that will close 14 plants and eliminate 34,000 jobs. So far this year, Ford sales are down 3.9%.
But Ford's all-wheel-drive strategy could be a way to differentiate its vehicles and even give sales a healthy boost. All-wheel-drive models account for only about one-tenth of the U.S. new-vehicle market, but that's still about 10 times the number of gas-electric hybrid vehicles sold last year.
"I think it's a good strategy," said Joe Phillippi, president of AutoTrends Consulting Inc. in Short Hills, N.J.
Wheatley said the automaker is so serious about its plan that it is even considering branding its all-wheel-drive system with a unique name, as Audi has done with its quattro and Mercedes-Benz has done with its 4MATIC.
All-wheel-drive systems, which deliver power to all four wheels and usually cost between $1,500 and $2,500 as an option, are valued for driving off-road or in bad weather. About 80% of the vehicles sold with all-wheel-drive are trucks.
However, the feature is becoming increasingly popular in cars and crossovers, especially in luxury brands, because of the superior traction, handling and connection to the road that it provides in everyday driving conditions.
Gas prices a factor
The timing for Ford's big move into all-wheel-drive, experts said, couldn't be better.
As concerns over rising gas prices have grown, droves of drivers have been moving out of big SUVs and into cars and crossovers, which often look like SUVs but are more fuel-efficient and built on car underpinnings.
Ford and other experts who study the automotive market say that many of these customers have been asking for the four-wheel-drive or all-wheel-drive systems that often came in their SUVs, even though they are slightly less fuel-efficient.
Drivers lose about 1 to 1.5 miles per gallon in fuel economy when they choose an all-wheel-drive system, largely because the added mechanical system adds weight to the vehicle.
To catch this post-SUV wave, Detroit-based General Motors Corp. and Auburn Hills-based Chrysler Group are also adding all-wheel-drive as an optional or standard feature in some cars and crossovers.
GM will launch its Saturn Outlook crossover this year with an all-wheel-drive option. At Chrysler, the feature is being offered in the Chrysler 300 sedan, Pacifica crossover and 2007 Dodge Caliber compact car.
Steve Bartoli, Chrysler's vice president for product planning, said Friday that he expects 10%, or 200,000, of Chrysler's annual U.S. sales will be of vehicles with all-wheel-drive systems by 2012. Only 4% of Chrysler's sales last year were all-wheel-drive.
However, Bartoli also cautioned that there might be significant counterbalances to that growth, such as fuel efficiency concerns and population shifts to warmer climates, which could reduce demand for such systems.
Dave Roman, a spokesman for GM, would not divulge the automaker's all-wheel-drive targets, calling them proprietary. Still, he noted, "we absolutely see there's more interest."
The AWD leader
Subaru's vice-president of marketing, Rick Crosson, said Thursday that he isn't threatened by Ford's new strategy.
He said that Subaru hasn't had much competition in the lower-price end of the all-wheel-drive market since 1996, when it decided to sell all-wheel-drive vehicles exclusively.
Ford, Crosson said, might even help Subaru educate the public on the value of all-wheel-drive systems.
Most cars on the market have two-wheel drive systems, where power from the engine turns either the front or rear wheels of the car. In a front-wheel-drive vehicle, the rear wheels are largely pulled along for the ride. In a rear-wheel-drive vehicle, the front wheels are essentially pushed forward.
These systems have their shortcomings. That's why automakers offer electronic stability and traction control, which experts see as only a partial solution.
Many trucks have a feature that allows the driver to flip a switch or pull a lever to provide power on command to all four wheels, so the vehicle can get better traction or control when needed.
All-wheel-drive systems, however, provide power to turn all four wheels without requiring driver action -- a feature that gives drivers effortless traction control and superb handling.
Aiming at the middle
Ford thinks it can be the all-wheel-drive leader by zeroing in on an opportunity in the middle of the market.
About 1.6 million, or 10%, of the 17 million vehicles sold in the United States last year had all-wheel-drive systems, according to data from R.L. Polk & Co.
Subaru made nearly 196,000 of those vehicles, all of which were cars and crossovers priced between $18,295 and $37,695. Most of the other all-wheel-drive cars and crossovers sold were expensive, luxury models made by Audi, BMW, Cadillac, Mercedes-Benz, and Ford's own Volvo.
But Ford believes the demand for all-wheel-drive is about to skyrocket for vehicles that sell for under $35,000.
Michele Stephanoff, 60, of Warren is just one driver who illustrates the expected market shift.
When she went shopping to replace her Ford Explorer, there were two SUV features she didn't want to give up: cargo space and all-wheel-drive.
"I felt it was important," said Stephanoff, who bought a Ford Freestyle crossover with all-wheel-drive. "I don't know if I would have gotten it otherwise."
source : freep.com
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