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A Lot Is Riding on New SUVs

Autos: GM vehicles aim to challenge market leader Ford and its redesigned Explorer in key sales segment.

March 30, 2001|TERRIL YUE JONES | TIMES STAFF WRITER

DETROIT — As Ford Motor Co. this week carries out the crucial launch of its 2002 Explorer, the country's best-selling sport-utility vehicle but target of much bad publicity, General Motors Corp. is unleashing its own stable of redesigned Explorer-fighters.

The Chevrolet TrailBlazer, GMC Envoy and Oldsmobile Bravada--also coming out as 2002 models--are aimed not only at the Explorer, but also at the kind of customer GM wants most: affluent, younger buyers.

Both Ford and GM, as well as a host of other auto makers, are counting on Americans' continued love affair with SUVs to support this keenly competitive--and profitable--market segment.

Industry executives and analysts agree that although the overall U.S. market for vehicles will shrink somewhat this year, SUVs will remain hot sellers. But with increasing competition from imports, the rivalry to win new customers will be intense.

"GM has under-performed in the very important sport-utility industry," acknowledged Paul Ballew, GM's head of market and industry analysis. "Ford has handily beaten us with the Explorer, and Chrysler has outperformed with the [Jeep] Grand Cherokee and [Dodge] Durango."

Although SUVs now account for about 20% of overall auto industry sales, GM has grabbed only about an 18% market share the last couple of years. GM commands about a 30% share of the overall truck market.

The launch of the new Explorer is a crucial one for Ford. The company is coming off a low point in public perception because of last year's recall of Firestone tires, hundreds of which lost their treads and caused the Explorers on which they were mounted to spin out of control and roll over, resulting in hundreds of deaths and injuries.

For Ford to continue to rule the mid-size SUV segment, it will have to persuade buyers that the new Explorer is safer and more versatile. Among the 2002 model's new design features: The center of gravity has been lowered, lessening the possibility of a rollover; the bumpers are lower to reduce damage to other cars in collisions; and there is an optional fold-down third row of seats.

Ford, however, does not plan to stress safety in its advertising. "We've emphasized safety since the day the Explorer was introduced" in 1990, said Doug Scott, Ford's SUV group marketing manager.

"Eighty-five to 90% of owners said they would buy another Explorer without Firestone tires," said Al Giombetti, Ford's chief marketer for SUVs and trucks.

In response to the Firestone tire problems, Ford now offers Explorer buyers a choice of Michelin, Goodyear or Firestone tires. But Rebecca Lindland, an auto industry analyst with Standard & Poor's, doesn't share Ford's optimism. "Ford is tainted with the 'unsafe' mark, while GM is seen as dealing more with quality questions," she said. "Ford has a longer row to hoe in the public perception."

The new Explorer is also crucial to Ford because of a series of recalls and delays in launching the smaller Ford Escape SUV and its sister, the Mazda Tribute.

Nevertheless, Ford sold more than 445,000 Explorers last year, a record, compared with about 336,000 for the Chevy Blazer, GMC Jimmy (as they were known until this year) and Olds Bravada.

GM will attempt to win customers by emphasizing the larger dimensions of this new generation of light trucks and the brute power of the lineup: the standard inline-6 engine in the new SUVs puts out 270 horsepower, considerably more than the Explorer's standard 210-hp V-6 and even more than the Explorer's optional 240-hp V-8.

"So we get the power of a V-8 with the fuel economy of a 6-cylinder," said Brian Fjeldsted, deputy brand manager for the Envoy, which will start at about $28,800.

Chevy TrailBlazer prices begin at $25,755 and the Olds Bravada at $32,235. Prices for the new Explorer range widely, depending on options, from $24,620 to 32,690.

Overall, SUVs are expected to show hefty sales growth this year despite the slowing economy and uncertain consumer confidence.

The sport-utility market segment, about 3.4 million vehicles, or about 20% of the overall U.S. market last year, is expected to expand to 4 million vehicles by 2006, or 24.5% of the market. That will make it easily the biggest market segment, according to industry consultant J.D. Power & Associates.

Luxury SUVs also are expected to proliferate, with the market burgeoning from 254,000 units sold in 1998 to more than 600,000 in 2004, said Susan Docherty, brand manager for the Cadillac Escalade SUV. BMW, Cadillac, Infiniti, Lincoln, Mercedes-Benz, Porsche, Saab and Volvo are all planning to introduce new luxury sport-utilities in the next few years.

Among lower-priced SUVs, Isuzu, Saturn and Volkswagen are planning new entries, and most other Japanese car makers are expected to bring new models to market as well. Toyota especially, now with five SUVs, is making a big push.

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