This Little SUV Is a Big Deal for Ford
Way back in the 1990s, the SUV was king - and back then, Ford was one of the biggest beneficiaries.
Ford's Explorers and Expeditions, and its big and plush Lincoln Navigators, were among the top-selling SUVs of the time.
Those SUVs made a lot of money for Ford. But when gas prices rose and consumers' tastes shifted back to more fuel-efficient cars, the company found itself in a lot of trouble. It had neglected that part of its lineup, its customers went to other brands -- and Ford found itself on the brink of bankruptcy.
Nowadays, Ford has a great lineup of fuel-efficient cars, and they've proved to be quite popular. But once again, the company is betting that SUVs could be a winning proposition.
This time, though, Ford's SUVs are a lot different from the behemoths of old. In fact, one of its biggest stars might be that little orange vehicle in the picture.
A new generation of SUVs has made Ford a leader again
Ford still makes the Expedition and Lincoln Navigator, though they're among Ford's oldest designs and only sell in tiny numbers nowadays. And today's Ford is far from dependent on SUV sales, with vehicles such as the Focus and Fusion posting big sales gains around the world. But for all that, Ford is still America's SUV sales leader, thanks to its modern line of smaller, more fuel-efficient utilities.
The compact Escape, all-new last year, has been a big sales success for Ford, just as the drastically overhauled Explorer has been since its launch early in 2011. Both are more plush and more fuel-efficient than their predecessors, and both have found plenty of eager customers -- and generated significant profits for Ford.
Meanwhile, the Edge, which is in between the Escape and Explorer in terms of size and price, has been a consistent steady seller for several years. It's expected to receive a major revamp next year.
Now, though, Ford's SUV ambitions are global. And its Ford's smallest SUV -- one so small Ford doesn't even sell it here -- that could be its biggest global star.
SUVs are one of the world's hot growth trends -- and Ford is moving to take advantage
Speaking to reporters at a presentation on Wednesday, Ford sales chief Jim Farley said that the company is seeing an "explosion" of consumer interest in the utility segment in markets around the world. As Ford has now moved to a "global portfolio," Farley said, where it can quickly launch core models in new markets, the company is in a great position to jump on this emerging trend -- and that's exactly what it's doing now.
Ford's "global" SUV lineup includes the familiar Explorer, Edge, and Escape, as well as a smaller (think Fiesta-sized, only taller) "B-sized" SUV called the EcoSport.
Originally developed for the Brazilian market, the EcoSport offers trim and features that would seem very familiar to American Ford customers -- and it's proving popular in more and more places, introducing the Ford brand to legions of brand-new customers.
Ford is rolling these SUVs out now to customers around the world. The Escape (which is called the Kuga, its European-market name, in most overseas markets) was just launched in China in February and has already sold more than 20,000 units.
Next up in China is the EcoSport, which looks set to be a huge hit for Ford around the world. Small utilities are the fastest-growing vehicle segment globally, Ford says, and Ford cited data from analytics firm IHS Automotive suggesting that Ford's small-utility sales growth was likely to outpace the industry average, powered in big part by the EcoSport in places such as China and India.
The EcoSport is also coming to Europe, part of Ford's plan to expand its product line in the region. Europe's auto market has of course been hammered by deep recessions, with sales near two-decade lows -- but SUVs are the one (and only) market segment that has shown growth since 2005. The EcoSport will join the all-new Kuga, and the Explorer -- which just went into production in Russia.
An opportunity created by Ford's global strategy
To some, it might seem jarring that Ford, which has spent the past few years rebranding itself as a maker of high-quality, fuel-efficient vehicles, is moving to be a big global leader in SUVs.
But in truth, this is one of the opportunities offered by the company's "One Ford" approach, under which it has created a single, focused lineup of products based on a small set of common platforms that can be put into production quickly around the world.
Ford's strong global SUV lineup is just one of several good reasons to think that the Blue Oval still has big growth opportunities ahead. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.
The article This Little SUV Is a Big Deal for Ford originally appeared on Fool.com.Fool contributor John Rosevear owns shares of Ford. Follow him on Twitter at @jrosevear.The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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