When Ford unveiled the 2011 Explorer last week, it was hard to say what was the bigger surprise—that the company hauled several tons of dirt, rocks and trees into the heart of New York City for the big reveal, or that anybody even cared. The rugged truck that kicked off the SUV craze in the 1990s has fallen on hard times amid the recession and steep pump prices. Over the last decade, sales have evaporated, tumbling a whopping 88 per cent, from 450,000 to just 52,000 last year. Yet, when the redesigned and retooled Explorer rolled down a makeshift hill outside Macy’s department store, it triggered gushing praise from analysts, investors and prospective buyers. And it was the clearest sign yet the turnaround at Ford has kicked into high gear.
In many ways, the new Explorer is an SUV in name only. It still resembles a sport utility vehicle—it’s roughly the same size as the previous Explorer, the V6 version offers more horsepower than the previous model and it can still tow a 5,000-lb. load. But everything about the way the 2011 Explorer is constructed points to it being a crossover. The vehicle’s unibody design, in which the body and frame are welded together as a single unit, shares more in common with the Ford Taurus car than with the company’s line of body-on-frame pickups. That has helped make the Explorer lighter and more fuel-efficient.
The real break with the Explorer’s gas-guzzling past is the introduction of an optional smaller EcoBoost engine. The company claims the turbocharged, direct-injection four cylinder engine will offer all the power of the larger V6 version, yet use 30 per cent less fuel than the outgoing 2010 Explorer. Ford even claims the fuel savings put the four cylinder Explorer in line with the Toyota Camry V6 sedan. “This is really the game changer for us,” says Rick Gemin, production manager for SUVs and crossovers at Ford Canada. “You’ll see V6 performance out of that engine, but we’re gearing it to the family that wants utility and to maximize fuel economy.”
Perhaps the most stunning news from the Explorer launch, though, was that Ford wants buyers to actually pay more for the smaller, less powerful engine. The company hasn’t disclosed how big the premium will be, but said the base prices for the various V6 models range from US$28,995 to US$37,995. (Gemin says pricing hasn’t been set in this country yet.)
One obvious reason Ford wants to charge more for the smaller engine is that it’s invested heavily for several years developing the EcoBoost technology. But with wild swings in the price of gasoline, the company feels it can put a premium on fuel mileage the same way it once charged more for bigger engines.
But the move is also a sign Ford’s management has achieved a level of self-confidence that’s been sorely lacking among the Big Three domestic automakers for years. After nearly tumbling into bankruptcy in 2006, Ford mortgaged every asset it had to raise financing for a turnaround. At the same time, Ford went outside the company to hire former Boeing senior executive Alan Mulally to lead the effort. By getting an early jump on its troubles, Ford was also able to shun bailout money from the U.S. and Canadian governments during the financial crisis, unlike GM and Chrysler, which still carry the stain of being wards of the state. With a string of successful vehicle launches, rising market share and five profitable quarters in a row—in its most recent quarter Ford earned US$2.6 billion—the Explorer launch is seen as extending that momentum. “Beyond all the numbers and financials, it’s the mental and psychological perception of Ford that’s playing to their benefit,” says Karl Brauer, senior analyst at Edmunds.com.
Not everyone is thrilled with the changes to the Explorer. The popular auto website Jalopnik trashed the new vehicle, saying it was targeted at soccer moms who are “[expletive] clueless about what makes a good SUV.” Meanwhile, one commenter on the Wall Street Journal website summed up the critics’ view: “This is nothing more than a sissy grocery-getter!”
Explorer traditionalists may be upset, says George Magliano, director of automotive forecasting in North America at IHS, but the fact is there were fewer and fewer of them every year. “At the end of the day, the thing isn’t selling,” he says. “Those people complaining about the new Explorer might be upset, but they weren’t out there buying the old version in any way, shape or form.”
In other words, Ford has finally clued in to what Explorer buyers want—a truck that lets them look like they scale sheer cliff walls on weekends, without having to mortgage their suburban homes each time they visit the gas pump.