Ford Goes Big for Small Cars, But It's Into Trucks Like the Explorer, Too

Last Updated May 27, 2010 6:00 AM EDT

The all-new 2012 Ford Explorer shows Ford (F) is hedging its big bet on a long-term consumer switch to small cars.

To be sure, the redesigned Ford Explorer won't come anywhere near the huge sales records the old Ford Explorer reached in the late 1990s and early 2000s, said George Pipas, U.S. sales analyst for Ford.

But even in a future where the growth will be in small cars, mid-sized SUVs will continue to be a sizable product segment, Pipas said in an NYC briefing this week. Other products in the segment include the Honda (HMC) Pilot and the Jeep Grand Cherokee.

Including cars and trucks, the mid-sized vehicle category -- which includes the Ford Explorer -- is expected to account for around 36 percent of the U.S. market in 2013. That's about the same as 2008. At the same time, small vehicles are expected to grow from 31 percent to 36 percent of the market, while large vehicles shrink from 33 percent to 28 percent.

"These (medium and large vehicles) are still large categories," he said. The new Ford Explorer goes on sale around January 2011.

But it won't be like the old days. From 1995 to 2003, U.S. sales of the Ford Explorer averaged 412,000 units annually, including a record 433,000 in 2002, Pipas said. In 2009, Ford Explorer sales were only 52,190, down 88 percent from the peak, according to AutoData Corp.

The new Ford Explorer will be different in a lot of ways. From a manufacturing perspective, it will be built on a global car platform, with some of the same underpinnings as the Ford Taurus sedan, the Volvo S80 sedan and the Ford Flex crossover. The new Ford Explorer will also have a four-cylinder engine option for the first time.

Building more models off a single platform saves Ford a lot of money in development and in buying parts.

The old Ford Explorer was built on a truck platform with a ladder-like frame underneath. From the customer perspective, the new Ford Explorer will be less capable off-road, but it will have better gas mileage, and better ride and handling on the highway. In short, the new Ford Explorer will be better suited for the way most people actually drive it, Pipas said.

Industry insiders would say the new Ford Explorer is a "crossover" and not an "SUV" per se, but I don't think most customers would make that distinction. The new Ford Explorer looks like an SUV, so I think customers will classify it as an SUV.

Ford probably debated whether even to call the new model the Ford Explorer but ultimately decided that the benefits of name recognition outweighed the burden of launching an all-new model name. A similar debate took place around the redesigned Ford Taurus, which is radically different from the old one.

It will be the burden of Ford marketing and advertising to let people know the new Ford Explorer is new and different from the old Ford Explorer, since after all the old model has fallen so far out of favor. But at least everybody who might be in the market knows what a Ford Explorer is, and that's half the battle.

Photo: Ford