Ford America to hunt profits with large-SUV offensive

Blue Oval is chasing consumers who want bigger vehicles and more comfort

19 March 2019 - 13:23 By Reuters
Ford America is challenging rivals in the big-SUV market. With petrol relatively cheap, US consumers are paying premium prices for large SUVs that seat eight people and can tow a four-ton trailer.
Ford America is challenging rivals in the big-SUV market. With petrol relatively cheap, US consumers are paying premium prices for large SUVs that seat eight people and can tow a four-ton trailer.
Image: Supplied

Ford Motor says it will boost US production of its largest sport utility vehicles in a move to grab profits in a market where consumers favour larger, more comfortable vehicles.

Ford's truck plant in Louisville, Kentucky, will increase the production rate for Ford Expedition and Lincoln Navigator sport utility vehicles by 20% in July – the second 20% increase in a year for both models, executives told journalists on Monday.

The move highlights Detroit carmakers' aggressive efforts to capitalise on popular, profitable large vehicles in America's heartland, even as policy makers in California, China and Europe push for smaller, electric vehicles to reduce carbon dioxide emissions linked to climate change.

The Trump administration, however, has proposed freezing US fuel efficiency standards - a decision that would make it easier for car makers to sell large SUVs and pickup trucks.

With petrol relatively cheap, US consumers are paying premium prices for large SUVs that seat eight people and can tow a four-ton trailer.

The average transaction price of a new Ford Expedition is $62,700 (about R900,000), Ford US marketing director Matt VanDyke said. This is up $11,700 (R170,000) from the previous year. Ford does not disclose profits by model line.

Average prices for the luxury Navigator rose to $81,000 (R1.16m) in February from $78,000 (R1.12m) a year earlier, according to Lincoln data.

In January, Ford said transaction prices across its US model lines averaged $38,400 (about R550,000), above the $34,000 (about R490,000) industry average.

General Motors, which dominates the North American large SUV segment, will launch a new generation of its large SUV Chevrolet Suburban and Tahoe, and GMC Yukon models later this year. Fiat Chrysler Automobiles last month said it would re-enter the large-SUV segment with new models due out in late 2020.

Ford workers and engineers redesigned portions of the Kentucky Truck assembly line to allow for the latest increase, Ford North American manufacturing chief John Savona said.

For the first time, he said, workers at certain stations will be positioned at two levels - some in pits and some on platforms - to install parts on upper and lower sections of a vehicle in unison.

The redesigned Expedition and Navigator assembly system requires 550 additional workers, and those jobs will be filled by workers currently at Ford's Louisville assembly plant, which builds small Ford Escape and Lincoln MKC SUVs, Savona said.

Ford invested $925m to build the new-generation Expedition and Navigator SUVs at the Kentucky plant. The car maker is pushing for market share in a segment it largely surrendered to rival GM over the past decade.

Since launching its new big SUVs, Ford has improved its share of the US large SUV segment by 5.6 percentage points, Ford's VanDyke told reporters on Monday.

But GM still commands a 70% share of a market where vehicles sell for more than double the average price of a mid-size sedan. Ford on Monday night launched a marketing campaign to win over customers. Their slogan: "Built to be a better big."


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