Crossover Sales Disappoint Detroit

[ironhorse]

Unrealistic expectations? Ford has to replace lost volume...if they can replace volume with crossovers,more power to them...but it ain't happening.

[NickF1011]

Unrealistic expectations? Ford has to replace lost volume...if they can replace volume with crossovers,more power to them...but it ain't happening.

 

NOBODY is replacing lost volume right now. It leaves, it's gone. The entire market has shrunk. In a contracting market, the only thing you can hope to do is increase you market share. To that effect, Ford has been successful in the CUV/SUV arena as of late.

[akirby]

Ford has to replace lost volume.

 

No, they don't. That's part of the unrealistic expectations. Ford needs to make money at whatever volume the market will bear. They don't want one vehicle that sells 400K - they'd rather have 2 that sell 200K each, preferably made on the same flex line so that production can be matched to demand.

 

There are far too many competent auto mfrs and models out there today - orders of magnitude more than 20 years ago.

 

Ford needs a balanced portfolio of vehicles across the entire lineup, and they all need to be profitable at market demand volumes. That's why global platform sharing and engineering is so important.

 

Without crossovers, Ford would have 20% less volume and they'd be losing customers to other brands. If nothing else they keep Ford customers in Ford products where they are much more likely to buy another Ford.

 

They may be disappointed that crossovers aren't doing better, but that doesn't mean they're doing badly. If they were down 50% like large trucks then I might be worried.

[NickF1011]

No, they don't. That's part of the unrealistic expectations. Ford needs to make money at whatever volume the market will bear. They don't want one vehicle that sells 400K - they'd rather have 2 that sell 200K each, preferably made on the same flex line so that production can be matched to demand.

 

Well, that's not quite right.

 

Ford would leap at the chance to have another 400,000 unit vehicle ONLY if it was built at a profit.

 

IF it couldn't be done at a profit, they'd be more happy selling several lower volume vehicles that WERE profitable.

 

It's all about profits. They'd sell a 400,000 unit vehicle if it could make money. It would be simpler than producing several different vehicles to reach the same end. The problem is, there really isn't much room left in the market for a 400,000 unit vehicle that could be sold at a profit.

[akirby]

Well, that's not quite right.

 

Ford would leap at the chance to have another 400,000 unit vehicle ONLY if it was built at a profit.

 

IF it couldn't be done at a profit, they'd be more happy selling several lower volume vehicles that WERE profitable.

 

It's all about profits. They'd sell a 400,000 unit vehicle if it could make money. It would be simpler than producing several different vehicles to reach the same end. The problem is, there really isn't much room left in the market for a 400,000 unit vehicle that could be sold at a profit.

 

Poor choice of words. They're not planning for one vehicle to sell 400K units, but I'm sure they wouldn't turn down the sales. However, the production capacity to make 400K vehicles (i.e. more than one plant) has consequences that I'm sure impact profits. That's why I don't necessarily think it's a good idea to increase CD3 production beyond Hermosillo yet even if the 2010 models start pushing the 300K limit. In this case I think it's better to have 300K from one fully utilized plant selling for maximum retail profits than to open a new plant just to make 400K and have to drop transaction prices or increase fleet sales.

 

It's the old "don't put your eggs in one basket" theory - it's burned them before.

[NickF1011]

Poor choice of words. They're not planning for one vehicle to sell 400K units, but I'm sure they wouldn't turn down the sales. However, the production capacity to make 400K vehicles (i.e. more than one plant) has consequences that I'm sure impact profits. That's why I don't necessarily think it's a good idea to increase CD3 production beyond Hermosillo yet even if the 2010 models start pushing the 300K limit. In this case I think it's better to have 300K from one fully utilized plant selling for maximum retail profits than to open a new plant just to make 400K and have to drop transaction prices or increase fleet sales.

 

It's the old "don't put your eggs in one basket" theory - it's burned them before.

 

Worded that way, I completely agree with you.

[silvrsvt]

Even though they aren't nearly as capable a new Explorer, properly optioned, can take the family off road but a Flex cannot.

 

You have to be kidding me, better then 95% of SUV's never seen dirt under their wheels.

 

There isn't a big demand for taking a family of 4 four wheeling...

[NickF1011]

You have to be kidding me, better then 95% of SUV's never seen dirt under their wheels.

 

There isn't a big demand for taking a family of 4 four wheeling...

 

Most of the "offroading" a new SUV will ever see is a gravel overflow parking lot at the mall. My lowered Mustang can even handle that much.

[F250]

You have to be kidding me, better then 95% of SUV's never seen dirt under their wheels.

 

There isn't a big demand for taking a family of 4 four wheeling...

 

No, genius, I'm not kidding. There is no way for you to know what percentage of owners of off road capable vehicles actually have driven them off road. I have been since I bought my first 4WD, an old ex Back Bay Wildlife Refuge '72 IH Scout in the early '80s. I still occasionally go off road on the Outer Banks but unfortunately there are so many people doing it that it's become too crowded and the enviromental groups have had sections of the beach including Cape Point at Hatteras closed.

 

 

LINK

LINK

LINK

 

Driving off road on the Outer Banks has become too popular. When I started 27 years ago you could drive for miles on the beach before you saw another truck or person, now it's like a parking lot in some areas during the summer.

Edited August 6, 2008 by F250

[BORG]

CUVs, like SUVs, are not purchased to haul families and are generally considered negotiable luxuries. Minivans, a comparatively stable market, are bought for the purpose of hauling families exclusively. I think the Flex is designed to appeal to both type of consumers.

 

Overall, CUVs now have far less potential consumers as consumers tighten their belts. Once the economy recovers, this may change once again.

[RichardJensen]

Minivans, a comparatively stable market

:rolleyes:

 

minivan sales have been falling for some time.

 

minivan market share is also slumping.

 

Consider: Ford axes the Freestar & Monterey. Do other minivan mfrs. see a boost in sales equal to the dropped volume at Ford? No they do not. People are leaving the segment.

 

The only 'stable' segment, IMO, is midsize sedans.

[TomServo92]

:rolleyes:

 

minivan sales have been falling for some time.

 

minivan market share is also slumping.

 

Consider: Ford axes the Freestar & Monterey. Do other minivan mfrs. see a boost in sales equal to the dropped volume at Ford? No they do not. People are leaving the segment.

 

The only 'stable' segment, IMO, is midsize sedans.

 

Minvan sales tank

 

But even before the economy took its toll, families were migrating away from minivans. U.S. minivan sales peaked at 1.37 million in 2000, 17 years after Chrysler introduced them. They've been falling at a steady rate since then, to 793,335 last year. This year, sales are expected to fall below 650,000 for the first time since 1986.

Edited August 6, 2008 by TomServo92

[NickF1011]

:rolleyes:

 

minivan sales have been falling for some time.

 

minivan market share is also slumping.

 

Consider: Ford axes the Freestar & Monterey. Do other minivan mfrs. see a boost in sales equal to the dropped volume at Ford? No they do not. People are leaving the segment.

 

The only 'stable' segment, IMO, is midsize sedans.

 

Not to mention there are no planned replacement for all of GM's minivans when they are gone either.

[Surgen]

CUVs, like SUVs, are not purchased to haul families and are generally considered negotiable luxuries. Minivans, a comparatively stable market, are bought for the purpose of hauling families exclusively. I think the Flex is designed to appeal to both type of consumers.

 

Overall, CUVs now have far less potential consumers as consumers tighten their belts. Once the economy recovers, this may change once again.

 

CUVs are significantly outselling Minivans. And Minivans have been on the decline for years.

[timmm55]

Crossover vehicles, car-based wagons designed to look and function like SUVs but with modestly better fuel economy........

 

There is the Crossover problem today....only modestly better MPGs. It may have been enough last year, but not now.

[akirby]

Crossover vehicles, car-based wagons designed to look and function like SUVs but with modestly better fuel economy........

 

There is the Crossover problem today....only modestly better MPGs. It may have been enough last year, but not now.

 

I don't call 3-4 mpg better "modestly better".

 

I was getting 15 mpg in a 2003 Aviator, now I'm getting 19-20 from a 2008 Edge. If you're driving 300 miles per week the cost for the Aviator last year at $3.00/gallon is $60. The cost today for the Edge at $4.00/gallon is $63.

 

Unless gas goes back to $5 you can trade down from a SUV to a CUV and keep your fuel cost close to the same as it was a year ago - maybe even cheaper since gas is below $4 here now.

 

This is nothing more than a panic, knee-jerk reaction to go from Expeditions and Explorers to small 4 cylinder cars.

[timmm55]

I don't call 3-4 mpg better "modestly better".

 

I was getting 15 mpg in a 2003 Aviator, now I'm getting 19-20 from a 2008 Edge. If you're driving 300 miles per week the cost for the Aviator last year at $3.00/gallon is $60. The cost today for the Edge at $4.00/gallon is $63.

 

Unless gas goes back to $5 you can trade down from a SUV to a CUV and keep your fuel cost close to the same as it was a year ago - maybe even cheaper since gas is below $4 here now.

 

This is nothing more than a panic, knee-jerk reaction to go from Expeditions and Explorers to small 4 cylinder cars.

 

 

Perhaps. But I think there is a fundamental change in middle America's views on what is "good gas mileage"...and if ain't getting 30MPG or better, nobody will notice.

Not that the Flex or Edge's gas mileage is bad, it's actually pretty good for it's abilities. Also note that the competitiors MPGs are the same or worse.......AND they aren't selling a whole lot of them either even with Honda or Toyota badges.

Edited August 7, 2008 by timmm55

[EMDEE]

Something I think everyone is overlooking: the main thing people are doing is keeping what they've got. Sales are down, period, largely because of uncertainty over the economy. Many people who larger, less economical vehicles may have considered trading down but quickly calculated that they'd have to save a huge amount of gas before it would make up for loss in resale value and the cost of a buying a new vehicle. For many, even buying a small hybrid will only break even after many years. Therefore, the easiest and often most economical decision now is to sit tight for a while. Rushing from an Expedition or Navigator to a Focus is not going to be a very satisfying move. People have grown accustomed to some really impressive large, luxury vehicles that only incidentally have modest off-road capabilities. Squeezing a family of five or six, with bigger kids into a small sedan or little station wagon is just not going to happen. For now, I think a lot of people are just toughing it out, maybe driving less when possible. Crossovers and even SUVs will survive. They just need lighter construction and more economical engines, whether diesels, EcoBoosts or hybrids. They are still a very attractive choice to a lot of people, just not a hot item at this moment. There's a certain percentage of people who never needed them in the first place, buying them for image, and maybe those are the main folks who are panicking or rushing into compacts.

[rmc523]

When I went to check out a Flex at a local dealer, I commented on a few design flaws (IMHO) to the salesman. He informed me that Ford will be updating the Flex "sooner than the next model year." He may have just been trying to smooth me but he said it's what the factory reps told their staff.

 

May I ask what design flaws you noticed/pointed out?

 

One I noticed that bothers me is the fact that the reverse sensors are not painted....it's a minor thing, I suppose, but I think it's inexcusable 1) on a new $40K (or lower models equipped with them) and 2) since other Ford vehicles have been painting the sensors for a few years now. I'm sure there are a few other minor things, but I can't think of them right now.