Jalopnik: RWD Lincoln coming, and it's a crossover

[papilgee4evaeva]

I can't see how Ford can charge more for a driveline configuration: "New Ford Explorer, now with RWD standard!"

 

I can't see how Ford can charge more for the more expensive AWD configuration: "New Ford Explorer, now with more expensive to assemble and purchase AWD!"

 

And, in fact, I see RWD increasing the AWD take rate, which would further erode Ford's margins on the Explorer.

 

I mean, I can't imagine a possible scenario where Joe Customer spends a dime more on a Ford Explorer because it's got standard RWD. Maybe I'm just not creative enough.

 

The value in the RWD configuration isn't in the driven wheels themselves, but what powertrain configurations can come with them. Like, for example, a V8. Or a non-torque-limited 3.5EB.

 

Do people not opt for 4WD/AWD in South Dakota? When I lived in Maryland, almost every RWD-based model I saw -- sedan, coupe, SUV/CUV -- that had the option for AWD... came equipped with AWD.

 

So if AWD is an option and plenty more people opt for it than don't, there's got to be something said for that. In popularity as well as in amortization.

 

Much like MFT.

[Deanh]

 

Not when RWD/AWD is more expensive to implement than FWD/AWD

maybe thats another hurdle they have adressed, perhaps they have figured out a way to svae $ elsewhere and thus level costs out....

[Gnostic]

FWD Explorers will never sell.

[silvrsvt]

 

If only there were a platform on which they could build a less expensive, FWD, 3 row people mover to fill the void left by the (terrible, IMHO) "base" trim Explorers. Especially if Explorer was being recentered to where the bulk of its sales are coming from (Limited) and slotted up to compliment a new, class busting full size SUV... If only...

 

 

What? I'd like to know where your getting your info that most Explorer sales are Limited models...you can get a Nicely equipped Explorer for around $40K or so.

[RichardJensen]

FWD Explorers will never sell.

 

You never heard me say that.

 

Going D3 added value (better FE, more space, IIRC) and reduced cost.

 

It's that simple: "Does this add value? Do we have to do this?"

[PREMiERdrum]

 

I don't understand what you're saying.

 

Are you saying that Ford is going to have a 3-row Edge/S-Max, a 3-row Explorer and some other 3-row CUV, and the Expedition?

 

 

You aren't following.

 

I'm reading the tealeaves here. The bulk of Explorer sales are well equipped XLT models and Limited models. Is it that absurd to think that, for the next generation, they would want to tailor the product to these buyers?

 

Leaving a hole at the bottom of the current Explorer range (though the base models still start at $30), are they better suited to have a midsize 3 row entry (akin to the Sorento or Santa Fe 3 row), that could be either the S-Max or a 2 row Edge since the heavy lifting has already been done, engineering wise? The Flex is a goner anyway, so they have:

 

On the Ford side:

- C segment, 2 row crossover

- CD segment, 2 row crossover

- CD segment, 3 row crossover

- D segment, 3 row crossover

- Full sized, 3 row SUV

 

On the Lincoln side:

- C segment, 2 row crossiver

- CD segment, 2 row crossover

- D segment, 3 row crossover

- Full sized, 3 row SUV

[Deanh]

 

Well, if RWD costs Ford $x and they sell it for x+$50, they make $50.

 

If AWD costs Ford $y and they sell it for y+$100, don't they make more on the AWD version? Forget about amortization because that has nothing to do with the original statement about more people opting for AWD decreasing margins.

 

Explain how selling more of an option, an option that Ford makes more money on, decreases margins? So you are saying that Ford's margin on a 4x4 F150 is less than on a 4x2? Same scenario, right?

well based on the difference i got on an F-150 2wd vs 4wd being $4695...yep, you read it right $4695....dare I say they are making atad more than, and charging a tad more than $100...

[akirby]

For the record I never said that picture was the current GC and i was just using it to show that a unibody SUV didn't require the front driveshaft to go under the engine.

 

All of this is sheer speculation right now anyway.

 

But I will ask this question: could Lincoln sell a $60K Aviator based on a FWD/AWD max 350 hp luxury SUV? I don't think so.

 

What about all of the old BOF V8 Explorer fans? A RWD explorer would certainly bring them back even if it's small numbers.

 

RWD allows more powerful drivetrains (5.0 V8, unrestricted 3.5L EB and future engines).

 

It also lends itself to this rumored electric hybrid system.

 

I could also see the police vehicles moving to this new platform. And don't forget China and Australia.

 

I could see this replacing D3 altogether worldwide. At those volumes I can easily see the business case.

 

Or you can take RJ's position which is, basically, - this is stupid.

[silvrsvt]

 

You aren't following.

 

I'm reading the tealeaves here. The bulk of Explorer sales are well equipped XLT models and Limited models. Is it that absurd to think that, for the next generation, they would want to tailor the product to these buyers?

 

Leaving a hole at the bottom of the current Explorer range (though the base models still start at $30), are they better suited to have a midsize 3 row entry (akin to the Sorento or Santa Fe 3 row), that could be either the S-Max or a 2 row Edge since the heavy lifting has already been done, engineering wise? The Flex is a goner anyway, so they have:

 

Still doesn't make any sense...having a third row CD CUV is nearly pointless because you can't fit anyone in the third row that is over 10 years old. I know other manufactures offer them, but that third row is slightly pointless with the lack of space they have.

 

For crying out loud, a 2002 Explorer barely fits an adult in the 3rd row. I haven't tried the 3rd row on the D3 explorer so, I don't know how it is and I'm an outlier because I'm 6'2, so I don't fit the norm.

 

Are the XLT and Limited buyers really want a RWD vehicle? Given the not to small fact that most people don't give a crap which wheels are turning if they don't get AWD?

[RichardJensen]

 

Leaving a hole at the bottom of the current Explorer range (though the base models still start at $30), are they better suited to have a midsize 3 row entry (akin to the Sorento or Santa Fe 3 row), that could be either the S-Max or a 2 row Edge since the heavy lifting has already been done, engineering wise?

Several thoughts on that:

 

Ford 'recentering the Explorer' on the XLT/Limited volume sounds like a lot of talk that doesn't really have a lot of money tied up in it.

 

Is there any basis to infer that 'recentering' the Explorer at a higher price point mandates a much more expensive platform?

 

Isn't it fair to say that Ford has 'recentered' the Fusion at a significantly higher price point while reducing the cost of the platform?

 

And I would say that Ford's research on midsize preference for three rows either *has been* answered by the lack of a third row in the Edge or *will be* answered by import/local assembly of the S-Max (I'm still doubtful).

[papilgee4evaeva]

For crying out loud, a 2002 Explorer barely fits an adult in the 3rd row. I haven't tried the 3rd row on the D3 explorer so, I don't know how it is and I'm an outlier because I'm 6'2, so I don't fit the norm.

 

I'm 5'10". What you say applies to the current Explorer too. Heck, I tried to get back there and couldn't.

[RichardJensen]

For the record I never said that picture was the current GC and i was just using it to show that a unibody SUV didn't require the front driveshaft to go under the engine.

 

RWD allows more powerful drivetrains (5.0 V8, unrestricted 3.5L EB and future engines).

 

It also lends itself to this rumored electric hybrid system.

Or you can take RJ's position which is, basically, - this is stupid.

 

- The front drive shaft *does* go under the engine in that diagram. Basically the first cylinder.

 

- How can CAFE be reconciled with 5.0L V8s in Explorers?

 

- Ford already has an electric hybrid system.

 

- Again, adding cost without adding value is stupid.

[silvrsvt]

All of this is sheer speculation right now anyway.

 

But I will ask this question: could Lincoln sell a $60K Aviator based on a FWD/AWD max 350 hp luxury SUV? I don't think so.

 

What about all of the old BOF V8 Explorer fans? A RWD explorer would certainly bring them back even if it's small numbers.

 

RWD allows more powerful drivetrains (5.0 V8, unrestricted 3.5L EB and future engines).

 

It also lends itself to this rumored electric hybrid system.

 

I could also see the police vehicles moving to this new platform. And don't forget China and Australia.

 

I could see this replacing D3 altogether worldwide. At those volumes I can easily see the business case.

 

 

I'll start poking holes myself:

 

FWD based AWD can handle closer to 400HP...but given the fact that gas prices are what they are, outside of maybe 10-20K sales worldwide, is this really even necessary to have a vehicle this powerful?

 

BOF Explorer fans...thats a reach! LOL If anything the current market shows people don't give a fuck about which are the primary wheels are being driven.

 

Police vehicles...yeah they can do that, but its going to be a CUV based vehicle and not a sedan.

 

No one has a crystal ball about the Chinese market...its sure as hell not the same as the NA market. I don't see them clamoring for bigger cars like we have here because of taxes on larger displacement vehicles. I see vehicles like the Focus and below making up the lions share of the Chinese market for the next 10-15-20 years. The Australian market is tiny vs NA or China...the Falcon in recent years was lucky to come even close to sell 30-50K vehicles a year

[RichardJensen]

Could Lincoln sell a $60K Aviator based on a FWD/AWD max 350 hp luxury SUV? I don't think so.

 

As I've said before, more than once, the only way this makes sense is as a strictly Lincoln proposition. In order to avoid muddying the waters further, please don't raise this objection again.

[RichardJensen]

 

 

No one has a crystal ball about the Chinese market...its sure as hell not the same as the NA market. I don't see them clamoring for bigger cars like we have here

 

Not entry-level cars, but the rich love them some gigantic luxury cars.

 

I had thought it was strictly sedans, but I guess they've taken a shine to big ol' CUVs too.

 

If--in the same way that Fosters, Molson and LaBatts can be premium beers in *this* country--Lincoln can be premium in a country that has no unpleasant recollections of the Town Car, then this RWD Lincoln stuff makes sense.

 

But I just don't see what you gain by *replacing* US volume with RWD equivalents. Adding US volume? Absolutely, even if it's just so much gravy, but replacing it? No way.

Edited October 8, 2014 by RichardJensen

[PREMiERdrum]

 

In order to avoid muddying the waters further

 

I believe that ship has already sailed...

 

[Deanh]

 

As I've said before, more than once, the only way this makes sense is as a strictly Lincoln proposition. In order to avoid muddying the waters further, please don't raise this objection again.

?, youve lost me....why Lincoln only when costs could be shared with Ford offshoots?.....

[2b2]

...If the Explorer moves up market does it open up room for a 7 passenger Edge?...

&

pure speculation**:

*IF* CD4 produces stretched variants,

_wlbs_

112.2" = Xedge, S-Max

115.2" = Long wlb 3-row Edge, Short wlb 2-row Aviator-Sport, Galaxy

118.2" = 3-row Aviator, Flex

 

 

** anyone allergic to pure speculation or any ingredient of pure speculation;

please ignore

[akirby]

 

As I've said before, more than once, the only way this makes sense is as a strictly Lincoln proposition. In order to avoid muddying the waters further, please don't raise this objection again.

 

You can't get volume from Lincoln alone. Adding it to a $50K Ford (we're not talking about $20k escapes here) isn't a huge stretch especially if you extend it to the other D3 vehicles and then you can GET RID OF D3! That's a cost savings in and of itself - not having to produce 2 different similar sized platforms.

 

How will they do CAFE with a V8 Explorer? How are they doing it with a V8 Expedition and Navigator?

[akirby]

?, youve lost me....why Lincoln only when costs could be shared with Ford offshoots?.....

 

Exactly.

[akirby]

Another benefit of RWD is more exterior styling options. FWD transverse engines really limits the design of the front clip.

[RichardJensen]

?, youve lost me....why Lincoln only when costs could be shared with Ford offshoots?.....

 

Per unit costs.

 

Say you make two products, "A" and "B".

 

Say that you come up with a new component that *can* be used in both "A" and "B", but it adds $.10 to the cost of both products, and adds $.10 to the revenue from one product.

 

Product A:

1,000,000 units

$1.00 per unit costs.

$1.25 per unit revenue.

 

Product B:

2,000,000 units

$.80 per unit costs.

$1.00 per unit revenue.

 

Total revenue, both products: $3.25M

Total costs, both products: $2.6M

Gross profit: $650k

 

Now assume that you use this new part on both products:

 

Product A:

1,000,000 units

$1.10 per unit costs.

$1.35 per unit revenue.

 

Product B:

2,000,000 units

$.90 per unit costs.

$1.00 per unit revenue.

 

Total revenue, both products: $3.35M

Total costs, both products: $2.9M

Gross profit: $450k

 

RWD probably enables a higher transaction price for Lincoln products. It does not do so for the Explorer, but it adds cost to the Explorer. See?

[Deanh]

 

You can't get volume from Lincoln alone. Adding it to a $50K Ford (we're not talking about $20k escapes here) isn't a huge stretch especially if you extend it to the other D3 vehicles and then you can GET RID OF D3! That's a cost savings in and of itself - not having to produce 2 different similar sized platforms.

 

How will they do CAFE with a V8 Explorer? How are they doing it with a V8 Expedition and Navigator?

why focus on the V8 when theres a perfect little 2.7 thats SCREAMING to be uncorked.....AND a 3.5 for that matter, IMO 400hp is MORE than enough power wise, and thats right in the 3.5's wheelhouse...and its CURRENT 365 ish could possibly be handled by a 350 2.7 eco in a lighter product....

[RichardJensen]

 

Exactly.

 

You're increasing amortization costs across the board, making every other vehicle line less profitable, and you're making the Explorer less profitable. This is not complicated.

[Deanh]

 

Per unit costs.

 

Say you make two products, "A" and "B".

 

Say that you come up with a new component that *can* be used in both "A" and "B", but it adds $.10 to the cost of both products, and adds $.10 to the revenue from one product.

 

Product A:

1,000,000 units

$1.00 per unit costs.

$1.25 per unit revenue.

 

Product B:

2,000,000 units

$.80 per unit costs.

$1.00 per unit revenue.

 

Total revenue, both products: $3.25M

Total costs, both products: $2.6M

Gross profit: $650k

 

Now assume that you use this new part on both products:

 

Product A:

1,000,000 units

$1.10 per unit costs.

$1.35 per unit revenue.

 

Product B:

2,000,000 units

$.90 per unit costs.

$1.00 per unit revenue.

 

Total revenue, both products: $3.35M

Total costs, both products: $2.9M

Gross profit: $450k

 

RWD probably enables a higher transaction price for Lincoln products. It does not do so for the Explorer, but it adds cost to the Explorer. See?

yes I do, but profits profit....even if a whole lot of a little equates to a little of a lot....