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September 13, 2006

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Ford EDGE Built to Lead the Fast-Growing CUV Market


Photo: Ford Motor Company

By Mike Ureel, FCN

The new Ford Edge will be the next home run in the company's product-led turnaround, say Ford Motor Company officials, and a bold contender in the fast-growing crossover utility vehicle segment.

The Edge and Lincoln MKX are set to join a red-hot CUV market that has grown from 500,000 sales in 2000 to 2.4 million in 2006. This year, the crossover segment is expected to outsell traditional truck-based SUVs for the first time ever. There are 43 different models now and there is projected to be more than 70 models by 2009.

"The growth of the CUV business and the decline of the SUV business is the most dramatic shift in product that I've ever observed," said George Pipas, U.S. sales analyst for Ford.

 

The sport-ute segment has been evolving since Ford introduced the revolutionary Explorer in 1990, which brought refinement and comfort to the spartan, off-roading utility vehicles of the 1980s.

"The SUVs of the 1990s that came after the Explorer were more refined and had high levels of equipment and features, such as leather interiors and moonroofs," said Pipas. "It was the family car of the '90s."

 

 

While these truck-based SUVs dominated sales in the 1990s, the Japanese automakers by necessity were the first to introduce car-based sport utes in 1996 with Toyota's RAV4.

"Japanese automakers didn't have the proven truck platforms to adapt to SUVs, but they had proven car platforms," said Pipas.

"They thought that, with the Big Three dominating the truck-based SUVs, a better strategy was to develop car-based SUVs."

The CUV segment took off slowly at first but by the time Ford launched the Escape CUV in 1999, which was marketed as an SUV, the segment began growing. Ford has had a strong portfolio of CUVs, and the Escape (and sister Mercury Mariner) has been the top-selling CUV in the U.S., though it's been marketed as an SUV, said Pipas. Ford added the Freestyle CUV in 2004 and since then has been well-positioned in this fast-growing segment.

What's behind this booming segment? Baby boomers themselves, said Pipas. The first of the 75 million-person boomer market is now entering retirement age. Many are empty-nesters who want smaller vehicles.

"Baby boomers are entering a new life stage," said Pipas. "The need for the larger passenger and load hauling ability of traditional SUVs isn't as necessary for many of them. And they don't want to have a step-ladder to get into the larger SUVs."

Today's CUVs match the benefits of a passenger car -- lighter weight and fuel-efficient with versatility and cargo -- without the size of an SUV.

"Consumers will buy what the manufacturer produces as long as there is a need. And there is a need for CUVs, because of baby boomers," said Pipas. "I think the Edge is a statement not just about what it offers consumers -- car-like ride, handling and versatility -- but also a unique design."

Since its unveiling at the 2006 North American International Auto Show in Detroit, almost 40,000 potential customers have expressed interest in the bold-looking Edge, through its Web site and other media. About 750,000 people have visited the Edge site, with 140,000 completing Build & Price configurations online.

Ford CUVs include the Ford Escape, Freestyle, Mariner, and soon, the Ford Edge and Lincoln MKX. "The Edge has generated a lot of interest, and we've gotten a lot of great reaction from the press," said Jeri Ward, Edge marketing manager, Ford Division. "And we've gotten a lot of traffic to the Web site very early on, and what's great is that momentum has continued." The Ford Edge is distinguished by its bold, American design. Equipped with an all-new 265-horsepower V-6 engine and six-speed automatic transmission, the Edge is expected to deliver performance, quietness and fuel efficiency. Edge is packed with Ford innovation, too, with its panoramic glass roof, laptop-friendly center console and advanced safety features.

Will the CUV spell the demise of the truck-based SUV?

"By the end of the decade, I think CUVs will likely be the largest vehicle category in the U.S. auto market," said Pipas. "SUVs will remain a significant segment in the U.S. auto market because this product catagory is better suited for off-roading, hauling several passengers, or pulling a boat or trailer."

(September 12, 2006)

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