Ford revamped its popular Explorer SUV for the 2020 model year, but admittedly took on too much change with the Ford Explorer and developed some problems — all in the midst of Ford’s attempt at an overall financial turnaround.
After the relaunch of the Ford Explorer in June 2019, Ford Explorer sales fell 48 percent in August 2019 (third quarter) compared to sales the year before. Ford lost its leading position in the SUV segment, falling 24.25 percent. The trouble hit Ford hard financially with a loss of $1.7 billion in the fourth quarter of 2019 and a disappointing 2020 forecast.
While re-tooling the Ford factory at the Chicago Assembly Plant that makes Ford Explorers, it took a month to clear out the old production equipment from the factory and install new production equipment for the new Ford Explorer style. According to CNBC, when production started there was one recall, and there were mysterious problems that required shipping Ford Explorers manufactured in Chicago to the Flat Rock Assembly Plant in Michigan for further work. Ford said this kind of work is not out of the ordinary.
Simply put, with the new product going from front wheel driver to rear wheel drive architecture, all-new assembly line, all new body shop … all those things at once, we took on too much and we shouldn’t have … it’s our fault and so part of the lessons learned … is obviously go back to, you know, how we manage these launches and sequence them in a way that gives the team a chance to be successful.
— Joe Hinrichs, Former President, Automotive Ford Motor Co.
SUVs tend to be more profitable products compared to sedans overall, and so far customers have seemed to be willing to pay higher prices for SUVs and crossovers, compared to similarly sized passenger cars. In addition, the wide range of trim levels available on the Explorer also open the opportunity to charge a range of prices for different features higher trim versions of the vehicles tend to be quite profitable for the automaker. Half of all Explorer sales in the third quarter were the ST and Platinum line. Ford told CNBC in January 2020 that the Explorer ST was beating sales expectations comprising 21% of retail sales.
It’s possible 3rd quarter sales were low because customers didn’t want to buy the older style 2019s, and that the volume sales leader “XLT” trim was not available in high volume. Mostly, the expensive, higher volume “Platinum and ST” versions were released first. More of the new style XLT’s were available in the 4th Quarter.
But what about cost conscious customers who don’t care about the older style, who might seek the lower cost of the older model, or who might even prefer the older style? CARDINAL NEWS checked a few dealerships and couldn’t find many 2019 Ford Explorers with the older style in inventory, but found a good amount of inventory for 2019 Ford Edge, 2019 Ford EcoSport, 2019 Ford Expedition, and 2019 Ford Flex.
Therefore, it’s also possible that people don’t like the new design of the 2020 Ford Explorer. Customers may have grabbed up the remaining older style Ford Explorers. The older style had a boxier look that symbolizes utility — a good middle-of-the road classic family SUV. All trim models of the 2020 Ford Explorer look sportier — abandoning the aesthetic utility symbolism available since 2011; and unfortunately Ford’s new design of the Ford Explorer makes it look a little more like a Ford Escape, which is a cheaper vehicle. Customers might not want to buy the more expensive Ford Explorer if they perceive it looks downgraded and more like the less expensive Ford Escape. The fact that the Platinum and ST versions of the Ford Explorer were the best sellers might also indicate that the Explorer model might be attracting more “sporty-minded” customers, and that the XLT just doesn’t cut it with its mere half-baked sportiness. And that XLT’s “half-baked sportiness” might be a turn-off for “utility-minded” customers that would otherwise buy a classier looking XLT trim.
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