Ford Motor Co. will add production of the Mercury Mountaineer in the first quarter of next year at its Louisville truck plant, where the Ford Explorer sport-utility vehicle and Ford Ranger compact pickup truck are assembled.
Mountaineer, a luxury version of the Explorer and Lincoln-Mercury division’s first sport-utility, will go on sale in the second quarter of next year as a 1996 model, L-M general manager Keith Magee said.
Mountaineer will be followed in the 1997 model year by a full-size sport-utility vehicle called the Navigator, a luxury version of the new Ford Expedition, which will be a new four-door built off the full-size, two-door Bronco sport-utility vehicle platform.
So why turn to sport-utility vehicles?
“We’ve been losing sales to sport-utilities over the last three to four years and the number lost has been increasing the last two years,” said Magee in Chicago to unveil a sketch of the Mountaineer to the Midwest Automotive Media Association.
“With Mountaineer we’ll hold onto those customers we’ve been losing–and a significant number have switched over,” he said, echoing a familiar refrain among car executives who have watched as customers have opted for SUVs rather than luxury sedans.
Mountaineer will be unwrapped at the Detroit Auto Show in January.
Magee declined to discuss price or the number of cars to be built, though he hinted that not all of L-Ms 1,620 dealers may get Mountaineer.
“Who gets Mountaineer depends on production capacity. If we can get ample supplies, then all dealers would get it, but we aren’t clear on the capacity as yet. Mountaineer is based on Explorer, and Ford division is selling every Explorer it can make, so there should be limited Mountaineer availability.”
Magee said Mountaineer will be offered in two- and four-wheel-drive four-door versions but with only a 5-liter, V-8 engine and four-speed automatic transmission. It will come with dual air bags and four-wheel anti-lock brakes as standard.
Just about every automaker has plans or is making plans to offer a luxury SUV in the next year. That is expected to create a crowded market.
“We’re used to competing against a lot of players,” said Magee. “But we don’t see this as high risk as much as we see it as high opportunity. An SUV is a vehicle for all occasions. It hauls people and their stuff. It’s the best vehicle in severe weather. It’s a security blanket.”
Magee said he expects some consumers to buy a Mountaineer rather than a Continental or a Town Car, “but without Mountaineer we were losing sales to other companies and now we’ll keep buyers in the family.”
While Lincoln-Mercury, Lexus, Infiniti and Mercedes-Benz, among others, have been preparing luxury SUV offerings, Toyota will bring out the RAV4 and Suzuki is introducing the X-90 for 1996. Both are mini sport-utility vehicles priced at less than $20,000 for young, less-affluent buyers. There has been speculation so much attention has been paid to luxury SUVs that Toyota and Suzuki will walk away with the low end of the market.
“We’ve been looking at a small SUV, too,” Magee said. “That’s been something the company has been studying to determine if it’s a profitable market to be in. But a small entry-level SUV would be more consistent with Ford division, not Lincoln-Mercury,” he said.
Ford tried obtaining a mini-SUV from Kia of South Korea but the deal fell through. The latest speculation is that Ford will build a mini-SUV off the Ford Escort platform. Such a plan would be similar to Honda, which plans to build a SUV off its subcompact Civic platform, possibly in the U.S..
Though Magee admits consumers have turned to SUVs as an alternative to luxury sedans, he insists that doesn’t mean the luxury market is weak.
“What it means is that there are more ways to buy luxury today–cars or SUVs,” he said. “Luxury buyers are still out there, they’re just buying different vehicles with their money. They have more choices and the purchases are more dispersed, but there are still people willing to spend the money on a luxury vehicle.”
In addition to SUVs, Lincoln-Mercury is preparing a few new models in its car lineup as well, but Magee refused to discuss future products.
Michael Dale, president of Jaguar, which Ford acquired for about $2.5 billion in 1990, said the Ford/Jaguar marriage will produce offspring soon. A baby Lincoln is anticipated in early fall of 1998 as a 1999 model and a baby Jaguar XJ sedan late in 1998 as a 1999 model.
The venture was approved by Ford management in July after seeing prototypes that ensured the two cars wouldn’t look alike, Dale said. Both will be entry-level, rear-wheel-drive models priced around $35,000.
The Jaguar will be powered by a new 4-liter V-8 that will be introduced in the new Jaguar XJS coupe replacement in 1997.The Ford version reportedly will offer a choice of 3-liter, V-6 or 3.7-liter, V-8 engines.
A smaller entry-level luxury car would be in keeping with a shift in the luxury car market from the big $50,000 to $60,000 boats to trimmer, more streamlined $30,000 to $35,000 models such as the Toyota ES300, Infiniti I30, Acura TL and the announced Cadillac Catera sedan. Recognizing that consumers now favor midsize instead of full-size luxury cars, Cadillac has even said it will downsize its Seville and Eldorado in the next design go-round for 1998.
Though refusing to talk about the Jaguar venture cars, Magee admits a swing to smaller luxury models.
“Older luxury car buyers, and there are a lot of them, want the traditional big size and room. The younger luxury car buyer, and there are a lot of them, prefer a smaller car, which is why the I30 and TL are selling well. There’s two groups of buyers in two important segments. The traditional big car luxury buyer isn’t going to go away, but the number of smaller luxury car buyers, the so-called luxury move ups, is growing,” he said.
“All I’ll say about the future is that in the next two to three years we have aggressive product plans to cover that market. We’re looking at the market changes and trying to cover it,” he said., He added, ,if Cadillac is going to downsize, “we aren’t going to be standing still.”
One product not coming, however, is the Lincoln 2000, or L2K, a luxury two-seat roadstar concept that made the auto show rounds last year to rival the Mercedes SL roadsters.
“We asked people at the shows if they liked the car and they did. We got letters from people who wanted to buy it. But the problem is investing in a low-volume car. The volume would be too low to make it economic. We’re not a niche player, we’re a volume manufacturer. We’re in business to make money and have no plans to build the L2K,” Magee said.
