To some people the idea of a luxury sport-ute may seem like an automotive oxymoron.
After all, aren’t sport-utes supposed to be rugged vehicles designed for ripping along dirt tracks in the woods?
No, says Landa Leichtling of Deerfield, who just spent $30,000 on a forest green 1997 Mercury Mountaineer–with gray leather interior and a six-CD changer–that she drives mainly to work.
The Mountaineer is Lincoln-Mercury’s upscale version of the best-selling Ford Explorer and the first sport-ute offered by the division. And it’s one of the latest offerings in an increasingly crowded field.
“I toyed with buying a Ford Explorer for about a year,” said Leichtling, a mother of two and a credit collection manager for a local water company. “But I was concerned about the ride. The Explorer was too much like a truck and the ride was rough. But the Mountaineer doesn’t have the `trucky’ feel of the Explorer, and it’s very pretty. So I bought it on the spot after my first test drive.”
Leichtling is one of a growing number of auto buyers drawn to the luxury and near-luxury sport-ute segments.
Analysts generally count only those models priced at $40,000 and up as genuine luxury vehicles, a category that includes the British-built Range Rover (base price: $55,000), as well as the Toyota Land Cruiser ($40,258) and its premium companion, the Lexus LX450 ($47,500), both imported from Japan.
In the near-luxury group are such imports as the Acura SLX ($33,900), Isuzu Trooper LS ($31,570), Land Rover Discovery ($29,950), Mitsubishi Montero SR ($37,780), Nissan Pathfinder LE ($32,129) and Toyota 4Runner Limited ($32,988), as well as such domestics as the four-door Chevrolet Tahoe and GMC Yukon four-wheel-drive ($30,464 each), Ford Explorer Eddie Bauer ($30,215) and Explorer Limited ($31,835), Jeep Grand Cherokee Limited ($30,629) and Oldsmobile Bravada ($29,505) and loaded versions of the Chevrolet and GMC Suburban.
And though the base stickers of other compact SUVs, such as the Chevrolet Blazer and GMC Jimmy, start at less than $20,000, popular option packages with such amenities as leather upholstery and CD players can inflate the sticker to more than $30,000.
In a sport-utility market whose annual sales top 1.6 million units, the luxury and near-luxury makes account for only a small percentage. But that’s growing.
Through June, Land Rover of North America had sold a record 10,571 vehicles, including 3,327 of its pricey Range Rovers. The Lexus LX450, in its first year in the segment, is challenging the British, with first-half sales of 3,840. That compares with 6,213 sales through June for its slightly less expensive sibling, the Toyota Land Cruiser.
In the near-luxury group, first-half sales of the new Acura SLX were 1,225; Isuzu Trooper, 9,290 (up 5.6 percent from the first half of 1995); Mitsubishi Montero, 6,458 (down 28.5 percent); Nissan Pathfinder, 29,510 (up 14.9 percent); Toyota 4Runner, 50,967 (up 46.2 percent); Oldsmobile Bravada, 3,063 (down 12.3 percent); Chevrolet Tahoe, 64,278 (up 117.9 percent); Chevrolet Suburban, 46,145 (up 6.7 percent); GMC Yukon, 19,599 (up 103.1 percent); GMC Suburban, 20,698 (up 20.3 percent); Jeep Grand Cherokee, 124,399 (down 3.2 percent) and Ford Explorer, 207,358 (up 8.5 percent).
The segment has come a long way since Jeep opened the market with the 1965 Super Wagoneer, which historians call the first sport-ute in the comfort zone.
Until then, four-wheel-drive vehicles such as Jeeps and International Harvester Scouts featured functional options such as snow plows, winches and post-hole diggers. Today, buyers are looking for premium features such as leather upholstery, full power accessories and high-end audio systems.
Automotive suppliers surveyed recently for the University of Michigan’s Delphi VIII forecast ranked status appeal as the second most important purchase criterion (behind styling) among sport-ute buyers through 2005. So the luxury sport-ute trend is likely to continue.
But the key question is whether you get much more with an upscale sport-ute or are they merely gussied-up versions of base vehicles?
“The first luxury sport-utes were truck-based models that were fixed up with leather, but otherwise lacking in luxury attributes,” said David J. Andrea, an automotive investment analyst with Roney & Co. in Detroit. “Manufacturers realized that to pull more people into that segment, they needed a product that justifies the image and price. And that’s what we’re seeing with a lot of the new offerings. But the product can fail if it’s just a rebadged, run-of-the-mill sport-utility.”
Also, premium sport-ute buyers say they will pay extra for the more pleasant dealership experience that often comes with purchasing a more expensive vehicle such as a Lexus or a Land Rover.
Leichtling said she was told to wait for 20 minutes at a local Ford dealership while the salesperson took another customer for a test drive on a recent Saturday. She left and went to the Lincoln-Mercury dealer, where she received the salesperson’s undivided attention–and where she spent her money.
Lincoln-Mercury executives insist that Mountaineer is more than just a rebadged Explorer and that Mountaineer won’t cannibalize Explorer sales.
“We’re going after Jeep Grand Cherokee,” said John Keilly, Mountaineer brand manager.
But the Mountaineer is based heavily on the Explorer, with a fancier grille, different bumpers, a luggage rack, a standard V-8, two-tone paint (gray on the bottom paired with one of five colors–Toreador red, Oxford black, Oxford white, Medium Willow green and Dark Lapis blue) and an all-wheel-drive system. The V-8 and all-wheel-drive are also available on the Explorer.
By way of comparison, the 1996 Explorer XLT V-8 starts at $24,465 and the base price on the all-wheel-drive Mountaineer is $29,765. Lincoln-Mercury reports that it has sold 8,237 Mountaineers since the vehicle’s debut May 23, In the same May to June period, Ford sold 98,338 Explorers–base and uplevel models.
The coming year will see the market get even more crowded as premium automakers such as Mercedes-Benz and Infiniti introduce luxury sport-utes.
The Mercedes-Benz AAV, for All-Activity Vehicle, will be built in Vance, Ala., and goes on sale in the fall of 1997. Likely to be the first luxury sport-ute to offer side air bags, it’s designed to go up against the top-of-the-line Explorer Limited and Grand Cherokee Limited. The AAV is expected to be priced around $40,000.
Another high-end offering will be Infiniti’s QX4, a premium version of the Nissan Pathfinder expected to sell for about $40,000 and go up against the Lexus LX450 and the Acura SLX.
And Lincoln-Mercury next summer will get the Navigator, its second sport-ute, which will be based on the 1997 Ford Expedition, a new full-size four-door that’s 16 inches longer than Explorer. The Navigator will be priced from around $40,000 and will be decked out with a plush leather-and-wood cabin, a premium sound system with CD changer, anti-lock brakes and a 5.4-liter, V-8 engine.
Even companies such as Volvo, which has stayed out of the sport-ute segment, are scrambling to come up with vehicles that fit the luxury sport-ute niche. In the spring, Volvo will introduce the Cross Country, an all-wheel-drive edition of the 850 station wagon jacked up to look like a sport-ute.
But analyst Andrea warns: “Once you see these vehicles in everyone’s driveway, the market for them may begin to soften. Anytime you talk about luxury goods, it must be something that gives the buyer a good feeling and a distinctive image.”
