Ford: 2013 Escape Will Rule the Boomers, Compact Pickups are Dead, No to Diesel
Ford sales analyst Erich Merkle shows MSN Autos where the money is.
Nearly every automaker has a compact SUV in the stable, some kind of lifted, hatchback bubble with a four-cylinder engine and available all-wheel-drive. That's because the American market, driven by higher fuel prices and a growing aversion to minivans, bought more than 1.7 million small crossovers and SUVs in 2011, more than double the number from 2000. Those are the latest numbers from Ford sales analyst Erich Merkle, who launched a flurry of memorized statistics during a lunch with the Exhaust Notes Boston bureau (aka just me).
Ford's plan to dominate the aging baby boomer market begins with the new 2013 Escape, a crossover that's already hit critical mass despite being pretty old (last year, a record 254,000 Escapes were sold out of more than 2 million total). Even more interesting, however, is what Ford isn't doing at all. Have a look.
MSN Autos: The current Escape, while very popular, hasn't been thoroughly redesigned since it came out as a 2001 model. Where does the new Escape fit in to Ford's future?
Erich Merkle: Vehicles like the Escape and the Edge -- the Escape in particular -- has the ability to hit really the needs that are intersecting between the Millennials and the baby boomers. That may not be occurring yet, but it's not about today. It's what's going to happen later. As we get closer to the end of this decade, when the oldest Millennials get to 35, 40 years of age, they will eventually start their own families, they'll need the extra space and room [of minivans or large SUVs] but still want the lower cost of ownership and the better fuel efficiency [of small crossovers].
Some people have said to me, "Why are you changing the Escape?" In this market, you can't rest on your laurels. Instead of the competition breaking [the current model], we'll break it and reinvent it ourselves. And that's what the new Escape is.
MSN: Talking about the trend of downsizing, do you think buyers will go back to the compact pickup market? The Ranger is going away, but it never seemed to be a slow seller. Not everyone wants a full-size F-150.
EM: That segment of the market has dropped so much. Six, seven years ago, small pickups represented 5.5 percent of the segment. Today it's a little over 2.5 percent. It's dropped to really small levels. Most people are still looking for the larger pickup truck because they have a certain need. For the most part, it's not so much the casual buyer any longer. There's really no good alternative to a full-size pickup truck.
MSN: Small cars are getting more and more popular. But would you say there is a size limit in the U.S.?
EM: If you look at all of the activity that has happened in the subcompact car segment, you would find that subcompact cars -- when you look at both subcompact and compact cars -- about 75 percent of that market is compact and 25 percent is subcompact. So while there is some need for subcompact in this country -- it's a little over 500,000 a year in total sales -- and it does pull in a younger buyer, it's not nearly the numbers of a compact or midsize car. So while we see people moving down, it appears compact and midsize will still be the two dominant segments. [editor's note: That means sub-subcompact crossovers like the Indian-market Ford EcoSport won't be coming here]
MSN: Speaking of fuel efficiency, what about bringing over diesels? Chevy is bringing the Cruze diesel and Jeep is bringing a diesel Grand Cherokee.
EM: Clean diesel is very expensive. It's not a cheap technology. At the end of the day, the consumer has to be willing to pay for it.
MSN: But it's cheaper than a plug-in hybrid. For that, you're talking like a $6,000 or $7,000 premium, or higher, where diesels are typically $2,000 more.
EM: Correct. The approach we've been taking with EcoBoost is that we're using much of the same technology that you would use with diesel. Gasoline direct injection with higher PSI for the fuel injector, turbocharging. We're developing gasoline engines very similarly to that of the things that have been so advantageous about diesels. Which is why, when you look at the 3.5-liter V-6, it's 420 foot-pounds of torque. If you look at the EcoBoost 2.0-liter in the Escape, it's 270 foot-pounds of torque. In many ways, they perform a lot like diesels, but they're much more cost-effective.
MSN: Do you have estimated sales for the Focus Electric? Under 10,000 a year?
EM: We haven't given any. Basically, our message is "whatever the market demands."
As a company, we have to be as flexible and nimble as possible. The way we approach that is making our assembly lines so they're capable of making electric, plug-in electric, hybrid, and fuel-efficient internal combustion all on the same line. [editor's note: The Focus, Focus Electric, C-MAX Hybrid, and plug-in C-MAX Energi will all be built in the same plant starting later this year]
We've chosen to electrify the platform so there's as much commonality as possible. We make it more of a powertrain choice. So what happens is, if we find there is more demand for an electric or a hybrid, we have the flexibility to dial one up a bit and scale the other one back, or vice versa.
Edited from a longer interview.
Diesels are hugely popular in Europe and South America, have been for years, and their popularity (based on percent of vehicles sold that are diesel-powered, currently at 50%) is growing. We'd be much farther along with the noise-vibration-harshness issues if they were as popular here. They make MUCH more sense than hybrids, as they are a great deal simpler to make, and have fewer parts to break.
Our politicians have been "led to believe" (i.e. bought and paid for) that ethanol and/or hybrid technology is better, but neither are. Per gallon, corn ethanol has just a fraction of the energy content, and uses more energy to distill and produce, than gasoline. And if you look at the energy and hazrdous waste issues, from cradle to grave, of a hybrid, you find they leave a bigger carbon footprint overall, than either gasoline or diesel cars.
So cleaning up a diesel's exhaust costs more money than adding a multi-thousand dollar battery pack, electric motor(s) associated mechanical interfaces and a computer to control all of it.
Well, at least we get more weight and poor performance as part of the deal.
While this 60 point difference is unlikely to cause catastrophic failures, it will definitely increase wear on and shorten the life of components that are lubricated by the fuel.
also not to mention all the paraffin problems (wax drop out) cold soak,, more water and higher corrosion.
In short, the biggest problems are nobody wants to make ULSD #1, nobody has any place to store it, it is much more expensive than regular Kerosene, and last but not least, it doesn't work anywhere near as well as the old high sulfur Kerosene.
The reason for this concern is that a load of fuel with no or too little lubricity additive could potentially cause catastrophic engine failures.
And if you look at the energy and hazrdous waste issues, from cradle to grave, of a hybrid, you find they leave a bigger carbon footprint overall, than either gasoline or diesel cars.
certain people never think of that and neither do they think of anything when they throw there new gas filled light bulbs in the trash along with there old batteries.
no use entering the small diesel segment. if too many offer diesels in a already small market they will all lose money on it (unless ford develops a affordable and good one and blows away the competition).
a hybrid is fine, i don't want a plug in hybrid (a proper hybrid like the volkswagen X-1 or prius non-plug-in).
EV's pollute more than hybrids, imagine al the coal power plants we will need. the existing power plants are already overtaxed for power.
as far as the compact pickup trucks.. they are utterly worthless for me. i must be the one in five that got smart and dumped the compact and went back to the full size.
they may come back it is possible!?
We are one of the weathiest societies on the planet, and we own lots of heavy toys unlike the rest of the world.
Not only that, consider that we often have families with 2 or more cars in the garage like me while families don't even have one car let alone a garage to put one in. We're very lucky here in so many ways but many don't recognize that and want the government to give them more without working for it.
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