While Ford Explorer Sport is making progress with premium buyer conquests, I can't help wondering if this is a result of the unremarkable MKT occupying a spot that should have been taken by an Explorer variant.http://www.fool.com
Ford Motor Company's 2015 Explorer Is Raising Eyebrows
What's the big deal?
There are a couple of eyebrow-raising statistics regarding the Ford Explorer. First, if you had to guess which brand people were trading in for the Explorer Sport trim, what would you guess? Maybe a GMC utility vehicle, a Chevrolet product, or even a popular Jeep SUV?
Those would be good guesses, but that's not entirely the case. In fact, 15% of Explorer sales are coming from owners of luxury brands that largely include Audi, BMW, and Mercedes-Benz. Many certainly wouldn't have guessed owners of those prestigious, and very successful, luxury brands would be trading in for an Explorer, even if it is a higher-end Sport trim package.
Despite that being surprising for me, Ford wasn't shocked in the least: "We aren't surprised by the luxury brand trade-ins for Explorer Sport," said Matt Zuehlk, Explorer brand manager, in a press release. "It offers world-class performance, comfort and technology at a more affordable price than traditional luxury competitors, especially in largely import luxury markets like New York and Los Angeles."
That shows Ford's brand image is improving and attracting more higher-end consumers.
Ford's 2015 Explorer Sport. Source: Ford Motor Company.
Show me the money
According to Ford, nearly 25% of Explorer and 40% of Explorer Sport consumers are earning more than $150,000 a year -- significantly higher than the overall brand's 17% mark. It's not a surprise that Ford is thrilled to be attracting more affluent customers, as those car buyers love to tack on extra options and features, which has pushed the Explorer's price point higher.
While having more affluent customers is nice, Ford is just as thrilled about attracting a younger consumer that the automaker can potentially keep around for multiple purchases -- for context, Ford remains the auto industry's leader in consumer loyalty.
Consider that in 2008 Ford ranked fourth in brand consideration with millennials -- roughly 80 million consumers born between the early 1980s and early 2000s -- and by the end of last year had jumped to first place, according to Maritz Research, a St. Louis-based marketing research company.
I bet you can guess which specific Ford vehicle made the largest jump in consideration from younger buyers. Yes, indeed, the Ford Explorer made the largest improvement in terms of buyer consideration.
Ultimately, it's clear that Ford's new vehicles over the last half-decade have made a huge impact -- think of the popular Fusion and Escape -- and redesigns of the Explorer, Mustang, and F-150, among the many other vehicles being launched globally this year, look to take Ford to new sales heights over the next few years.