Ford To Ask Buyers To Pay More for Fuel Efficiency



Source: http://noir.bloomberg.com/apps/news?pid=20601209&sid=aTKNdpsbfxnA

Bloomberg - July 26, 2010

Situation
Redesigned 2011 Ford Explorer goes on sale in December
Standard engine will be 3.5-L V-6 w/ 290 hp, 53 more horsepower than optional 4-cyl
Ford will ask buyers to pay premium for small, 4-cyl engine
Smaller engine technology will give 7-passenger SUV same fuel economy as Toyota Camry
Camry sedan gets 19 mpg city / 26 mpg highway; more than 30% better than 2010 Explorer
Ford won’t say how much extra it will charge for smallest engine ever to power an Explorer
Significant Points
Ford will try to convince consumers they should spend to save
Challenge to charge premium for more efficient engine: US gas prices down 34% from 2008
Explorer’s 4-cyl won’t tow as much as V6
Have least off-road capabilities of previous Explorers, traditionally key characteristic of model
Poor gas mileage #1 reason shoppers reject Explorer
Sales fell 88% during past decade, from 445,157 in 2000 to 52,190 in 2009
Says
"We really want to make a statement that the old baggage on fuel economy with the Explorer is gone. To get great fuel economy it takes technology, and it’s our view that people will pay for that." -- Jim Holland, Explorer’s chief engineer, Ford Motor Company
"Why would you want to pay more for fuel economy when gas prices are going down? People have very short memories." -- Jim Hall, principal, 2953 Analytics
"As goes the Explorer, to some extent, so goes Ford. It’s the backbone of the brand.-- Jim Farley, global VP-Global Marketing, Ford Motor Company