Ford betting on global growth of small SUV


By Jackson Hayes

DEARBORN, MI. – Ford revealed it is betting big on the continued growth of small SUVs by rolling out more smaller SUVs in more markets around the world.

With small SUVs growing faster than any other Ford vehicle segment and faster than the industry average over the last five years, it is a gamble the automaker said should hit big.

“This was a major bet we made with the One Ford plan, and it is paying off,” Jim Farley, executive V-P of global marketing, sales and service and Lincoln told reporters during a live-streamed event this week.

“Utilities are helping us grow our share in the North American market – particularly in the traditionally difficult coastal markets – and they’re driving our expansion in developing markets, where utility growth is exploding.”

The One Ford plan has delivered a global family of utilities, including EcoSport, Escape/Kuga, Edge and Explorer, which the company said should fuel growth during the next few years.

Ford sales analyst Erich Merkle said the EcoSport subcompact, which is currently sold in 10 countries, will be available in more than 60 countries by 2017. The Ford Edge sales footprint is also set to expand to 40 markets up from 16 last year.

Perhaps of greatest interest though, will be the Escape (sold as the Kuga) hitting dealerships in China this year. In China, small utility sales climbed to more than 1.4 million vehicles last year, up from about 120,000 units sold in 2005.

Data provided by IHS Automotive indicated global utility vehicle sales grew 35 per cent between 2005 and 2012. The segment now accounts for more than 13 million sales annually or roughly 18 per cent of the global automotive market.

Small utilities are leading the growth with sales up 154 per cent during that same time period.

Driving the growth, explained the executives, is a combination of factors including growing wealth in China and India and a shift in North America from large SUVs primarily driven by rising fuel prices.

“Nothing has been more prolific than the global rise of the small utility,” said Farley. “Once a trend in Western markets, we now see a rapid convergence toward the segment globally as customers become enamored by vehicles offering the size and functionality of a utility coupled with car-like dynamics and fuel economy.”

Farley, who noted that China is the biggest opportunity for the industry, said Ford would have a “distinct advantage” there as it offers an entire family of utilities meaning small, medium and large. He went on to predict China utility vehicle sales would double in the next five years.

Even in Europe, where Ford followed up a year-end loss of $1.75 billion in 2012 with a dismal first quarter this year, the optimism is high. The Blue Oval said it would up production of the Kuga by eight per cent in 2013 surpassing 100,000 units.