DETROIT (TheStreet) — In an unexpected, dramatic change in the global automobile industry, utility vehicles have emerged as one of the hottest segments, with Ford leading the transition.
At a press conference on Wednesday, Jim Farley, Ford’s global marketing chief, said utility vehicle sales are growing worldwide, even in Europe, with global sales up 35% since 2005, while sales of small utilities are up 154%. “That’s a growth business,” he said. “With all the downturns in all the economies around the world, here’s a segment that’s growing.”
“There are big trends going on, and they are really accelerating,” Farley said. “(Talk of) the death of utilities was premature. It’s just coming back in a different form. People around the world are falling in love with this body style.”
Oversized, fuel-inefficient utility vehicles, once a symbol of American overindulgence, have fallen out of favor, replaced by smaller, more stylish versions, many built on car platforms rather than truck platforms.
Ford’s success in utilities starts in the U.S., where it is the best-selling utility brand and Escape is the best-selling utility vehicle. In April, Escape reported its best April ever, as sales rose 52%. For the first four months of the year, Escape sales rose 31% to 98,809 while Explorer sales rose 34% to 62,853.
In China, sales of small utility vehicles rose to 1.4 million in 2012, up from 120,000 sold in 2005, according to IHS Automotive figures. Ford, expanding in China, now sells a portfolio of three utility vehicles: Edge, Explorer and Kuga — the name used for the Escape outside the United States. In Europe, where the utility segment is the only segment to have grown since 2005, Ford increased Kuga production 8% this year to meet demand. Also Ford has rolled out its compact utility vehicle, the EcoSport, in China and plans a European introduction in the coming months. READ FURTHER
Written by Ted Reed in Charlotte, N.C.
