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Ford struggled to launch its sixth-generation Explorer SUV in 2019.
- The difficulties with the launch hurt Ford’s 2019 revenue, but the SUV is now on track for its best sales months since last July.
- Mark LaNeve, Ford’s US head of marketing, sales, and service, spoke to Business Insider about the Explorer’s rebound.
- Consumers are opting for more expensive, higher-trim levels of the new Explorer, improving transaction prices from the previous generation, which hadn’t been redesigned in nine years.
- Visit Business Insider’s homepage for more stories.
The Explorer is as important to Ford as the F-150 pickup truck and the Mustang. So when the company struggled to launch the latest version of the SUV on schedule last year, it was a serious setback.
Ford is in the midst of an $11 billion restructuring under CEO Jim Hackett, with a focus on improving what he calls the 116-year-old automaker’s “fitness” and preparing it to attack new business opportunities with connected vehicles, electric cars, and mobility services.
In that context, the problems with the Explorer — a nameplate that was introduced in 1990 — were a headache no one anticipated; Ford is supposed to be good at the old-school aspects of the car business.
“If a day goes by that you don’t build the vehicle, you can’t get that day back,” said Mark LaNeve, Ford’s US head of marketing, sales, and service, in an interview with Business Insider.
He added that the Explorer’s difficulties — alongside the mechanically similar Lincoln Aviator, it was assembled in a Chicago factory that had been retooled, but SUVs later had to be sent to Michigan to be reworked — hurt Ford’s 2019 revenue.
That contributed to a weaker performance overall and might have led to an executive shakeup, with Ford’s automotive president Joe Hinrichs stepping down after nearly 20 years at the company and former Toyota executive Jim Farley, who had been in charge of strategy, becoming chief operation officer. (Wall Street has been discouraged, sending Ford shares down 18% over the past 12 months.)
But Explorer has bounced back — and bounced back robustly.
In fact, Ford expects retail sales of the SUV to top 20,000 units in February, the best month since the July 2019 launch. (LaNeve pointed out that the versions of the vehicle that Ford makes for law-enforcement organizations, especially hybrids, haven’t even come online yet and are making the company even more bullish about the comeback.)
“We steadily gained momentum, starting in November,” LaNeve said.
Things are looking up for Explorer
Ford said that it now has a 17% US market share in what it defines as the large-utility segment, and increase of a point from February 2018. That makes sense, as the previous-generation explorer was nine years old, and although updated twice, it wasn’t as competitive as Ford wanted it to be.
“We knew we had a really good product,” LaNeve said. “And we were confident we’d recover.”
But he admitted that it was out-of-character for Ford to miss the mark with Explorer. He cited the successful launch of a new, aluminum-bodied F-150 — a radical and risky move for the Blue Oval — in 2014 as a shining example of Ford’s capabilities.
“We’re good at launching vehicles,” he said. “We executed that one pretty well!”
But he acknowledged that the carmaker had bitten off a lot with the Explorer, adding complexity to the manufacturing process by building a new rear-wheel-drive platform that’s shared with Lincoln and producing both hybrid and plug-in hybrid variations.
Fortunately, the company’s dealers were patient.
“For the most part, they were very supportive,” LaNeve said. “They understand it’s a complex business. We didn’t run into a lot of anxiety or animosity.”
Of course, dealers in markets where Ford sells far more SUVs than pickups are glad the Explorer is on track. According to Ford, February sales in New York, the SUV’s largest market, should be up 40% year-over-year. Los Angeles and San Francisco could match or exceed that number.
And Ford is pleased that customers are opting for the higher trim levels of the new SUV, increasing average transaction prices beyond what the previous generation was bringing in.
“All of our aspirations for the product were right,” LaNeve said. “We just had a few months of delay.”
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