Niche — What lies ahead - As I See It - the forecast of motor vehicles, Ford Motor Co. products - Brief Article - Statistical Data Included

Automotive Industries,  Jan, 2002  by Andrew Cummins

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No matter how you say it, distinctive, special purpose vehicles are the future. Think that's a bold statement? I'll tell you why it isn't.

Remember when everybody drove a Ford, Chevy or Dodge? Today, we not only drive derivatives of those classic nameplates, we drive derivatives of a multitude of brands that weren't around when Henry Ford first built the Model-T.

And Ford Motor Co. was built on the premise that there should be a common platform for the common person. Perhaps that was the secret behind the early success of the Taurus or even the 1964 Mustang. Both were stylish cars that nearly everybody could afford. Those days are probably gone forever. Why? Consider that the average consumer is, if not smarter, at least better informed about their next vehicle purchase. I recently read that 65 percent of the people who enter a showroom have checked vehicles out on the Web prior to visiting the dealer.

The trend I am seeing is that customers know what they want and what is available in their price range prior to buying a vehicle. They are savvy shoppers who are looking for that specific car, SUV or truck that best fits their lifestyle and their budget. And herein lies the future of niche.

Clearly many "built for everybody" sedans aren't enjoying the popularity they once had. Their market share has been greatly eroded by vehicles that serve a specific purpose or lifestyle. Frankly, I don't get some of them -- like those mini SUVs. What's up with those? They're under-powered, under-sized and well under my radar screen. But, who can argue with research or focus groups?

I like the new trend in vehicle development. Some of you may remember when I wrote my "Letter to Dieter" when he first came to Daimler Chrysler. I suggested that he focus on niche vehicles like the PT Cruiser, the Viper and the Prowler. I told him to develop the biggest, baddest pickup in the market and sell the most versatile SUV on earth. Focus on profits and margins rather than volume. I'd rather be No. 3 in size and No. 1 in profitability. I believe that's what Wall Street is looking for as well.

Our industry has been groping for the right vehicle ever since the pickup outsold the car. Everybody knew that was a fad and wouldn't last forever. SUVs seemed to fill the crossover void at the time, but even those are losing their luster. And the minivan is all but dead, unless you're a soccer mom running a free shuttle service.

The most exciting thing I've seen in a few years is the new "entry-level" luxury segment being developed by the likes of BMW, Mercedes, Jaguar and Audi. I've driven these sub-$30K beauties and they're good. When these show up in configurations such as convertibles and station wagons, the rest might as well pack up their slide rules or get on the bus. This is a niche that is rapidly filling up. True, it's hard to keep these vehicles under that $30 grand mark, but it's a nice place to start.

And it shows that there is a market out there waiting for its vehicle. The manufacturer that figures it out is the one who will break through the profitability barrier and enjoy a meteoric rise in share value.

If it were me, I'd be looking at that young family with 2.5 kids and one income that needs a choice of vehicles that won't break their budget, is safe for the kids, looks stylish and is functional. I know that family -- it's my daughter, her husband and my grandchildren, with another one on the way. He's a police officer; she's a stay-at-home mom. Here's a niche crying out for a vehicle. And I think the industry should give them one. What do you think?

Andrew Cummins is Publisher/Editorial Director of Automotive Industries

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