As GM's challenge to Ford Explorer looms, weaknesses appear

Journal Record, The (Oklahoma City), Nov 8, 2000

DETROIT (AP) -- There's a major battle just over the horizon between the world's two largest automakers for primacy among buyers of medium-sized sport utility vehicles. And the reigning champion will come to the fight limping.

Ford will begin selling an all-new edition of its four-door Ford Explorer and Mercury Mountaineer SUVs early next year. Within a few months, General Motors will start churning out retooled versions of the Chevrolet TrailBlazer, with updated GMC Envoys and Oldsmobile Bravadas coming out a few months after that.

It will be the first time that the two auto giants have thrown all- new designs of their midsized SUVs at each other in such short order, and it arrives in the wake of the Firestone tire recall that has dragged down sales of the Explorer.

SUVs have been one of the most competitive segments over the last year or two, but mostly on the luxury end, said Wes Brown, an analyst with Nextrend in Thousand Oaks. Calif. The new Explorer and TrailBlazer "will bring back a renewed focus on the mass-market models."

These SUVs are vital to the profits of both companies -- analysts estimate that Ford's sales of Explorer and Mountaineers in 1999 generated about $2 billion in pretax profits. Each automaker likely invested hundreds of millions of dollars in the redesigns.

Over the past 10 years, 3.6 million Explorers have been sold in the United States, making it the top-selling SUV. It has been the key to Ford's success in passing GM in overall SUV sales. For the year through October, Ford has sold 703,799 SUVs, while GM has sold 687,513.

"The Explorer is the heart of our SUVs," acknowledged Al Giombetti, Ford's group marketing manager for SUVs and trucks. "We've got the most customers and the highest loyalty, and we think it's a great advantage."

While the Explorer has been on top for a decade, its franchise is seen as being vulnerable because of the problems with Firestone tires, which over the years have been standard equipment on most Explorers. Customers have increasingly shied away from the vehicle since the recall of 6.5 million ATX, ATXII and Wilderness AT tires because of problems with tread separation.

Federal investigators say at least 119 people have died and some 500 have been injured in accidents, most of them involving Explorers.

The latest sales figures showed that Explorers were down 16 percent in October compared to a year earlier. These results include the Explorer Sport Trac, a four-door pickup that wasn't on sale last year and which accounted for about 17 percent of sales in October.

Ford has taken steps to wall off the new Explorer from the recall, saying it would let dealers choose either Firestone or non-Firestone tires on 2002 Explorers and Mountaineers.

With some dealers in Sun Belt states reporting that 30 to 40 percent of their Explorer buyers don't want Firestones, the tire maker's share of business on the new SUVs appear to be shrinking.

Several analysts said Ford would lose few to zero customers for the new Explorer because the company has been fairly successful at convincing buyers that the blame lies with Bridgestone/Firestone, not Ford or the Explorer.

"Other than the initial question of `What tires are on that?' that's it," said Brown. "Once the dealer says there's no Firestones, the customer won't care."