Explorer Sales Rise Despite Tire Problems

By TERRIL YUE JONES

Oct. 4, 2000 12 AM PT

TIMES STAFF WRITER

DETROIT —

Ford Motor Co. reported Tuesday that sales of its beleaguered Explorer rose slightly in September despite being at the center of controversy over rollover accidents linked to Firestone tire failures.

Ford said it sold 37,510 Explorers last month, up 1.1% from the 37,119 in September of last year. Sales of the country’s best-selling sport-utility vehicle were considered especially strong given that a totally redesigned 2002 Explorer will go on the market in a few months and sales are usually sluggish when a model reaches the end of its cycle.

Nearly 80,000 new Explorers were sold after the Aug. 9 recall of 6.5 million Firestone tires, most of which were on Explorers, an indication that Ford has not suffered from the firestorm surrounding accidents that have killed at least 101 people in this country and dozens more in several foreign countries.

“Buyers going out there realize the new tires are safe, and if they don’t feel they’re safe, Ford will replace them,” said Greg Salchow, a Detroit-based automotive analyst at the investment bank Raymond James & Co.

Ford has continued selling Explorers with Firestone tires that are not subject to the recall, but dealers routinely replace tires for customers who insist on another brand. It is not clear how many Explorers sold in the last two months had Firestone tires.

Ford sees continued strong Explorer sales bolstering its assertion that the accidents were caused by bad tires, not a poorly designed vehicle.

“You can’t sell 40,000 [Explorers] in August and 37,000 in September in the environment we’ve been operating in unless substantial numbers of consumers have confidence in the product,” said George Pipas, Ford’s chief sales analyst.

The strong sales numbers came as Congress moved Tuesday to allow a new federal rollover rating system, which is aimed at sport-utility vehicles such as the Explorer for their tendency to flip over, sometimes resulting in fatal or crippling injuries.

Data show that SUVs typically are two to three times more prone to fatal rollovers than passenger cars, though Ford executives say Explorers have experienced a rate of fatal accidents 17% lower than comparable SUVs.

The proposed NHTSA rollover ratings would give vehicle models one to five stars, with five stars indicating a high level of stability and one star reflecting a high rollover propensity. The ratings would be based on a static stability factor, calculated by dividing the track width of the vehicle by twice the height of its center of gravity.

Under the proposed ratings system, passenger cars would routinely get four or five stars, while no SUV would receive more than three stars.

Explorers, whose static stability factor is slightly below average for SUVs, would get two stars. The few SUVs that would get three stars include Dodge Ramcharger, Honda CRV, Jeep Wrangler, Chevy GeoTracker/Suzuki Sidekick and Ford Bronco--not Bronco II, which would get one star.

Pipas said he expected a slowdown in sales in the fourth quarter of this year and first quarter of 2001 because the St. Louis factory that makes the Explorer was shut down for four weeks along with two other plants to divert new tires to customers who wanted to replace recalled tires.

That resulted in lost production of 15,000 vehicles, a gap that will show up in the market this quarter, Pipas said. Sales will also slow down as production of the new Explorer begins next month and gears up to full speed.

Overall U.S. auto sales grew 5.3% in September, appearing on their way to another blistering year. Ford sales overall were up 3.4% in September, with light trucks up and passenger cars down. DaimlerChrysler’s Chrysler arm saw sales rise 5.2% to set a record for September.

But General Motors Corp., saying the month’s sales fell 3.3%, announced unprecedented incentives on more than a dozen cars and trucks. GM offered a new program of zero-interest rate loans for five years on 15 of its 2000 model year vehicles in its Chevrolet, Pontiac-GMC, Oldsmobile and Buick divisions to boost sales as the industry’s outlook weakens somewhat.

Ford also raised rebates Tuesday on a number of models, up to $2,500 on the 2000 Windstar minivan, and boosted the rebate on the 2001 Explorer from $500 to $1,000, and kept it at $1,500 for the 2000 model.

Although GM was dragged down by slowed sales of light trucks, the market overall was tracking at an annualized rate of slightly more than 18 million vehicles, well ahead of last year’s record of 16.9 million.

“It’s not an unsustainable pace,” said Salchow, the automotive analyst at Raymond James. “In a general sense incentives are driving it, but not across the board.”

GM didn’t appear to pick up buyers from among Explorer owners, said Bill Lovejoy, GM’s group vice president for vehicle sales, service and marketing. “We asked our dealers, ‘Why aren’t you going after Explorer owners aggressively?’ And the answer was, they didn’t want [used] Explorers on their lots because they didn’t know how to dispose of them.”

Normally GM dealers try to lure Explorer owners to trade in their SUVs for Chevrolet Blazers or GMC Jimmys, “but they didn’t want to take in trade-ins because there’s so much uncertainty about them [Explorers],” Lovejoy said.

Sales of Ford trucks were up 8.8% and cars down 4.4%. GM sales of trucks, which account for more than 50% of GM’s vehicle mix, were down 10% while passenger cars were up 3%.

In a separate incentive deal, GM said Monday it would offer a payment-free year on all Oldsmobiles, with no down payment, no monthly payments and no interest for a year. That plan applies to 2000 and 2001 model year cars and trucks, through Jan. 2.

Sales of Oldsmobiles, which include the Alero, Intrigue and Aurora sedans, the Bravada SUV and Silhouette minivan, are down 20.7% so far this year.

“Oldsmobile’s problem is just getting people in to drive the cars,” analyst Salchow said. “It’s a problem of the image of the vehicles themselves.”

Times staff writer Myron Levin contributed to this report.

* LINGERING TOLL

Injuries from Firestone tire failures have left many people disabled. A1

* MORE PROBLEMS

Continental General may have understated a tire failure problem. C4

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GM, Ford Lead Pack

U.S. sales of leading auto makers through the third quarter compared with the same period last year, in millions of units:

GM*

1999: 3.8