Ford aims to make big dent in crossover arena

By Martin Zimmerman

March 19, 2007 12 AM PT

Times Staff Writer

For Lorna Deshane, meeting the Edge was a case of love at first sight.

The 75-year-old grandmother was smitten a few days before Christmas when she drove onto the lot at Villa Ford in Orange County and there sat a newly arrived Edge -- Ford Motor Co.’s entry in the fast-growing market for so-called crossover utility vehicles.

“It was sitting about 25 feet away from me, and I said to my husband, ‘Oh my God, what is that?’ ” recalled Deshane, a resident of Orange and lifelong Ford owner who isn’t above a bit of hyperbole. “I went over and put my hand on it and started getting goose bumps.”

She drove home in a candy-apple red Edge, soon to be adorned with a vanity plate: 1RDEDGE.

“Ford,” Deshane said, “has a winner here.”

It better, because the automaker definitely needs a hit as it tries to execute a painful restructuring in the wake of its worst loss, $12.75 billion, last year.

The stakes are especially high in the hot market for crossovers, which aim to deliver the versatility of a sport utility vehicle with carlike handling and gas mileage. Although not as profitable as the full-size SUVs that padded automakers’ bottom lines in the 1990s, crossovers are seen as a key growth area for the industry.

Early returns for the Edge -- which hit showrooms in December -- are somewhat promising.

As of the end of February, Ford had sold 15,764 of the crossovers. Though not blockbuster numbers for a company that sold almost 800,000 F-Series pickup trucks last year, they’re in line with Ford’s prediction that Edge sales would top 100,000 this year.

“It’s a success,” said analyst Alex Rosten of Edmunds’ AutoObserver.com, “but it’s not a runaway success.”

More important for Ford, though, the vehicle is generating some badly needed buzz and taking the edge off the drumbeat of negative headlines dogging the automaker.

“I get a lot of compliments,” said Ann Marie Pangaldi, a 48-year-old Trenton, N.J., resident who bought her Edge in mid-December. “People drive by on the road and point.”

One automaker has described the Edge as “the Mustang of crossovers,” said market researcher George Peterson of AutoPacific Inc. in Tustin, a reference to Ford’s successful reintroduction of its classic car two years ago in a move that revived the ‘60s “muscle car” segment.

The Edge debuted for critics last fall to good but not great reviews. Los Angeles Times reviewer Dan Neil called it “a very appealing, if not quite magical, bit of transportation.” And New England auto writers declared it the region’s “official winter vehicle” for 2007. But the New York Times smirked that Ford’s problem in promising innovative vehicles was that the public would then expect it to deliver them -- which, in the reviewer’s opinion, the automaker had failed to do with the Edge.

So far, the mixed reception doesn’t appear to be denting sales. Although it lags far behind Toyota Motor Corp.’s segment-leading RAV4, the Edge is holding its own against rivals such as Nissan Motor Co.’s Murano and Mazda Motor Corp.’s CX-7.

In February, the Edge, which lists for about $30,000 with a typical options package, claimed a 4.8% share of the mid-size crossover market, up from 4.4% in January. Significantly, as sales volume increased, the average discount that dealers had to offer to move the vehicles dropped to $1,413 from $1,543, according to Santa Monica-based Edmunds.

And the luxury version of the Edge, the MKX, is giving a boost to Ford’s Lincoln nameplate, which Peterson of AutoPacific described as “almost moribund” before the arrival of the new crossover counterpart to the MKZ sedan.

Ford makes no secret of the Edge’s importance. At the vehicle’s San Francisco debut in October, Mark Fields, the executive charged with turning around the automaker’s faltering North American operations, called it “the most important vehicle launch for us this year.”

Of course, to become a true breakout product, the Edge will have to appeal to buyers beyond Blue Oval devotees such as Deshane. Ford needs drivers who will switch from their Toyotas and Chevys, minivans and SUVs, people who have read all the negative press and are still willing to give the Edge a shot.

People such as Joe Crowder, a 39-year-old medical equipment salesman from Somerset, Wis.

Crowder isn’t young, urban or particularly edgy -- in other words, not the sort of guy marketers love to feature in car ads these days. But he needed a vehicle to replace the Chrysler Town & Country minivan his employer used to provide, something that would haul his gear and still get decent mileage on long sales trips around Minnesota, Nebraska and the Dakotas.

“I just liked the looks of the Edge and figured I’d get good dependability out of it,” said Crowder, who checked out a Toyota FJ Cruiser, among other vehicles, but settled on the Edge.

So-called conquest sales -- selling a vehicle to someone who previously drove another make -- have been running about 40% for the Edge, “a bit above expectations,” said Barry Redler, marketing manager of Ford’s SUV Group.

Still, prying drivers out of their RAV4s and Chevy Tahoes isn’t the only goal. Longtime Ford owners looking for a crossover need love too.

“Conquest sales are important,” Redler said. “But it’s just as important to keep people in the Ford family as their needs change. We need to give them that option before somebody else does.”

As a faltering member of the once-invincible Big Three, Dearborn, Mich.-based Ford has seen its share of the U.S. auto market dwindle to about 15% from almost 26% a decade ago. Annual vehicle production has fallen 36% this decade to about 3 million, and the company is cutting as many as 45,000 jobs in North America as part of its Way Forward turnaround plan.

It’s gotten so bad, analysts say, that Ford needs more than one hit to turn things around.

“The Edge helps Ford. It’s in a segment that’s growing where they haven’t had a viable model before,” said Tom Libby, Troy, Mich.-based analyst at J.D. Power & Associates. “But it’s only one ingredient. Ford needs competitive products in several segments.”

Mike Jackson, chief executive of AutoNation Inc. and a fan of the Edge, agrees.

“Ford’s pace on vehicle introductions needs to speed up,” said Jackson, whose company owns 47 Ford dealerships, including five in California. “You can look at almost anything in their lineup and say they need a successor sooner.”

Ford executives acknowledge as much. But a recovery has to start somewhere, and they hope it starts with the Edge.

“Will the Edge save Ford Motor Co.? No,” said George Pipas, the automaker’s sales analyst. “But it does have the potential to change people’s minds about our products.

“Success will be measured by whether it can be a game changer in its category,” Pipas said, “and whether it can change the way people look at our company.”

martin.zimmerman@latimes .com

(BEGIN TEXT OF INFOBOX)

Gaining traction

Unlike traditional truck-based sport utility vehicles, crossovers are built on car frames. The vehicles have more seating and storage capacity than a car, but often lack the towing power of an SUV. Here are some facts about crossovers:

The Toyota RAV4’s legacy

First crossover in the market, it was introduced in 1996

There are now 38 crossover models in the industry

Sales of crossovers in 2006 represented 13% of the total car and truck market

The Ford Edge

Assembly plant: Oakville, Canada

Weight: 4,073 pounds

Drivetrain: front-wheel drive (all-wheel drive optional)

Engine: 265 horsepower 3.5 liter V-6

Transmission: 6-speed automatic

Brakes: anti-lock brakes with stability control

Seating capacity: five