Ford's Big Bet: New Electric SUV to Wear Mustang Logo

Date : 11/18/2019 @ 12:55PM
Source : Dow Jones News
Stock : Ford Motor Company (F)
Quote : 9.02  0.09 (1.01%) @ 12:53AM
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Ford's Big Bet: New Electric SUV to Wear Mustang Logo

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By Mike Colias 

LOS ANGELES -- Ford Motor Co. is counting on the Mustang name -- a badge long worn by its powerful, muscle car -- to spark the auto maker's transition to an electric future.

Ford is expanding the Mustang nameplate beyond its traditional two-door sports car for the first time in the vehicle's 55-year history, a bid to keep the famed insignia relevant at a time when interest in performance vehicles in the U.S. is waning.

A new all-electric SUV, unveiled by executives at an event in Los Angeles Sunday, will be called the Mustang Mach-E and wear the galloping pony logo.

The company is betting use of the popular Mustang name, combined with an SUV design that mimics the sports car's sleek profile, will help it attract new buyers to the Ford brand. Analysts say it could bring both fresh interest and backlash from purists, and risks diluting a nameplate that has cultivated a loyal following for more than half a century.

Introduced in the mid-1960s, the Mustang was one of the original pony cars -- loud, fast, two-door sports cars -- that became a fixture of American culture. The Mustang has appeared in more than 500 movies, including an iconic chase scene in the 1968 movie "Bullitt" with actor Steve McQueen at the wheel.

"Mustang is what people think about us around the world," said Jim Farley, Ford's president of new business, technology and strategy. He said executives had many debates about "what's the right thing to do here."

The decision to name the new SUV a Mustang also reflects a confluence of trends buffeting the global car business. Stricter tailpipe-emissions rules globally are prodding car companies to develop electric cars. And the success of electric-car specialist Tesla Inc. has pushed auto makers to offer their own versions with eye-catching looks and longer battery life, rather than small cars with staid designs that traditional car makers have tried for a decade, analysts say.

Meanwhile, a dramatic shift in consumer preference for SUVs, especially in the U.S., shows no sign of slowing. Ford already is phasing out the Fusion family car and other slow-selling sedans from showrooms, which eventually will leave the traditional Mustang as the sole car in its U.S. lineup.

Ford made the decision to call the new SUV a Mustang midway through its development. About a year ago, top executives huddled with engineers and designers at the company's Dearborn, Mich., headquarters, in a 12th-floor conference room filled with white boards and vehicle sketches, said Mr. Farley, who has owned eight Mustangs.

Bill Ford, the company's executive chairman and great-grandson of founder Henry Ford, was at first apprehensive about using the Mustang name.

"I was actually pretty skeptical. You don't mess with an icon," Mr. Ford said at the event Sunday. But he said the SUV should overcome the stigma that electric cars aren't fun to drive.

"The issue to date has always been, if you wanted performance you had to give up the green aspects," he said. "This technology has finally gotten to a place where you can actually have both."

Ford executives declined to say whether the Mustang name would expand to more models in the future.

The new Mach-E, scheduled to go on sale late next year, is expected to start at around $44,000 and offer at least 230 miles in travel range off a single battery charge. While the Mustang coupe is built in Michigan, this new SUV will be produced at a Ford assembly plant in Mexico, the company has said.

Mustang's global sales have been sliding, despite a successful expansion into Europe, China and other overseas markets in recent years. Sales in the U.S. have fallen every year since 2015, the last time Ford released a redesigned version of the car, according to research firm LMC Automotive.

Other sports-car brands are also introducing electric vehicles. Porsche AG, for instance, plans to launch its first battery-powered car, the $104,000 Taycan, next year.

That Ford is making the transition on both fronts -- electric and SUV -- in a big wager on one of its most recognizable nameplates, said Chantel Lenard, a former Ford marketing executive who teaches at the University of Michigan's business school.

"The Mustang name gives you instant recognition. It's a shortcut in the consumer's mind that the vehicle represents sportiness and heritage and rebellion," Ms. Lenard said. "One risk is that those characteristics aren't relevant to the new consumers you're trying to reach."

Chris Lemley, a Ford dealer in the Boston area, said the move could prove controversial with some die-hard fans. But he supports the idea because it signals confidence in a new technology that customers might be skeptical of.

Ford plans to build about 50,000 Mach-Es in the first year of production for sale in the U.S. and Europe, product chief Hau Thai-Tang said in an interview. That would be more than twice the current production rate of General Motors Co.'s Chevrolet Bolt electric , but less than a quarter of Tesla's Model 3, its lowest-priced vehicle.

Analysts say the U.S. sports-car market has been fading for some time with rising vehicle prices putting models out of reach of would-be buyers and younger drivers showing less enthusiasm for growling engines and raw power.

Market share for performance models in the U.S. sank to 2.3% this year, from 3.5% five years ago, the biggest drop among six dominant body styles tracked by LMC.

The Mustang Mach-E is among the first mass-market models to take on Tesla with a combination of long battery range, sporty design and performance driving at a reasonable price, said Jim Sanfilippo, a California-based automotive-marketing consultant.

"It will get a lot of attention. But it also raises the expectations for what this car has to be," Mr. Sanfilippo said.

Write to Mike Colias at Mike.Colias@wsj.com

 

(END) Dow Jones Newswires

November 18, 2019 07:40 ET (12:40 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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