Ford to Fire first Salvo at GM in Texas with Suburban Competitor

FORT WORTH, Texas -(March, 1994)  It’s been called the “National Car of Texas,” and so it is here, in the Lone Star state, where two Detroit titans will wage a battle that could be remembered as an automotive Alamo.

GM officials and industry analysts credit the new Suburban's aerodynamic design and carlike appointments - it offers front and rear air conditioning and heating controls - for helping it boost the size of its market.

GM officials and industry analysts credit the new Suburban’s aerodynamic design and carlike appointments – it offers front and rear air conditioning and heating controls – for helping it boost the size of its market.

In late 1996, Ford Motor Co. is expected to field a competitor for General Motor’s beloved Suburban, hoping to kick the hay out of a vehicle that owns its niche in the industry like no other.

Of the 115,000 Suburbans GM sold through its Chevrolet and GMC dealers in 1993, about 35 percent were delivered in Texas, where the Suburban is as much a part of the culture as Justin boots, Stetson hats and long-necked beers.

“Texas will be the battleground market,” said a Ford source in Detroit. “If we can’t make it in Texas, we won’t cut it in Oklahoma, Louisiana, Arkansas or any other state where the Suburban sells well. We need Texas.”

Ford officials will say little on the record about their coming new entry.

Ford Chairman Alex Trotman said at the Chicago Auto Show in late January that the vehicle was coming and would be based on the company’s big Bronco, which is now sold in what is called the “large utility segment.”

“We realize we have a hole in our product line,” said Mr. Trotman. “We plan finally to really get into that business in a major way.”

Mr. Trotman would not go beyond that comment for reporters, but industry sources say the new vehicle, which may or may not carry the Bronco name, will be out in late 1996 as a 1997 model.

It will be a restyled, four-door version of the Bronco and will match what the Suburban offers in both power and room.

The only other competitors in the “heavy duty wagon” segment are the Toyota Land Cruiser and the Land Rover, both low-volume sellers.

Introduced nearly 60 years ago, the Suburban has long posed a problem for unhappy Ford dealers.

“We have been trying to talk them into (building a competitor for the Suburban) for 20 years,” said Charlie Hillard Jr., the Fort Worth Ford dealer.

“We’re delighted. We have never competed in that market at all. It has been totally owned by Chevrolet.”

Mr. Hillard said he has been told the redone Bronco would be out in two years.

Richard Greene, president of Vandergriff Chevrolet in Arlington, Texas, said GM dealers have been expecting Ford’s decision since the sport/utility market began to boom in the late 1980s.

“Anytime there is a vehicle that has the kind of success the Suburban has had, someone will come up and try to compete with it,” said Mr. Greene. “It’s just another example of the toe-to-toe competition between Ford and GM that has gone on forever and will go on forever.”

Mr. Greene, however, said he would expect any new product from Ford to be formidable competition.

“Ford is a good competitor,” said Mr. Greene. “I think what they’ll do is see if there is a way for them to improve on what people like about the Suburban. I think Suburban owners are loyalists and are very committed to their vehicles. We do lots of repeat business.”

Ford has studied the market for years, but felt the niche was too small and that any shot at loosening the Suburban stronghold would likely prove unprofitable.

“The thinking has always been that two companies could not make a profit at it,” said Jim Bright, Ford’s spokesman in Dallas. “Obviously, that has changed. The decision is market driven.”

Ford’s change of heart may have been fueled by GM’s success since the release of an all-new Suburban for the 1992 model year.

The vehicle was given an all-new exterior and interior look, while retaining the size and ride that made it a top-selling full-size sport/utility vehicle.

GM designers lowered its step-in height, while improving its load floor length, towing capacity, cargo space and front and rear legroom.

The truck was also given an anti-lock brake system as standard equipment. It has a 5.7-liter electronically fuel-injected, V-8 engine as standard equipment.

GM officials and industry analysts credit the new Suburban’s aerodynamic design and carlike appointments – it offers front and rear air conditioning and heating controls – for helping it boost the size of its market.

Sales in the heavy-duty wagon market have gone from a paltry 67,223 in 1991 to more than 128,000 last year, with analysts giving the new Suburban credit for the growth.

Mr. Hillard believes Ford’s decision may also be due to its success with the Ford Explorer.

When the Explorer entered the market as a four-door compact sport/utility three years ago, it went head-on with industry legend Jeep.

Explorer has been the compact sport/utility sales leader for the past three years, but its presence has created a growing market. Three years ago total industry sales were 800,000. Last year, nearly 1.2 million sport/utilities were sold in the United States.

“I think we’re getting this Suburban competitor because of the expansion of the total sport/utility market,” said Mr. Hillard. “It has gotten to be such a huge market and is growing faster than any market there is. Everyone is jumping in and we’re no exception.”

Industry analysts agree.

“I think Ford has noticed that GM has had a lot of success with Suburban and has grown the market,” said Jean-Claude Gruet of UBS Securities in New York. “They may be thinking that just as the minivan and sport/utility market has absorbed new capacity, maybe the same thing can happen in this area.

“My gut feeling is that this market has good growth characteristics.”

The Suburban market is probably the most profitable in the entire sport/utility segment.

The trucks generally sell at close to $30,000, depending on options and equipment packages.

Its customers rank among some of the most affluent for any GM product.

The average Suburban buyer, according to GM, is a 44-year-old man earning $74,389 annually.

March 18, 1994, Page 1

Author: Michael D. Towle; FORT WORTH STAR-TELEGRAM