First Drive: Ford's Edge

Ford needs a hit to lift its aging lineup. The all-new Edge crossover offers good looks and decent gas mileage, but the price isn't cheap

by David Kiley

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Ford executives, reeling from financial and market share declines and in the middle of another phase of restructuring, say the new Ford Edge crossover ute is by far the most important vehicle it will introduce this year. While it represents just one of 23 Ford brand models listed on such sites as Edmunds.com, the success of the Edge will be nothing short of a referendum on whether the struggling company and current management are on the right track.

Ford (F) is also launching an all-new Ford Expedition this fall, as well as a Mustang Shelby GT500 (see BusinessWeek.com, 6/9/06, "American Idol") and an all-wheel-drive version of the Fusion. Among its other brands, Volvo has an all-new S80 sedan and Lincoln is coming out with a crossover utility, the MKX, based on the Edge.

But it's the Edge that's drawing the stares from Wall Street, the media, Ford watchers, and the company's own management. That's because there is nothing more important than shoring up the Ford brand with a solid product that is launched with top-notch marketing.

First Big Move

Following on the successful launch and public reception of the Ford Fusion sedan last year, the Edge represents a "new Ford" that current management is banking on to do nothing less than save the company. It advances a new design theme that will be infused in all the new Fords, and is being brought to market with advertising and marketing meant to be more engaging than Ford's traditional flag-waving communications.

With demand for midsize and large SUVs waning as baby boomers age out of the desire for big, bulky truck-based vehicles, and with everybody wary of the return of high gas prices, Ford is moving to beef up its offerings of passenger cars and lighter so-called crossover utility vehicles that are based on cars instead of pickup-truck platforms. Putting aside the six-year-old Escape, which is more SUV than crossover, the Edge is the first big move by Ford in the growing segment.

Ford is playing catch-up in this segment that its executives say will likely top 3 million units per year by 2010, up from just 500,000 in 2000. Nissan (NSANY), Toyota (TM), Honda (HMC), General Motors (GM), and even Mitsubishi have been ahead of Ford on crossover offerings with models such as the Nissan Murano, Honda Pilot, Toyota Highlander, Lexus RX330, Mitsubishi Outlander and Endeavor, Chevy Equinox, and Saturn Vue.

Strategic Errors

It has been a shocking shortcoming at Ford, a name that, because of its tradition and brand heritage, should have been doing a better job of leading the industry on defining the family car.

Ford long leaned on the Explorer as its "family car," and it proved extraordinarily popular throughout the '90s as many baby boomers opted for the high, commanding seating position and off-road utility image. Ford was so in love with the success and high profits of the Explorer, it allowed its once breakthrough Taurus sedan to wither into a scoffed-at rental car and never seriously pursued the minivan segment with a design that could compete with Chrysler or Honda.