Ford Moves Upscale with the Flex
For the past several decades, Ford’s method of selling cars has been the premise of offering the same features as their competition for a cheaper price. This worked fine, but it left Ford vulnerable to rapid segment shifts. With releasing models that were just good enough (albeit better values), Ford had no breathing room should the competition move the game on. A clear example of this pitfall can be seen with the Fusion. When released in 2005, the sedan was right near the top of its segment in power, economy, refinement, and any other relevant measure. However, in quick succession, the new Toyota Camry, Nissan Altima, Saturn Aura, Honda Accord, and Chevrolet Malibu moved the game way past Fusion’s capability. Only three years after introduction, Ford will have to perform almost a complete overhaul on the car to keep it competitive.
Recently, GM broke off from the same flawed marketing strategy, and with its excellent new full-size crossovers and mid-size sedans proved to the world that there is talent left in Detroit. These new models were priced much higher than earlier models, right on par with their Japanese competitors, but often offered a level of execution and features a notch above that same competition.
The first indication of Ford moving in the same direction was the Edge. The mid-sized crossover debuted with features clearly above its main rival, the Nissan Murano. Now, despite the Murano’s redesign, the Edge is still very much competitive, and will need only a standard mid-cycle refresh to once again achieve the edge over Murano.
However, the true and final shift in Ford’s value paradigm will arrive with the new Ford Flex. With the Flex, Ford is moving significantly upscale, from the automotive basement to the level of the aforementioned Japanese competition, and maybe even a notch above. Ford will no longer be the cheap alternative to Toyota and Honda, barely matching their features. With the Flex, Ford will position itself as the automaker that will offer more features for the same money as the competition.
When the Flex goes on sale in a few months, the base price for a SE FWD model will be $28,995. The much more mainstream SEL model will begin at $32,770 for front-drive, and $35,405 for all-wheel drive, and the top-line Limited model will begin at $34,620 (front wheel drive), and $37,355 (all-wheel drive). (All prices include $700 destination charge).
People trading up from the Freestyle or the Taurus X (arguably the predecessors of the Flex), should get ready for quite a sticker shock. While the base price is only $2,000 above the outgoing Taurus X, the difference climbs to almost $6,000 for higher-end trims. However, when the price is adjusted on feature-by-feature basis, the price difference falls to about $4,000. The Flex trim levels are all significantly better appointed than comparable trims from Taurus X, eliminating many options and packages, and including them standard on trims such as SEL or Limited.
Indeed, comparing the Flex pricing to its main competitors, using the TrueDelta.com price comparison guide, a pattern is easily spotted: based on trim-level pricing only, the Flex seems to cost more than its competitors, but once price is adjusted feature-by-feature, the price differences decline and sometimes disappear. Hidden in the higher price of the Flex is a boat-load of standard features previously included in obscure option-packages or not offered at all by Ford.
As an example, let me use the TrueDelta.com price comparison tool to compare the Flex Limited AWD to the GMC Acadia SLT AWD, and Toyota Highlander Limited AWD. We chose the option “maximize shared features” in this comparison, so the system will compare well-appointed models. With this option, the system will go through the options lists of both cars, and select all those available on both models. Once these comparably-equipped models are found, the system provides two price comparisons. First, it offers a trim-level price – a price one would actually pay for a car optioned as specified. Second, the system compares all the features included with the trim and options selected, and adds a “feature adjustment” to the Trim level price. This feature adjustment reveals the true value of the car, by accurately imputing, and then calculating the worth and value of all the standard and optional features installed.
Comparing the Flex and Acadia, the optioned models come in at $44,115 and $45,695 respectively (Flex is cheaper by about $1,580). However, the Flex packs in about $225 of extra features, making it about $1,805 cheaper than the Acadia.
Comparing the Flex to the Highlander, the optioned models come in at $44,080 and $42,868 respectively (Highlander is cheaper by $1,212). However, compared to the Highlander, the Flex packs in extra $1,550 worth of options, more than eliminating the difference in the sticker price (Flex becomes the better value by about $338).
It is worth noting, however, that compared to all three of these, a minivan still offers more space, and lower price. But you have to want a minivan in your driveway.
The Flex is a risky introduction for Ford, but one desperately needed. The visual punch delivered by the boxy wagon, its well appointed cabin, and now, its well-chosen price points treat many of the previous product ills of the third-largest automaker. Ford will need to work very hard to make Flex work. For GM to pull off the change in marketing mantra, it needed a perfectly executed, well-received, and well-marketed product. At this point, the Flex seems to have the potential to be such a car; hopefully the Ford will take all the right steps to ensure this potential is realized, and the Ford brand will start heading in the right direction.
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