Ford Moves Upscale with the Flex

By Igor Holas

02.26.2008


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.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

Share This Post On

9 Comments

  1. The fly in that ointment is that Ford buyers aren’t used to paying for quality, preferring to buy a leftover or a program car at 1/2 price. The Taurus X hasn’t exactly fown off the lots as it is. When will Ford learn to stop pricing its wagon/suv/cuv vehicles $thousands above the equivalent sedan from the same platform?

  2. I agree. It’s going to be very difficult for Ford to get a lot of their customers to pay more. Ford makes some great cars in Europe now and Ford doesn’t sell them here because those cars are small and expensive. Ford’s customers in the US are used to buying cars “by the foot”.

  3. Ford is not the only one – People are willing to pay the price for the SUV/CUV/Wagon and automakers are happy to do that. Mazda officially said that they could have released the CX-9 as a minivan, but the market would demand a price about $4,000 lower (fr practically the same car) – so they built the Cx-9 as a SUV.

    One thing to remember is that CUV’s include some additional hardware no present on the sedans, like stronger subfrane to allow towing and mild off roading.

    Finally, the Flex is WAY larger, and more luxurious than the current Taurus, it demands a higher price. I am almost positive the new 2010 Taurus will move upscale and more expensive.

    Igor

  4. How is the Flex interior volume/flexibility going to compare to a minivan’s?

    I was in the camp of those opposed to having a minivan in my driveway, but it’s really not so bad. I’m almost 33 years old and don’t have anyone to impress but my wife, and she loves it. 🙂

    Igor, you’ll have to check our Sienna if we get together. Not a thrill to drive, but it’s spacious and very comfy.

  5. flexibility-wise, the Flex is on par.
    Really, the interior of the Flex is 90% comparable to the GM Lambdas. The difference is that Flrx has more space in the second row ( mostly legroom) and the Lambdas have wider three passenger third row.

    The Lambdas have slightly taller roofs, but also higher floors, so the headroom is close to identical.

    The Lambdas do have a bit more cargo space, and are about 2 inches shorter on the outside.

    that said, compared to the minivan – both pale in comparison – the Sienna has 39 inches in the third row! (compared to 33-34 in Lambdas and Flex), the Sienna has more headroom, more cargo space, and is cheaper!

    But the SUV craze continues, and minivan stigma strengthens – and that is what is at play.
    Igor

  6. I have driven the Sienna for a 4 day rental. I could not wait to return that vehicle. I own a Taurus X and that is far more of a joy to drive, exciting even, compared to the minivan. Unless you absolutely need the slightly larger volume that a minivan offers over the Flex, get the Flex.
    It will also offer a EcoBoost model that will not only allow for much more towing, but more thrills as well. Minivans no longer make sense to me. Flex is the future.

    Oh, and to those who think that a Flex can’t sell for $34K, check your facts. Most of Ford’s latest vehicles sell at premium content/price levels, where before that was not true. You offer the right things and people want them. I understand this Flex takes Ford’s recent rapid rise in quality to a new level, exceeding their own expectations as they prepare to launch.

    Ford=quality

  7. I’m not Nostradamus but I think then the Ford Flex will caught Toyota’s and Honda’s pants down and it’ll be a big surprise for them. And I think then the Flex will the big beginning of Ford returns to the black ink just like the 1949-51 models did.

  8. I like Fords. A lot. But this? It’s a big ugly expensive box.

    The design cues are very edgy/out there, so it will likely sell well for the first year and then sales will plummit.

    Why would someone buy this when they could buy an Expedition instead and get RWD, better towing and higher ride heigth?

    I also really hate the way Ford keeps making options standard to they can raise the price and packaging options together so that you are forced to buy something you don’t want.

    For example, every option package on the Mustang comes with Leather seats. Every car on the lot has at least one option package, so it’s impossible to get cloth seats unless you custom order. I hate leather. I’m in Arizona. The last thing I ever want to do is get in a car in summer with leather interior. Why should I have to buy car seats to cover the leather I didn’t want in the first place?

    Same thing with my father’s F-150, every package came with Sirius Radio.

  9. If Ford and GM are going to stop making cheap so-so cars, then what does that mean for the buyers of those cars? Are they going to buy more expensive but much better Fords and GM cars, or will they now buy Chryslers and Chinese and Indian cars?

Submit a Comment

Your email address will not be published.