“You tried your best and you failed miserably. The lesson is, never try.”
Homer Simpson’s words came to my mind when the news came through this week that Ford Australia is dropping the Escape at the end of 2023. It’s no secret that the Blue Oval has struggled with the mid-size SUV, or to be frank, anything other than the Ranger and Everest.
For whatever reasons, the company has simply failed to cut through with an Australian audience when it comes to its non-Ranger/Everest products. In 2022, the Escape finished 13th on the ‘SUV Medium Under $60,000’ segment sales chart, only narrowly ahead of the BYD Atto 3 despite the electric Chinese model going on sale in the second half of the year. The other models it beat are obvious niche players, such as the Cupra Formentor, Peugeot 3008 and Citroen C5 Aircross.
But to give up completely on Escape is still a surprising and somewhat shocking decision from Ford. If for no other reason that the ‘SUV Medium’ segment is the biggest single market in the Australian car industry – selling 216,151 examples in 2022. Not having a model to offer rules you out of such a large percentage of the buying public, which isn’t something Ford should be doing if it wants to grow its sales locally.
Ford’s reliance on the Ranger remains obvious. The brand’s sales were down 6.7 per cent in 2022, in part due to the changeover from the previous Ranger to the new model. With supply of the new Ranger now flowing, the brand’s sales are tracking more than 40 per cent up during the first three months of 2023.
With Ford delivering more Rangers in a month than it sold Escapes in all of last year, clearly losing the SUV won’t make a huge difference on its bottom line. But it’s the message it sends out about the brand’s outlook that should concern Ford dealers and supporters – it has given up on trying to beat Toyota, Mazda and co. in markets where it doesn’t think it can be competitive.
The Escape isn’t a class-leading SUV but nor is it a dud. It should be competitive in the segment with the right support behind it. As we’ve previously written, Ford Australia has tended to take a more passive rather than proactive strategy when it comes to the Escape and the way it is marketed.
By conceding defeat against the Toyota RAV4, Mazda CX-5 and similar other models, Ford will have to fight twice as hard in future to regain the ground it is giving up now. If any company should understand that concept it should be Ford, which dropped a V8-powered Falcon in the 1980s and never really recovered its position against its arch-rival, the Holden Commodore.
Having said all that, the more you scratch away at the surface and look at the cold, hard facts, it’s actually understandable why Ford Australia has taken this decision. The Escape sold here is a European-focused model and, as such, local supply has always been constrained and was seemingly always likely to be. The company found itself in a Catch-22 – not selling enough Escapes to justify increased supply, so supply constraints limited its sales potential.
The silver lining to this shock decision is that it could set-up Ford for a transition to an electric SUV future in Australia, something it desperately needs and likely will be its only option next decade when the European market (where many of the local models are sourced from) becomes dominated by EVs. It also fits with Ford’s Global CEO, Jim Farley, recently declaring the company is unlikely to build any more two-row SUVs with internal combustion engines.
So it seems whether Ford Australia is ready or not, the electric EVs are coming.
Unfortunately, the local operation will require patience and a long-term view to see this move pay-off – if it ever does. Ford Australia recently confirmed that the all-electric Mustang Mach-E SUV will arrive locally in the second half of 2023, adding some much-needed EV excitement to its range of electric vans.
However, the Mach-E isn’t the replacement for the Escape, it’s likely to cost upwards of $70,000 – which is clearly not in the same neighbourhood as the RAV4, CX-5 and the like. Instead, the likely replacement for the Escape is the recently-revealed Explorer EV.
The Explorer is a European-focused five-seat SUV, will be offered in right-hand drive in the United Kingdom and is based on the same underpinnings as the Australian-bound Volkswagen ID.4. However, as the Mach-E demonstrates, Ford Australia’s spot at the lower end of the Blue Oval pecking order means it’s unlikely we’ll see the Explorer here until 2025 at the earliest, but probably 2026 or later (for context, the Mach-E went on sale in the UK in late 2020, three years before its Australian arrival).
This could be a cheaper alternative to the Mach-E and give Ford an electric option for families at a time when more and more will be looking to make the switch to an EV. Obviously, a lot will come down to price and position, but it has the ingredients it needs to be a success and eventually fill the hole left by the Escape.
The reality is it will go one of two ways. The first option is the clean break between Escape and Explorer could help Ford return to the ‘SUV Medium’ market with a fresh start and it enjoys similar success as the likes of BYD and MG. But the second scenario is customers will have learnt to live without Ford in that segment and simply ignore the Explorer, or any similar option, and continue to buy Toyotas, Mazdas, Hyundais, etc whether they be petrol-powered or electric.
Obviously, the point The Simpsons writers were trying to make with Homer’s line about never trying, is the absurdity of just giving up when you fail. Instead, we should always look to learn from our failures and come back better prepared the next time. Hopefully that is the lesson Ford Australia has taken on board and if or when the Explorer arrives locally it will be positioned right to return the brand to the vital mid-size SUV market with a competitive offering.
Keyword: Is the Ford Explorer the great white hope for the Blue Oval? Why Ford's decision to dump its Toyota RAV4 and Hyundai Tucson rival is a shock - and what Ford can do to recover | Opinion