Ford (F) Sees Small SUV Segment 'Booming' Over Next Several Years
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Price: $13.04 +0.69%
Overall Analyst Rating:
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Dividend Yield: 6.2%
EPS Growth %: -22.2%
Overall Analyst Rating:
NEUTRAL (
Down)Dividend Yield: 6.2%
EPS Growth %: -22.2%
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Consumers like a vehicle that is roomy and fun to drive, but rising gas costs have many focusing their attention on more fuel-friendly vehicles like subcompact and electric cars. Neither is notably "fun to drive" or spacious.
That's why Ford (NYSE: F) said it expects the small SUV segment to remain hot for years to come. Ford is currently ramping-up production of its new 2013 Escape SUV, set to launch in the Spring.
Sporting a new design, the Dearborn, MI-based automaker said the vehicle has been a big hit in the Midwest and Great Lakes regions, but has failed to gain notable traction in New England and California, two huge markets for SUVs.
Small SUV sales rose from 800,000 in the early 2000s to just over 1.6 million in 2010, reports the Detroit Free Press, which quoted Ford U.S. sales analyst Erich Merkle. Further, Merkle sees sales continuing to be strong over the next eight years as baby boomers continue to retire, eliminating the need for minivans and large crossover vehicles.
Millennials will also be starting families, though fuel economy and cost of ownership will be two main priorities. Merkle commented to the Freep, "These two very large segments could very likely have a convergence of needs...baby boomers moving smaller and millennials moving larger. They meet in the middle."
Along with the Escape, other players in the segment include GM's (NYSE: GM) Buick Encore, Chevy Equinox, Toyota (NYSE: TM) RAV4, and Honda (NYSE: HMC) CR-V.
That's why Ford (NYSE: F) said it expects the small SUV segment to remain hot for years to come. Ford is currently ramping-up production of its new 2013 Escape SUV, set to launch in the Spring.
Sporting a new design, the Dearborn, MI-based automaker said the vehicle has been a big hit in the Midwest and Great Lakes regions, but has failed to gain notable traction in New England and California, two huge markets for SUVs.
Small SUV sales rose from 800,000 in the early 2000s to just over 1.6 million in 2010, reports the Detroit Free Press, which quoted Ford U.S. sales analyst Erich Merkle. Further, Merkle sees sales continuing to be strong over the next eight years as baby boomers continue to retire, eliminating the need for minivans and large crossover vehicles.
Millennials will also be starting families, though fuel economy and cost of ownership will be two main priorities. Merkle commented to the Freep, "These two very large segments could very likely have a convergence of needs...baby boomers moving smaller and millennials moving larger. They meet in the middle."
Along with the Escape, other players in the segment include GM's (NYSE: GM) Buick Encore, Chevy Equinox, Toyota (NYSE: TM) RAV4, and Honda (NYSE: HMC) CR-V.
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