Now might seem like an odd time to unveil a new line of SUV, but that’s exactly what happened recently with one of America’s top carmakers. Ford (NYSE:F) announced recently that it was going to release a new line of off-road, open-air SUV based on a much older line of Bronco SUVs that used to be sold dozens of years ago. It’s a big move from the age-old carmaker, which is trying to siphon away market share from Chrysler’s Jeep brand.
Ford is planning to price its new Bronco line at just under $30,000, which is roughly in line with a Jeep Wrangler. The highest-end models will come in around $60,000, with there being both a two-door as well a four-door model available to buyers. Although it’s definitely questionable whether Ford will manage to succeed in stealing away buyers from Jeep fans, what is clear is that there’s a growing market for these types of outdoor vehicles. Annual sales for the Jeep Wrangler have more than doubled over the past decade, growing from less than 100,000 in 20210 to almost 250,00 by 2019.
“With Bronco, Ford is making a clear push into the off-road segment of the [North American] SUV market,” wrote Credit Suisse analyst Dan Levy in a note on Monday. “While we expect Wrangler to remain the leader in the off-road segment, we nevertheless see attractive opportunity for Bronco given its heritage.”
The analyst went on to say that should Bronco sales end up reaching around 125,000 units, something that’s definitely achievable, Ford could see as much as an extra $1 billion in revenue. This assumes a baseline profit of $7,500 per car. One a percentage level that would make the Bronco one of Ford’s most profitable car lines.
The one issue for Ford might be the timing of this announcement. U.S. vehicle sales are expected to decline by around 25% in 2020, primarily due to this pandemic. Of course, the timing of this announcement has more to do with the fact that Ford was planning the development of the Bronco long before the coronavirus came out. That’s the potential downfall when it comes to projects like these; once it comes time to market a new model, the market situation might not be favorable anymore.
For old school car collectors, the Bronco has remained a cult classic. Older models from the 60s and 70s can sell for as much as $100,000 depending on the specific year that the car was produced. Dealerships have been asking Ford to develop a new version of the Bronco for a while now, not just to capitalize on its renown but also to compete with similar equivalents from Chrysler. Now it seems that this is finally becoming a reality, something that both SUV fans as well as Ford shareholders will look forward to.
Ford Company Profile
Ford Motor Co. manufactures automobiles under its Ford and Lincoln brands. The company has about 14.3% market share in the United States and about 7% share in Europe. Sales in North America and Europe made up 65% and 21% of 2018 auto revenue, respectively. Ford has about 199,000 employees, including 55,400 UAW employees, and is based in Dearborn, Michigan. – Warrior Trading News
