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The New Economy

Ford Explorer: Will consumers pay more for less power?

Ford Explorer in 2011 comes with two engine options. The less powerful one saves fuel but costs more.

By Alissa FigueroaCorrespondent / July 26, 2010

A Ford logo is pictured during the unveiling ceremony of the new 2011 Ford Explorer in Chicago on Monday, July 26. The new Explorer will come with two engine choices - surprisingly, the smaller engine will cost consumers more. Ford says its four-cylinder engine will improve the vehicle's fuel efficiency by more than 30 percent.

John Gress/Reuters

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The 2011 Ford Explorer was unveiled Monday, reinforcing an automotive trend that would have been unthinkable a few years ago:

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Consumers will pay more for a less powerful engine.

Coming this fall, the 2011 Ford Explorer will sport a V6 engine, which promises to deliver 20 percent more fuel economy than the current Explorer, partly by reducing the vehicle’s weight. But consumers willing to pony up more cash can get a turbocharged but less powerful four-cylinder engine.

Why would anyone pay more for less power?

Fuel efficiency. Ford estimates that the four cylinder engine will improve fuel efficiency over current Explorers by more than 30 percent, putting it on par with the 2010 Toyota Camry V6.

Will consumers go for an SUV with an engine more commonly used on much smaller cars, like a Volkswagen Passat?

“I think they’ll pay more if the difference is so significant that it really make sense,” says Jeff Bartlett, deputy online editor of Consumer Reports. “Chevy did this with the Cruise – the more fuel efficient model was more expensive. It’s definitely a new trend.”

Since Ford has not announced pricing for the Explorer, it’s impossible to know at this point how long it would take for the smaller engine to pay for itself in fuel savings.

One thing is clear: The changes will make the Explorer competitive with other similar SUVs, like the Honda Pilot, which gets 18 miles per gallon (m.p.g.) compared with the current Explorer’s 15 m.p.g. (Ford says its four-cylinder Explorer will be more fuel-efficient than the Pilot.)

That’s appealing to buyers who are increasingly pragmatic when buying a vehicle. “We’re seeing fuel economy, safety, and quality as most important” in consumer surveys, says Mr. Bartlett.

For the vast majority of SUV drivers who don’t drive off-road, and rarely use their vehicles to tug boats or trailers, fuel efficiency and comfort could be more important than ruggedness, even though that’s the image Ford has touted with its Explorer in the past.

“There has been a sea change in consumer attitudes about gas mileage,” writes Jack Plunkett, CEO of Plunkett Research, a Houston-based automotive research and analysis firm, in an e-mail. “Consumers know that the price of gas is down somewhat now, but they’ve been burnt before and they don’t want a garage full of gas guzzlers. They want higher-mileage vehicles.”

Mr. Plunkett points to the Lexus 400h hybrid crossover, which consumers bought despite the fact that it could take years to get a return over a nonhybrid RX350.

The move could be part of an effort to adapt to consumers’ changing needs, and to keep them coming back to Ford. While only 50,000 new Explorers were sold last year, more than 100,000 Explorer owners traded in their vehicles, said Ford CEO Alan Mulally at Monday’s unveiling.

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