Ford's Opportunity to Regain Market Share as the Bronco Returns
The introduction of new model year 2021 Bronco sport utility vehicle from Ford Motor Co. (NYSE: F) marks the return of a badge the company introduced in 1966 and retired in 1977. The 2021 models will even be built in the same plants in Warren, Michigan, that built the first five generations of Broncos.
Ford has even decided that it can dub those early models as the GOAT (greatest of all-time or “goes over any type of terrain”) and then use the term to identify so-called GOAT modes for some of the off-road options that will be available on the new vehicles.
The company might get some argument about who’s the GOAT from Fiat Chrysler Automobiles N.V. (NYSE: FCAU), which now builds the storied Jeep. Ford does deserve credit though for tossing the gauntlet.
First deliveries of the new SUVs are scheduled for late this year, and customers can put down a deposit right now of $100 to reserve one. The full-size Bronco comes in two- and (first-ever) four-door models, with a base price of $29,995 for the two-door version, just about $200 more than the base price of a Jeep. Four doors add $5,000 to the base price.
A compact Bronco Sport two-door variation is expected to have a base price of $28,155.
The new Bronco will go up against Jeep’s Wrangler. FCA recently showed off a new concept of that vehicle called the Rubicon 392 that includes a 6.4-liter Hemi V8 that spits out some 450 horsepower. The largest engine available for the new Bronco is a 2.7-liter EcoBoost V6 that gins up 310 horsepower.
The model year 2021 Wrangler is expected to get upgrades to its off-road capabilities, along with a front-facing camera (the Jeep Gladiator pickup already has this) and additional options for the transfer case.
FCA’s Wrangler sold more than 240,000 units in the United States in 2018, its best sales year in the past 15. However, sales have dived to just over 96,000 in the first half of this year, likely due to the COVID-19 pandemic. Total U.S. sales in 2019 came in just over 228,000.
While Wrangler sales last year averaged fewer than 20,000 a month (and will be lucky to reach half that this year), a new batch of Broncos could enlarge the market for these off-roaders specialists. At least FCA had better hope so, because Bronco is poised to steal some of Wrangler’s share.
Unfortunately for Ford, the competition is entrenched and the overall market size is likely too small to attack with a heavy marketing push. The company already has said it would not advertise the new Bronco on social media, including Facebook. Advertisers worldwide are pulling ads in an effort to get social media firms (especially Facebook) to assume more responsibility for the content that appears on their sites.
Ford stock traded up about 4.5% in the early afternoon Tuesday, at $6.34 in a 52-week range of $3.96 to $10.51. The stock’s consensus 12-month price target is $6.20.