Auto Makers Are Changing Their Definition of SUVs
                    October 13, 2000

                    By JOSEPH B. WHITE and JEFFREY BALL
                    Staff Reporters of THE WALL STREET JOURNAL

                    Will the newly passed law promising tougher government scrutiny of
                    sport-utility-vehicle safety risks stall the high-profit SUV fad? That
                    depends on what your definition of SUV is, and the industry's definition
                    is changing fast.

                    Despite the bad press that sport-utility vehicles have had in the past
                    year, auto-industry executives say lots of consumers still want vehicles
                    that offer a combination of all-weather driving capability, ample cargo
                    room, high seating positions and aggressive styling. Sport-utility
                    vehicles outsold pickup trucks in the just-ended 1999 model year for
                    the first time, and are on track to become the No. 2 segment in the
                    industry, just behind midsize cars, according to a General Motors Corp.
                    sales analysis. GM predicts SUVs will be the best-selling class of vehicles
                    by 2005.

                    "If the consumer wants an SUV, they're going to buy an SUV," says
                    Matt Reynolds, director of vehicle compliance and safety affairs for
                    DaimlerChrysler AG's U.S. unit, which makes Jeep and Dodge brand
                    SUVs. Consumers don't appear to have been scared away from SUVs
                    by rollover-warning stickers that the government has long required
                    manufacturers to put on most SUVs, he says.

                    But industry executives also
                    acknowledge that even before the
                    crisis over Ford Motor Co.'s Explorer
                    rollover accidents linked to defective
                    Bridgestone/Firestone tires and the
                    new safety regulations the Firestone
                    debacle propelled into law, pressure
                    was on to tame the harsher
                    characteristics of 1990s SUVs.
                    (Firestone is the U.S. unit of Japan's
                    Bridgestone Corp.) With competition
                    in the SUV market intensifying, the Big Three face a fierce fight with
                    Asian and European manufacturers to reap the profits from a new
                    generation of SUVs that is fueling much of the segment's growth in the

                    Although sales of traditional SUVs remain strong, there are signs the
                    craze is reaching a peak. The likely resale values of some top-selling
                    SUVs, including the Explorer, recently got marked down by the
                    Automotive Lease Guide, which cites safety concerns and a glutted

                                      Sport Utility Evolution

                    Auto makers hope SUVs evolved from cars and minivans appease the
                    critics of current generation trucks.
2001 Ford Explorer 4-door 2002 Cadillac Escalade 2001 Ford Escape Acura MDX
Fuel economy (in mpg) 15 city, 19 hwy (V6) 4x4 12 city, 16 hwy (4x4) 18 city, 24 hwy (V6)(4x4) 17 city, 23 hwy
Weight 4045 lbs 5809 lbs 3133 lbs 4328 lbs
Ground Clearance 6.7 inches 10.7 inches 7.8 inches 8.0 inches
Seating capacity 5 5 to 8 5 7

                                --- TRADITIONAL ---
                                                       --- NEW BREED ---

                                2001 Ford
                                                       2001 Ford
                                                                  Acura MDX
                     (in mpg)
                                15 city, 19
                                            12 city, 16
                                                       18 city, 24
                                                                  17 city, 23
                                4,045 lbs.
                                            5,809 lbs.
                                                       3,133 lbs.
                                                                  4,328 lbs.
                                6.7 inches
                                                       7.8 inches
                                                                  8.0 inches
                                             5 to 8

                    Source: Companies

                    The combination of new safety pressure and changes in consumer
                    tastes could accelerate the move already under way in the SUV market,
                    where the hottest new models, such as Bayerische Motoren Werke AG's
                    X5, Toyota Motor Corp.'s Lexus RX 300 and the Ford Escape, are really
                    beefed-up passenger cars.

                    "There's a lot of blurring in the market between midsize cars, midsize
                    vans and midsize SUVs," says GM sales analyst Paul Ballew. "The utility
                    segment of the business is going through this maturation process."

                    Most current-generation SUVs, including the best-selling Explorer, are
                    modified four-wheel-drive pickups with five-passenger bodies bolted on
                    to stiff, rail frames. These vehicles made billions of dollars for Detroit's
                    Big Three auto makers, but they aren't likely to fare well in the
                    forthcoming government stability rankings.

                    The National Highway Traffic Safety Administration recently published
                    proposed rollover scores that would give the 1991-98 Ford Explorer
                    two stars out of a possible five. The mid-1990s Jeep Grand Cherokee
                    also would have gotten two stars as would have the Chevrolet Blazer.
                    Even the hulking Chevy Suburban, with a good overall safety record,
                    would have gotten just two.

                    Within two years, according to the legislation passed Wednesday by
                    Congress, the federal government must come up with a new
                    rollover-ranking system -- one based on an on-road test rather than a
                    mathematical formula. That is likely to be a contentious process, but the
                    goal is the same: to give consumers an easy scorecard for tippiness.

                    Whatever the method, in a market where auto makers boast about their
                    five-star front crash ratings, two stars won't look good. "This is
                    something that should give consumers pause, because consumers
                    often think they're buying a car" when they purchase an SUV, says
                    Adrian Lund, senior vice president for research at the Insurance
                    Institute for Highway Safety, a group funded by insurers. "If people
                    really do factor safety in, they're going to realize they may be getting
                    more safety in a comparable car or minivan" than in an SUV.

                    Auto-industry executives say SUVs are some of the safest vehicles on
                    the road in terms of overall crash-worthiness. But they aren't betting
                    their hugely profitable franchises that consumers will continue to ignore
                    SUV safety issues, or forgive SUVs for uncomfortable rides and stiff
                    handling. That is why Detroit's auto makers several years ago began
                    developing so-called hybrid SUVs, such as Ford's new Escape and GM's
                    new Pontiac Aztek.

                    Traditional SUVs will have to change to keep pace, industry officials say.

                    "We recognize that the sustained growth of SUVs depends on us
                    addressing perceived environmental and safety disadvantages," says
                    Richard Parry-Jones, Ford's group vice president for global product
                    development and quality.

                    That is why Ford and its rivals are investing heavily in technologies such
                    as stability control, which uses computers to sense when a vehicle is
                    beginning to spin out of control and applies the brakes or, in some
                    systems, cuts back the throttle, to bring it under control. These
                    systems have become widely available on luxury cars in the past few
                    years, where they cost $500 to $1,000 as an option. They are now
                    beginning to appear on SUVs.

                    But so far neither regulators nor auto makers have real-world data to
                    back up their claims that the systems indeed improve safety. That
                    hasn't stopped them from rolling them out aggressively on new models.
                    Mercedes-Benz, a unit of DaimlerChrysler, offers the system on its
                    M-Class SUVs and BMW has made it standard equipment on its X5.
                    Toyota is offering it as an option on the new Sequoia large SUV, due
                    out this fall. Ford has said it expects to offer the systems across its
                    truck lineup in the next few years. GM will offer a system on its new
                    Cadillac Escalade SUV.

                    Auto makers also are talking up technology to curtail SUV gas guzzling.
                    DaimlerChrysler's Chrysler Group said Thursday it is "prepared" to start
                    building a gasoline-electric powered version of its burly Dodge Durango
                    SUV that would get 18.6 miles to the gallon compared with 15.5 miles
                    per gallon for the conventional V-8 model. The company said, however,
                    that it would take enactment of a proposed $3,000 federal tax break to
                    make the gas-electric power plant cost-competitive. Ford has already
                    said it plans a gasoline-electric Escape by 2003.

                    The big question now is how big will the hybrid SUV market get, and
                    where will these new models take their sales -- from cars or older

                    "I don't see people moving away in droves from the Explorer and
                    Expedition," says Gurminder S. Bedi, Ford vice president in charge of
                    North American truck operations. "I see those continuing to evolve to
                    respond to issues of environment and safety. And I see a whole new
                    series of vehicles like the Escape."

                                          -- Gregory L. White contributed to this article.

                    Write to Joseph B. White at and Jeffrey Ball at