CR-V Passes the Once-Dominant Explorer

[Z-06]

Wall Street Journal -- Ford vs. Honda

Ford, Honda Cross Paths

On Sales of SUVs

CR-V Passes the Once-Dominant Explorer

July 23, 2007

Deb Nison is a data warehouse developer in Portland, Ore., who likes to go snowboarding on nearby Mt. Hood. Once upon a time, she drove a Chevy TrailBlazer, and later a Subaru Forester. Today, she owns a 2007 Honda CR-V.

"I like the way it handles," she says. She appreciates feeling "ridiculously safe" in a vehicle with standard head protecting airbags. And for an SUV, she says, it gets "decent mileage" -- about 23 miles per gallon so far around town.

Ms. Nison is just one reason why the Honda CR-V is, as of June 30, America's best-selling sport-utility vehicle. The CR-V's rise, and the parallel collapse in demand for "real" SUVs like the TrailBlazer and the one-time King of SUVs, the Ford Explorer, reveal a lot about why the American auto industry is in the shape it's in right now.

Just 10 years ago -- a mere two product generations in auto industry terms -- America was SUV Nation. SUV meant a tough looking box perched on a heavy steel ladder frame borrowed from a pickup truck. No vehicle did a better job capturing the appeal of this formula than the Ford Explorer.

In 1997, Ford Motor Co. sold more than 383,000 Explorers. Three years later, Ford sold more than 445,000 Explorers. It's not a coincidence that Ford earned record profits during this period. The Explorer was a perfect automotive money-making machine: A high volume model that sold at premium prices. If Henry Ford or Alfred P. Sloan, the architect of General Motors Corp.'s rise to power, had been alive in 1997, they would have understood the Explorer's business model immediately -- and approved.

Of course, it helped -- a lot -- that the late 1990s were an era of ultra cheap gas. Today's V-6-powered Explorer is rated at 15 miles per gallon in the city, and 20 mpg highway. Not bad for a truck that weighs more than 4,600 pounds, perhaps, but not good in any absolute way. But at $1 or so a gallon during the heady days of the dot-com boom, a lot of American families could afford to take a "What Me Worry?" attitude toward gasoline prices. The Explorer's combination of a tall-in-the-saddle ride, "go anywhere" four-wheel-drive capability and rugged looks became a suburban status symbol.

But even as the Explorer was enjoying its peak years, Honda Motor Co. began offering something new. The Honda CR-V, launched in 1997, looked like an SUV that had taken a wrong turn on to the set of "Honey, I Shrunk the Kids." It had the boxy profile of an SUV, and the rear cargo space, and all wheel drive. But it was more than 1,000 pounds lighter than an Explorer, and smaller in every dimension. Underneath, the CR-V was built like a compact, front-wheel drive Honda Civic. There was no heavy duty ladder frame, which among other things meant it couldn't tow very much.

The industry struggled with what to call vehicles like the CR-V -- cute utes, car-truck hybrids -- before settling on "crossover."

In the late 1990s, the CR-V sold modestly compared to the mighty Explorer. In 1997, Honda sold just shy of 67,000. By 2000, sales had risen to just over 118,000. In other words, barely half of one Explorer assembly plant's annual production.

Ford's Explorer has seen sales slide as Honda's CR-V crossover has become the top seller for the segment.

The Explorer, and the even larger SUVs such as the Hummer H2 that built on its success, were the T-Rexes of the American road. The Honda CR-V was the furtive mammal, scurrying to stay out of harm's way.

Did somebody say, asteroid?

When it comes to the auto industry, dinosaur metaphors are irresistible. The Great SUV Die-off of the last three to four years is the most dramatic example of how vulnerable the auto industry and its long product design cycles are to short-term shocks since the oil embargoes of the 1970s.

From the peak of more than 445,000 Explorers sold in 2000, Explorer sales have fallen by nearly 60% through the end of 2006. By the end of 2007, Ford may be lucky to sell much more than 150,000 Explorers -- the capacity of just one shift of production at one assembly plant. GM's rival mid-size, traditional SUVs are in the same downward spiral. Within a few years, it's probable that neither Ford nor GM will even sell a body-on-frame mid-sized SUV.

There's more to this than just $3 a gallon gasoline. Consider how the CR-V has redefined success. It's the best-selling SUV in America, but through the first half of this year, Honda has sold only about 104,000. By the end of the year, CR-V sales might top 200,000, but probably not by much. In other words, No. 1 in the SUV segment today means selling fewer than half as many vehicles as Ford did when the Explorer was No. 1 a decade ago.

That market fragmentation is one reason why Detroit auto makers, including Ford, are having such trouble. It's harder and harder to sell a full assembly plant's worth of one type of vehicle just in the U.S. Honda's strategy for realizing economies of scale with the CR-V doesn't depend on that. The company sells the CR-V around the world, builds it using some of the engineering and manufacturing tools used for the higher volume Honda Civic.

Beyond that, the CR-V represents a better solution to the challenge from customers such as Ms. Nison. As is often the case when Japanese auto makers attack a segment invented by Detroit, it has taken Honda three generations to really get it right. The first generation CR-V was too small for many. The second generation model was too drab -- by Honda's own admission. Generation III, launched in 2007, combines an efficient interior package, five-star front and side crash-test ratings, AND styling that is sportier on the outside, and clever and uncluttered on the inside.

One other wise choice Honda made was to keep the CR-V a four-cylinder model, with highway fuel economy rated at 30 mpg for two-wheel-drive models, 28 for the all-wheel drive.

On the road, the CR-V is quiet, and at just over 3,500 pounds, it is less ponderous and easier to maneuver than a standard SUV. It also does better on the government rollover test, scoring four stars to an Explorer's three.

What's the lesson for Detroit? The Detroit auto makers already know. . The demise of the Explorer doesn't mean Americans don't want to drive vehicles with all wheel drive, lots of cargo space and a tall driver's seating position. A large segment of the car buying public wants all that -- just with better handling, more safety technology and better fuel economy. That's why even as the Explorer fades away, Ford (and GM and Chrysler) are rushing out more vehicles to compete with the CR-V and its larger brother, the Honda Pilot, and enjoying success. Ford's total "crossover" sales are up 83% in June, even as overall Ford sales fell 8%. An internal Ford tally finds that Ford -- including its European luxury brands -- is now the leading seller of crossover vehicles in the U.S., with GM close behind.

Ford, in fact, has a shot at wrestling back the No. 1 SUV in America title from the CR-V if it can continue to boost demand for its recently redesigned Escape (See related article).

• Send comments about Eyes on the Road to [email protected].

Edited July 23, 2007 by smallchevy

[regfootball]

i already spewed about this on GMI.

since when is 23 mpg good? My wife got 24 in the aztek, in town driving, on a tank recently.

23 for a four cylinder is pathetic. not worth the loss of hp and highway smoothness from the v6.

a rav4 v6 will likely return as much fuel economy.

nissan rogue will eat sales away at this thing anyways.

Edited July 24, 2007 by regfootball

[siegen]

i already spewed about this on GMI.

since when is 23 mpg good? My wife got 24 in the aztek, in town driving, on a tank recently.

23 for a four cylinder is pathetic. not worth the loss of hp and highway smoothness from the v6.

The Aztek also happens to be about as slow as the CR-V, despite the V6. fueleconomy.gov shows that the CR-V averages about 1-2mpg better than the Aztek. For an SUV, 23mpg is good in the city, regardless of powerplant. The gearing and lightweight of the CR-V makes up for the smaller engine size. Of course it can't tow anything.

[grandmarquis]

The Aztek also happens to be about as slow as the CR-V, despite the V6. fueleconomy.gov shows that the CR-V averages about 1-2mpg better than the Aztek. For an SUV, 23mpg is good in the city, regardless of powerplant. The gearing and lightweight of the CR-V makes up for the smaller engine size. Of course it can't tow anything.

I might add that the new CRV comes awful close to matching the Aztek's ugliness.... Edited July 26, 2007 by grandmarquis

[CARBIZ]

All this amazing milestone proves is that someone should bring back the Pacer or the station wagon. Most of these women would be right at home in a '72 Colony Park. The CR-V is an over-priced station wagon.

[Robert Hall]

All this amazing milestone proves is that someone should bring back the Pacer or the station wagon. Most of these women would be right at home in a '72 Colony Park. The CR-V is an over-priced station wagon.

SUVs/crossovers are the station wagons of today... and many of them are heavier than the wagons of the '70s. SUVs and crossovers are basically just a repackaging of the old station wagon concept but with taller bodies and more ground clearance.

[Drew Dowdell]

SUVs/crossovers are the station wagons of today... and many of them are heavier than the wagons of the '70s. SUVs and crossovers are basically just a repackaging of the old station wagon concept but with taller bodies and more ground clearance.

[CARBIZ]

I had the misfortune of having to watch those cars be built It was part of my driver's ed course. We had a tour of the AMC plant in Brampton. I enjoyed the crash victim's film more!

[regfootball]

AMC, the granddaddy of all crossovers?

[CARBIZ]

As ugly as those late AMCs were, they were ahead of their time. AMC anticipated the SUV craze, but were about 10 years too early!!

[gm4life]

Seriously I liked the old CR-V especially the 2003-2006 the new one is so ugly. The Aztek is much better looking with the Rally Package. Give me a Torrent.

[Robert Hall]

As ugly as those late AMCs were, they were ahead of their time. AMC anticipated the SUV craze, but were about 10 years too early!!

Yes, the Eagle is the predecessor of such cars as the Subaru Outback and Volvo XC70... I thought it was neat that they had several bodystyles also--wagon, sedan, coupe, a couple different 2dr hatchbacks.

[GXT]

i already spewed about this on GMI.

since when is 23 mpg good? My wife got 24 in the aztek, in town driving, on a tank recently.

23 for a four cylinder is pathetic. not worth the loss of hp and highway smoothness from the v6.

a rav4 v6 will likely return as much fuel economy.

nissan rogue will eat sales away at this thing anyways.

My mother's brother's uncle got 1/2 MPG in the aztek, so the CR-V is way better.

As far as more standardized testing goes (from CR):

Aztek

0-60: 11.3

City MPG: 12

Highway MPG: 24

150 Mile Trip: 20

CR-V:

0-60: 10.6

City MPG: 15

Highway MPG: 29

150 Mile Trip: 25

Faster 0-60 and better fuel economy. The CR-V doesn't look so pathetic to me. But yes, the RAV4 V6 puts up pretty much identical fuel economy numbers to the CR-V while offering a 0-60 of 6.7. You are correct that that new V6 from Toyota is amazing.

[AxelTheRed]

23 mpg from a Honda? Say it ain't so!

[Ravenfreak13]

Yeah...well I rode in a new base C-RV last night...hmmm its nice that honda put padded fabric on the arm rest...too bad the fabric was itchy and irritating on my arm. The radio SUCKS...the sound is so empty. My saturn's stereo sounds more rich then that. Plus the horrible screen. Engine noise was low but road and wind noise were shockingly high. The ride was simalar to the breeze...which is quite depressing. I'm glad we bought a sebring. Truthfully I'll take a throaty more powerful engined car then a quiet engined road/wind noise mess that is the C-RV. People must be high or brainwashed when buying these.

It is so sad that people could associate honda with quality.

[The O.C.]

i already spewed about this on GMI.

since when is 23 mpg good? My wife got 24 in the aztek, in town driving, on a tank recently.

23 for a four cylinder is pathetic. not worth the loss of hp and highway smoothness from the v6.

a rav4 v6 will likely return as much fuel economy.

nissan rogue will eat sales away at this thing anyways.

This 4-cyl CR-V will also I believe outrun your Aztek....while getting similar gas mileage.

(C&D road tests show the CR-V at something like 9.5-9.9 secs from 0-60. Aztek road tests have all been over 10-secs from what I remember.) And I'd argue the Honda L4 is most likely as smooth as, if not smoother, than the old grumbly pushrod V6 that was in the Aztek.

[Farkas]

23 MPG from a 4-Cylinder is not that spectacular, I filled up our Sable wagon this evening and estimated that I got just over 23 MPG. With a V6.

Curb Weights

3532 - 2007 Honda CR-V

3536 - 1997 Mercury Sable Wagon

They weigh almost the same amount, yet our old and American wagon gets the same mileage with a bigger engine. To borrow Toyota's slogan, that's moving forward alright.

[regfootball]

but the crv cannot haul plywood or a couch. and you can't yank the seats out. i.e. the crv only has about half the functional cargo space and a lot less passenger space. the aztek is smoother and quieter at highway speeds (75-80+). IOW, the crv is just a cute in town grocery getter that really doesn't have value as part of its equation. if you wanna pick up a broom from home depot or some picture frame at the antique mall, or shuttle your little yippee dog around, then the crv is your bag.

like i said, once word about the nissan rogue gets out, the crv is dead. unless there is a continuous new stream of lesbian population.

Edited August 7, 2007 by regfootball

[siegen]

the aztek is smoother and quieter at highway speeds (75-80+).

And you have test data to prove this?

once word about the nissan rogue gets out, the crv is dead.

So then the Rogue will be the best-selling SUV in America?

[Camino LS6]

The original premise here seems completely absurd to me.

If the Explorer and CRV are considered to be the same type of vehicle in any way, then the term SUV is officially pointless.

They are universes apart.

[regfootball]

the crv is a tall hatchback.

think, backpack with wheels.

[regfootball]

So then the Rogue will be the best-selling SUV in America?

let's put it this way. rogue vs. crv.....at least one of the two will be able to get out of its own way. and it won't be the one with vtec.

isn't the rav 4 faSTER? i think the 4 in rav4 stands for "FOUR SECONDS FASTER THAN THE CRawling along at walking speeds -V ehicle."

at least the front end of the nissan won't scare small children. when vue sales take off and the rogue comes out, we won't be seeing the crawling recreational vehicle at the top of the charts.

http://www.caranddriver.com/reviews/3274/p...c-aztek-gt.html

We were impressed by the Aztek's tight, rattle-free structure and quiet interior. At idle, we measured only 40 dBA -- 5 dBA less than in a Lexus RX300. Cruising at 70 mph with the optional roof-mounted bike rack generating plenty of wind noise still only ramped our sound-level meter to 70 dBA. The RX300, which does not have a noise-creating bike rack, registered 67 dBA during the same test. And at wide-open throttle, the more expensive Lexus and the Pontiac are very close: 72 for the RX300, 74 for the Aztek.

THE VERDICT

Highs: Useful accessories, quiet interior, a good balance between maneuverability and cargo room.

the only noise figures i found for any cr-v was on insightcentral.net and it was higher.

curious is how an aztek which you can actually use to haul cargo and people, not just schnauzers, birth control pills, and shoplifted 'coach' bags, is only about 400 more pounds than the tiny cr-v. i would guess the sister rendezvoux is even quieter yet.

Edited August 7, 2007 by regfootball

[bowtie_dude]

Why can't I get a small SUV with a V6 and a manual? Well, that isn't a friggin Santa Fe.