FORD PHILIPPINES President and Managing Director PK Umashankar succinctly described the all-new Territory SUV it launched last Friday as one that “delivers on space, size, technology, and powertrain.”
But when viewing from a strategic perspective, the introduction of the Territory (particularly at its size and price point), you could almost see how Ford is nicely filling in the price gaps of its portfolio. The new SUV clearly slots in between the EcoSport and Everest.
Compared to the EcoSport, the Territory is taller, longer, wider, and with a longer wheelbase as well, but it’s still considered a smaller SUV. Now don’t get lost in the jargon: The EcoSport is a mini SUV, while the Territory is considered as covering the niche between “mini” and “small.” More on that later.
I asked Mr. Umashankar during our Zoom session as to how Ford distinguishes one from the other at least from a marketing standpoint. He said that the EcoSport is “targeted toward youngsters who are stepping into the utility space that wasn’t there before. Actually… we created that space.” He should know as well as anybody since the executive was once involved in the regional launch of the EcoSport.
“The Territory is taking it one level higher. It gets into the operating space of a small utility… delivering (the) right space, a wider track, ample shoulder room, better powertrain capabilities, a higher platform, more driver-assist technologies engineered in the vehicle at a base level. By pedigree it’s a class above.”
Obviously, Mr. Umashankar is keenly looking at how the segments of the EcoSport, and additionally the Territory, are faring in this new normal. “Each product occupies its own space in the marketplace,” he explained. “The mini utility segment today in the Philippines is much bigger than the small utility segment.”
He revealed that mini utility vehicles “(account for) about eight to nine percent of the total automotive market because of the price band where it operates — below P1 million all the way to P1.1 million-P1.2 million.”
If you didn’t hear about it yet, Ford had basically nixed sedans in many markets (although we still have the Mustang, of course) in favor of SUVs and pickups. Speaking of pickups, Ford Philippines has an industry-leading 15 models in the Philippines.
As for the EcoSport and Territory: “It’s an appropriate price band (which) overlaps the sedan space. Consumers might want to switch to a different body style (i.e., an SUV) for practicality, higher ground clearance, ability on rough terrain,” stated the executive, and added that SUVs have proven to be a better draw for millennials anyway.
More mature or developed SUV markets, Mr. Umashankar posited, have overlapping points between mini, small, and large utility vehicles. “In a market like the Philippines with our size, you do not see that. You have very disparate set of elements. (There’s a) wide gap between mini and small.”
Again, the Territory is envisioned to “fill the value between the mini and small so that you come in and offer a proposition to the mini utility customers who are not comfortable with the compactness and not so practical nature of it, and want to jump to something real and give all of that.”
The affordable price positioning in the Territory should also “attract small utility customers who do have as much technology today that they would want, but they are paying a huge premium for what they have.”
The game plan, shared the Ford executive, is to “attack from both sides,” operating between the mini and small segments.
Consider that ours is the first, well, territory in the 100-strong International Markets Group (IMG) of Ford Motor Co. to get the Territory. Ford Philippines AVP for Communications Edward Joseph Francisco explained that the IMG is comprised of “a mix of growth and emerging markets” such as Thailand and Vietnam in the ASEAN region, plus “the company’s operations in Africa, ASEAN, Australia, India, Mexico, Middle East, New Zealand and South Korea.”
Clearly, Ford likes what it sees in the Philippines. And that doesn’t end with the Territory, of course. “Yes, the search is always on — the pursuit of getting more products is always on and we continue to look at more options to bring into the market,” concluded Mr. Umashankar.