CHICAGO – While shooting power to all four wheels may be growing in popularity, Motor Co. doesn’t see development cost falling anytime soon. And that means consumers will continue to pay a premium price.
Even with the surge of all-wheel drive in the U.S. market, the cost of the technology likely will keep pace with today’s cost,’s product guru tells Ward’s on the sidelines of the Chicago Auto Show here.
“All-wheel drive is not as sensitive to economies of scale because it’s basically a manufacturing-driven, gear-driving process. It’s not a technology like a battery for a hybrid, which scale affects immensely,” Phil Martens, group vice president-product creation, says. “I think AWD systems (will not see) a dramatic reduction in price.”
Ford currently tacks a premium of $1,700 for AWD on its new Freestyle cross/utility vehicle, Five Hundred and Mercury Montego sedans. All went on sale late last year with AWD as an option.
More than half of Freestyle buyers take the $1,800 AWD option.
The auto maker says AWD take rates on the trio – 23% for Five Hundred, 55% for Freestyle and 34% for Montego – exceed initial expectations. Unlike some of its competitors in similar segments, Ford offers the option as a standalone feature on all trim levels, including the base model.
Martens says Ford is engineering AWD into all of its future car and CUV programs. The company plans to sell 500,000 vehicles with AWD annually by 2007, 400,000 of which will be passenger cars and 100,000 SUVs, a spokesman says. (See related story: Ford Aims for All-Wheel-Drive Leadership)
Although Ford relies heavily on a Haldex AWD system for its current lineup, there is no concrete plan to continue purchasing Haldex Group’s system for the next round of cars slated to get AWD.
These include the all-new Ford Fusion, Mercury Milan and Lincoln Zephyr ’06 sedans to be built off the midsize CD3 platform in Hermosillo, Mexico, starting this fall.
Ford adds AWD to the mix for ’07, but Martens does not confirm Haldex will supply the system. “The Haldex is just a particular source,” he says. “It may not be the same source (for the CD3 cars). But it will “be the same type of set up.”
The location of Haldex, based in Sweden, may be a particular hurdle for Ford as it furthers its AWD penetration in the domestic lineup. Martens confirms the auto maker currently is constrained in meeting the demand for the option due to the strong take rate among buyers.