Wednesday, February 20, 2008

IL Insider: Roush on Track To Launch "Third Brand"

LIVONIA, Michigan — Inside Line has confirmed that Roush — the premier tuner of such Ford staples as the F-150 and Mustang, is set to launch what it calls a "third brand" for consumers in late 2008.

"The whole point is to continue the evolution of Roush," said John G. Clark, communications and motorsports manager for Roush Performance Products, the tuning arm of the company. "It potentially could include foreign brands."

When asked if that meant Toyota and Honda, Clark replied, "well, they are foreign brands, aren't they?"

Clark would not put a price tag on the development costs of what he calls the "third brand," nor would he say what it would be called. "It probably will be a totally different brand name," he said, "(that has) nothing to do with Roush." The tuner's business is currently separated into two brands: Roush Industries, which includes a manufacturing operation that makes parts for such products as the Dodge Caliber SRT4, and Roush Performance Products, which produces such vehicles as the P51 Mustang.

Clark said the third brand will initially begin providing "powertrain parts for cars and trucks." The need for an expansion beyond Roush's core Ford business may be seen as a critical business decision. Despite the fact that Roush Performance enjoyed a record year in 2007 — building more than 2,000 custom vehicles for 475 authorized Ford dealers — sales of its customized F-150 are "very slow for us right now," said Clark. Last year, Roush sold just 100 of its "Nitemare" trucks, a customized 445-horsepower F-150 Flareside priced at around $45,000. "When gas hit $3 a gallon, truck sales really stopped," he said. "The performance truck market has slowed."

"We understand in order to continue our sales trend, we need to look beyond Ford," Clark said.

The news of the third Roush brand was revealed during Inside Line's rare look on Monday inside the sprawling Roush operation here. Clark used the visit to put to rest rumors that Roush is busy at work customizing the new Dodge Challenger. Recently, some Web sites displayed pictures of the Challenger in a Roush parking lot. "As of right now, we have no plans to do (Chevrolet) Camaro, Challenger or (Chevrolet) Silverado, despite what is on the Internet," Clark said. "We built a Roush Silverado as an engineering exercise, but we do not plan to go into production (with it)."

Roush disclosed a number of intriguing business developments to Inside Line, from its first foray into the movie business to its continuing move into alternative-fuel vehicles. Also, the day marked an important milestone at Roush, as Jack Roush Jr., son of the founder, began his first full day at the company. Speaking to Inside Line, Jack Roush Jr. would not specify what his title is, but described his new role as something akin to "a fly on the wall." But clearly, the succession plan is in place.

The Roush Mustang will make its debut in the upcoming movie Run. Roush is also launching a Roush Propane F-150 designed for fleet use only. The Propane F-150 comes with either a 20-gallon or 60-gallon fuel tank. "The advantage is that propane is a cleaner fuel and it offers fleets a 50-cent-per-gallon tax credit," Clark noted. He said the truck uses Ford's 5.4-liter V8. The company is also developing a small fleet of electric vehicles and plans to extend its alt-fuel efforts to diesel trucks. Clark said Roush likely will develop components for diesel trucks, such as cold-air kits. "We have a lot of people asking for a lot of different things from us," he said.

In another development, Roush for the first time is delving deeply into its customer base to come up with marketing demographics. The typical customer is a male between the ages of 38 and 52 with an average income between $80,000 and $120,000. The average customer's Roush vehicle is "sort of a toy," Clark says, "not a daily driver." The few women who buy Roush products are "very popular amongst the men who don't own one," he says.

What this means to you: Mighty Roush gets ready to take a giant step outside of its core Ford business. — Anita Lienert, Correspondent

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