The Ford Explorer, an American sport utility icon, has gone through a transformation.

Citing the demands of car buyers and a changing market, Ford (Stock Quote: F) has made a drastic change to the popular vehicle’s design, giving up the more rugged stance, off-road capabilities and towing capacity of an SUV in favor of better fuel efficiency and an updated look, analysts say.

“The market has clearly spoken: [SUVs] are no longer ‘in’ for the mainstream consumer,” says Bernard Swiecki, senior project manager at the Center for Automotive Research.

Most car experts define an SUV as a vehicle that’s built on a full truck frame. The new Explorer, however, falls into the realm of the CUV, or crossover utility vehicle. It’s built on a Ford Taurus platform, notes The Detroit Free Press.

Since it will no longer be built with the structure of a truck, the new Explorer will be lower to the ground and is expected to have better gas mileage and a smoother ride, Swiecki says. And while it won’t be quite as rugged as previous versions, it should be just fine for your average suburban driver, he adds.

But while older Explorer enthusiasts may scoff at the fact that the car is built on a sedan platform, it’s technically not considered a station wagon.

While a crossover may have the same general shape of a wagon, a wagon is really just a sedan with a bigger trunk and a hatch in the back, Swiecki explains.

SUVs generally have a higher ground clearance, higher stance and better road visibility than a sedan or wagon, and a CUV basically has the same look, profile and silhouette as a traditional SUV but sits lower, explains Mike Jackson, director of North American vehicle forecasts at IHS Automotive. And automakers seem to have been doing well with the happy medium of the CUV, which includes models like the Ford Escape, the Honda CR-V (Stock Quote: HMC) and the Toyota Rav-4 (Stock Quote: TM).

“If you look back at the glory days of the SUV, to the late ‘90s, early 2000s, nobody ever really used the off-roading and towing capabilities,” he explains. “Crossovers are increasingly the big hip thing in the mind of the consumer,” Swiecki says.

But Ford isn’t just following a style trend. It actually makes more financial sense for the company itself to move to a sedan platform. As car buyers opt for more fuel-efficient vehicles, economies of scale make production using a sedan platform more appealing, because a sedan platform can be used to make a sedan, crossover, hatchback and even a minivan.

Meanwhile, a truck frame gives rise to just a truck or an SUV, Jackson explains. And neither of those are gaining popularity again since gas prices reached as much as $4.59 in the summer of 2008.

Currently, the 2010 Explorer gets 14 miles per gallon in the city and 20 mpg on the highway. Ford hasn’t announced fuel economy ratings for the 2011 version, but fuel efficiency will be 30% higher in the 2011 version with Ford’s optional Ecoboost direct injection and turbocharging, the company says.

And the new Explorer is expected to be cheaper than this year’s version, with a sticker price of $28,190 for the 2011 version vs. $29,280 for the 2010 model, according to Ford’s website.

The new Explorer will also be one of the first of the company’s vehicles to feature its new inflatable rear safety belts, which MainStreet took an early look at during our coverage of New York International Auto Show in April.