The sky isn’t falling, and neither are transaction prices according to Ford Trucks PR man Mike Levine.
The new F-150 has faced its share of challenges coming to market. Ford has faced an uphill marketing battle to reassure customers of the strength of the truck’s aluminum body, but now claims the only issue it’s having is in keeping up with demand.
Sales are down by 2.4 percent year-to-date for the F-150, an issue that Ford blames on a shortage of inventory. A lack of frames and the conversion of two plants to build the new pickup have been holding the truck back according to the company, which expects to have dealers with full inventories by September. As a result, market share has also slipped at Ford, from 33 percent to 28 percent.
The latest struggle to emerge for Ford with the launch of its new F-150 is in the public relations department with news breaking that incentives of up to $10,000 are being offered on the new truck. But that’s not the whole story according to Levine.
That number is a combination of dealership and manufacturer incentives, he clarified to AutoGuide.com. Of that, the manufacturer’s incentive is $7,050 off a particular version of the 2015 F-150 XLT SuperCab 4X4 when equipped with the 2.7L EcoBoost engine and the Chrome or Sport Appearance Package. That model, says Levine, is an extreme example of incentive bundling, combining six different incentives, including opting to go with Ford Credit for financing.
And while those numbers might make it look like Ford is having trouble convincing buyers to pick up their new truck, the Blue Oval’s incentive spending is actually down for the month, with the average incentive on the F-150 currently sitting at $3,354. That’s well below the half-ton industry average of $4,214 and far below the $5,567 incentive spend by Ford’s “main competitor” according to Levine’s in-house figures.
So just what are Ford’s competitors spending on incentives?
Levine says they’re offering up-to $10,000. A quick click over to Chevy.com shows manufacturer incentives of up to $8,000 on the Silverado Crew Cab LT All Star 4WD, before any dealership extras.
Overall, transaction prices on the new F-150 are up says Levine. In fact, they’re the highest in the industry.
Ford reports that the F-150 is selling for an average of $44,100, the highest in the segment and an important metric for pickup trucks, which typically have large profit margins.
Chevy trucks PR manager Tom Wilkinson disputes that point, stating that his data shows the F-150 has an average transaction price of $41,425, though does admit it’s slightly ahead of the GMC Sierra with an average selling price of $40,558. The Chevy Silverado, he says, sells for an average of $36,087.
“Typically, you have your highest transaction prices right after launch,” says Wilkinson, as new models are usually gobbled up by rabid fans who are not that concerned with price.
“The stories yesterday raise the question of what happens as the launch proceeds, the old trucks sell out, and Ford has to sell F-150s to more price-sensitive customers,” says Wilkinson. “So far, we haven’t seen anything about the new F-150 that average customers might pay a premium for.”
Discuss this story at our Ford forum