Ford Offering $10000 Discount on New Aluminum F-150 Pickup – Bloomberg

Posted: Thursday, July 16, 2015

Ford Motor Co. has begun offering discounts that can exceed $10,000 on its new aluminum-bodied F-150 pickup, which has been losing sales and market share this year as the automaker works to build inventory on dealer lots.

The company’s website offers “up to $10,029 in total savings” on a 2015 F-150 XLT SuperCab 4X4 with the luxury chrome or sport package in some U.S. regions. That model comes with a discount of $7,050 in other areas, according to Ford.com.

U.S. sales slid 8.9 percent last month for Ford’s F-Series pickups, its top-selling line and most profitable vehicles. The truck’s share of the big-pickup market fell to 28 percent in June from 33 percent a year earlier, according to researcher Autodata Corp. Ford blamed tight inventory caused by the conversion of two plants to build the trucks, the first mass-market vehicles to use lightweight aluminum so extensively.

“The truck hasn’t sold up to expectations for the most part,” Akshay Anand, an analyst at auto researcher Kelley Blue Book, said in an e-mail. “This may be a hint that in certain parts of the country, the issue might just be more than supply.”

Improving inventory of F-150 is allowing Ford to offer more competitive incentives as part of its Summer Sales Event promotion, Erich Merkle, the company’s sales analyst, said Wednesday. He said overall incentive spending is down from a year ago and that the truck is selling for $44,100 on average, the highest transaction price in the segment.

Plenty Profit

“What will be more telling is whether the incentives start to go out nationwide,” Kelley Blue Book’s Anand said. “If limited to higher end trims and packages, this may not have a huge effect for the moment, as a truck still makes plenty of profit.”

Ford cut spending on marketing promotions per vehicle 16 percent in this year’s first half to an average $2,736, according to Autodata, which found smaller increases by General Motors Co. to $3,427 and Fiat Chrysler Automobiles NV to $3,277.

Ford has said it had only half its normal inventory of the F-150 on dealer lots in June and won’t have a full supply until the end of September.

F-Series sales fell 2.4 percent in the first half and have dented Ford’s earnings. The trucks were the top-selling vehicle line in the U.S. for the 33rd straight year in 2014. The new F-150’s fuel economy increased as much as 29 percent, primarily because the use of aluminum trimmed the truck’s weight by about 700 pounds (318 kilograms).

Dealer Ads

Asked July 1 about dealer ads touting $10,000 discounts on F-150, Ford’s top U.S. sales executive said those incentives were being offered by individual dealers.

“I can tell you that that number of $10,000 is commonly used by our competition,” said Mark LaNeve, vice president of U.S. marketing, sales and service. “So you’ve probably seen a competitive response by a given individual dealer.”

Sales of GM’s Chevrolet Silverado truck jumped 18 percent last month, as its share of the full-size pickup market grew two points to 25.9 percent. Sales rose 0.6 percent for Fiat Chrysler’s Ram pickup and gained 4.3 percent in the first half.

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