Deep Discounts on 2015 Ford F-150 Pointing To Trouble?
It seems Ford may be in troubled waters with its new 2015 Ford F-150, as the automaker is now advertising more than $10,000 off its MSRP in some areas of the U.S. The discounts, designed to stimulate sales volume, are expected to help Ford regain ground lost to both Chevrolet and Ram over the last several months.
In fact, it is reported Ford’s pickup truck market share fell from 33 percent in June 2014 to 28 percent in June 2015, while month over month sales dropped 8.9 percent in June 2015. That’s serious ground in the U.S. truck market.
According to Automotive News, Ford.com advertises that buyers can get “up to $10,029 in total savings” on a 2015 F-150 XLT SuperCab 4x4 with the luxury chrome or sport package in some areas of the country.
Ford cited limited inventory of F-150s as part of the problem, caused by slow conversions of the two F-150 assembly plants and issues in delivery of the truck’s high-strength steel frames from the company’s Kentucky-based supplier. While those two reasons could easily explain an inventory problem, tacking big discounts on trucks sitting on dealer lots does not.
In its simplest form, the law of supply and demand would suggest F-150’s should be more expensive if supplies were so limited. The fact Ford is deducting as much as $10,000 off the F-150’s MSRP suggests the truck just isn’t selling well. Figuring out the reason behind that is another bucket of worms. Even still, the 2015 F-150 holds an average transaction price of $44,100 – the highest in the half-ton pickup truck segment.
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Why it matters
The introduction of the 2015 F-150 has brought many headaches to Ford, from renovating its manufacturing process and dealership body shops to deal with aluminum, to rolling out a new engine and a slew of new gadgets, including Ford’s 360-degree camera system.
For the last 33 years, Ford has held the top spot in truck sales, and now that record is under attack. Hopefully for Ford’s sake, it won’t have to continue cutting its profits by offering large discounts on trucks in order to move inventory.
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Source: Automotive News