Even with a new model of the country’s best-selling vehicle, Ford Motor Co. (NYSE: F) is making some pretty tempting offers on its 2018 F-150 pickup. Is the company really that worried about its competition?
Could be. Ford is offering an F-150 STX SuperCrew XL with four-wheel drive and the 2.7L EcoBoost engine for $249 a month on a 24-month lease with a cash down payment or trade of $4,229.
For buyers, an F-150 XLT SuperCrew two-wheel drive with the same engine and an upgraded option package with a “total value” discount of $9,250 plus $750 in FordCredit Bonus Cash and $500 in Trade-in Assistance. That’s $10,500 off the manufacturer’s suggested retail price (MSRP) of around $46,225.
Both General Motors Co. (NYSE: GM) and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) will introduce all-new pickups for model year 2019. The Chevy Silverado/GMC Sierra is due out late this year, with a weight loss of 450 pounds and a new diesel engine, among other changes. The 2019 Ram pickup also loses some weight (225 pounds) and gets a little taller and a little longer. It is expected to be available in dealer showrooms around September.
Both the GM and Ram trucks are chasing the F-Series in the full-size pickup market, where automakers make their real money. The average 2017 price for a pickup sold in the United States last year was around $47,000, and margins on high-end pickups can rise to $10,000, compared with a margin of around $3,000 for a passenger car. Those high margins give manufacturers and dealers plenty of room to negotiate.
Ford is also facing more competition from Toyota Motor Corp.’s (NYSE: TM) 2018 Tundra full-size pickup and Nissan’s 2018 full-size Titan pickup. Toyota Tundra U.S. sales for January totaled 7,644, up 33.6% year over year. Nissan reported January Titan sales of 4,051 units, up 46.4% year over year. Ford’s year-over-year sales increase in January was a mere 1.6%, although from a much higher base of nearly 59,000 units sold in the United States.
These new pickups could chip away at Ford sales before the new trucks from GM and FCA even get to market. Ford needs to do what it can to prevent that from happening.