Sales of the F-Series were down 1 percent in February, but Ford executives say dealers should be fully stocked by the end of June as a second pickup assembly plant nears completion of its changeover to the 2015 model.
The F-150 is Ford’s profit driver, and as such, its sales are watched more closely than most vehicles. The automaker’s decision to scrap a steel body for a lighter aluminum one for this new generation of truck only increased the scrutiny. Wall Street wants to ensure it is not a costly mistake and a drag on the bottom line while the competition is monitoring the move as it weighs whether to follow suit in the future as a way to better meet fuel-economy regulations.
And everyone wants to see consumer reaction to the change.
F-Series sales fell in February from a year ago, while the competition increased. Ram sales were up 7 percent for the month, while General Motors saw sales of the Chevrolet Silverado increase by 24 percent and the GMC Sierrra 6 percent.
“Early customer demand is really exceptional,” said Mark LaNeve, Ford vice president, U.S. marketing, sales and service, noting sales were up 7 percent in February when fleet sales are taken out.
Only 21 percent of February F-150 sales were the new model, but they are only staying on dealer lots an average of eight days. The top trim levels, the King Ranch and Platinum, are being sold in 16 days and 12 days, respectively, LaNeve said.
Overall sales are down because inventories are still tight from lost production while the two assembly plants were down for retooling. Ford has had a limited number of trucks to sell for nine months, LaNeve said.
As a result, Ford has been restricting fleet sales and not going crazy on incentives to get rid of the outgoing 2014 models – an oft-used practice in the industry to clear out old stock for new models.
Ford retooled its Dearborn Truck Plant last year, and it is the sole source of new trucks right now. The second plant, in Kansas City, Mo., did the bulk of its retooling at the start of this year. LaNeve said Kansas City is now starting to build pre-production models as it trains employees to make the new aluminum-bodied truck.
Kansas City should start production this month, LaNeve said earlier this week.
Alec Gutierrez, senior market analyst for Kelley Blue Book, said it’s too early to conclude that Ford’s new F-150 is at risk of falling short of expectations.
“We are still a good 2-3 months out before we believe there is adequate inventory on the ground to accommodate consumer demand,” Gutierrez said.
However, Michelle Krebs, senior analyst for AutoTrader.com, took a more skeptical view of Ford’s F-Series sales and the time it is taking for the automaker to build up its pickup inventory.
“We need to watch what is happening at Ford. Yes, we gave them a pass last year. … they will continue get that pass for a while. But you also have to look across the rest of their lineup, because you see some weakness there, as well.”
Full-size pickups represented 12.6 percent of industry sales in February, up from 12.1 percent a year ago, said Erich Merkle, Ford U.S. sales analyst.
He said Ford’s average transaction price for the F-150 is up $2,000 from a year ago, and LaNeve said the automaker will continue to be disciplined in discounting the outgoing 2014 models as more 2015 models reach dealerships each month.
Ford, GM and Fiat Chrysler Automobiles’ Ram all have incentives in the $3,300 to $4,400 range. Ford was one of the lowest spenders in January, but GM cut its spending more than Ford did in February, making it the lowest spender.
“While we are tight now, we expect solid stock by the end of the second quarter,” LaNeve said. Fleet sales for the F-Series were down 18 percent in February, and customers know they must wait to place orders for the new truck. They know the timing and there will be no lost business as a result, he said.