A story two days ago that Ford is offering discounts of more than $10,000 in some regions on its new aluminum-bodied F-150 pickup “to reverse a sales slump while it works to build inventory on dealer lots” has stirred up a lot of interest — including some “move along, there’s nothing to see here but marketing at work” reactions.
Bloomberg’s Keith Naughton reported Wednesday evening that the Ford “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.”
Kelley Blue Book analyst Akshay Anand told Naughton in an e-mail that “the truck hasn’t sold up to expectations for the most part. This may be a hint that in certain parts of the country, the issue might just be more than supply.”
“The discounting is unusual because the highly revised 2015 F-150 is relatively new in the market,” writesUSA Today’s Chris Woodyard in an article that was also published in the Motor City’s Detroit Free-Press and on CNBC.com.
Pointing out that new aluminum body weighs less and thus saves on fuel costs, Woodyard writes: “Not only is the F-150 the nation's best-selling vehicle, but it is also considered one of the most profitable, at least compared to cars.”
Ford spokesman Mike Levine downplayed the discounts, however, saying “the $7,050 price cut, for instance, isn't a lump sum, but a number of discounts bundled together,” Woodyard writes. “Incentives and rebates are a normal part of our business,” Levine tells him. "Some incentives encourage customers to purchase better equipped trucks while others reward our customers for their loyalty or financing through Ford Credit."
Indeed, Eric Lyman, VP of Industry Insights at TrueCar, points out that pick-up buyers are accustomed to seeing incentives, and manufacturers often use ads to get them through the dealers’ doors, according to Fox News’ Matthew Rocco.
“By offering discounts on a hard-to-find, pricier model, Ford can boost showroom traffic with minimal risk to profit margins,” Rocco writes.
It’s all in a day’s sales tactics, in other words.
“I think that while this particular level of incentive is very surprising given all the other metrics, this looks like more of a marketing effort,” Lyman tells Rocco.
Similarly, Kelley Blue Book’s Anand tells the Detroit News’ Michael Martinez in a follow-up story yesterday: “I don’t know if [the incentives are] a huge deal. In some cases they’re isolated instances…. It seems like it may be a marketing thing more than anything.”
Martinez goes on to report that “demand appears to be strong” for the trucks, “which are sitting on dealer lots for an average of 32 days and are selling twice as fast as other vehicles in the segment. Average transaction prices are $44,100, the highest in the half-ton pickup segment and a record for Ford.”
But as do others, he points out that the F-150 is not without its problems, including ramping up two plants to build the aluminum-intensive vehicles. Sales slumped 8.9% in June because of tight inventory, Ford said.
“After pick-up brands such as Chevy and Dodge saw sales increases in June — as much as 18.4% for Chevy, and 0.6% for Dodge — Ford is reportedly looking to maintain the title of ‘best-selling pick-up in America,’” writes Ryan Daly for Fortune.
“One potential cause for the drop in Ford’s sales figures, according to Automotive News, is the fact that the automaker ‘is experiencing some frame supplier issues, it’s likely to take some time for the truck maker to build up a proper supply of the more popular features and packages.’”
The AP’s Ann M. Job gives the new F-Series a positive write-up in a widely published review Wednesday. The “handsomely styled” revamp “shows how far pickups have come from their rough-riding and utilitarian past,” she says. “The F-Series is more capable than ever of towing and hauling heavy loads, but it's also more refined, smart and high-tech.”
She also reports that although some loyalists worry the new body “might be tinny and not as robust as the traditional steel ones,” Ford insists it is “military grade.” Now that may or may not be marketing speak, as this Reddit thread explored. In any event, as both Ford and Reddit can testify, you’ve got to have a thick skin to survive in today’s social media environment.