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Ford offering $10,000 in incentives for new F-150

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Not two months ago, Ford posted lower-than-expected first quarter earnings partly because of production issues with the new F-150, but raised the year's profit outlook thinking the production issues were over. A month later we got word of more manufacturing problems due to a shortage of frames, leaving the company unable to fulfill demand. The problems not only ate into Ford's bottom line, but also its market share, since the F-Series truck has been the best-selling vehicle for the past 33 years.

Inventory still isn't where Ford wants it, and won't be until the end of September. The pipeline is stocked enough, however, that Bloomberg reports The Blue Oval is putting up to $10,029 on the hood in some parts of the country, and only on certain trims, as a way to stay competitive with rival truck makers. Ford lost 100,000 units of production during the changeover of the two plants that build it. The frame shortage compounds that, which has led to F-150 sales that are down 2.4 percent through the first half of the year. F-150 market share in June 2014 was 33 percent, this June it was 28 percent.

Meanwhile, sales over at General Motors and Ram are climbing - Chevrolet Silverado sales were up 18 percent year-on-year in June. Ford said its incentive spending on the F-150 is down overall this year, and its average transaction price of $44,100 remains the highest in the segment. Still, it will look forward to solid footing to take on rivals.

 

http://www.autoblog.com/2015/07/16/ford-offering-10000-incentives-f150/

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Their incentives SHOULD be the lowest in the segment, it's a brand new truck. When the GM trucks were new for '14, they also had the lowest incentives. This has all been a very unfortunate turn of events for the new F150.

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In other words, what many of us were saying (and being hounded for in some circles) for ages. Vindication is sweet. I imagine that TAF is dancing in the street somewhere.

Now, the big questions, namely: how did this happen, and can it be fixed?

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I expect FORD to raise discounts to keep their sales crown for the whole year but it will hurt. Wish they would just reduce the actual costs and stop all the BS of discounts.

 

If they can afford to give up 10K, then drop the average transaction price to 34,100 and call it a solid day of sales of a solid truck. Then it would force others to drop their prices and we get back to reality of selling prices.

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So despite the build shortage that Ford is feeding everyone, they actually have enough inventory in pipeline and are throwing large amounts of cash to move them on top of that. Seems like a lot of Ford fans are eating a little bit of crow right now, given their denial, over the last few months, about the level of incentives that Ford was and is still offering on the 2015 F-150s. All this means is that Ford is doing the same thing as everyone else and isn't doing anything special when compared to the competition. 

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In other words, what many of us were saying (and being hounded for in some circles) for ages. Vindication is sweet. I imagine that TAF is dancing in the street somewhere.

Now, the big questions, namely: how did this happen, and can it be fixed?

 I am yes

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Dat transaction price tho. 
 

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.


That's pretty compelling and a likely sweet spot. People who can afford only a midrange'y XLT have enough of an incentive to reach for a more optioned model. Those who want a Lariat right now may be persuaded to downgrade in exchange for the significant price reduction. 

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Dat transaction price tho. 

 

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.

That's pretty compelling and a likely sweet spot. People who can afford only a midrange'y XLT have enough of an incentive to reach for a more optioned model. Those who want a Lariat right now may be persuaded to downgrade in exchange for the significant price reduction. 

Weird, When I clicked that link it "only" showed "get up to $7,050 in total savings".  It must be a regional thing..and living in the midwest there is probably higher demand here for trucks than elsewhere.

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Dat transaction price tho. 

 

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.

That's pretty compelling and a likely sweet spot. People who can afford only a midrange'y XLT have enough of an incentive to reach for a more optioned model. Those who want a Lariat right now may be persuaded to downgrade in exchange for the significant price reduction. 

Weird, When I clicked that link it "only" showed "get up to $7,050 in total savings".  It must be a regional thing..and living in the midwest there is probably higher demand here for trucks than elsewhere.

 

It did only say in parts of the country. The midwest always demands pick ups so naturally those incentives wont be as high.

Edited by surreal1272
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I expect FORD to raise discounts to keep their sales crown for the whole year but it will hurt. Wish they would just reduce the actual costs and stop all the BS of discounts.

 

If they can afford to give up 10K, then drop the average transaction price to 34,100 and call it a solid day of sales of a solid truck. Then it would force others to drop their prices and we get back to reality of selling prices.

Thing is, they're probably not able to get too aggressive with the price slashing. The overhead on that truck is enormous, and under normal circumstances it is easily their biggest moneymaker.

Besides the obvious help they are in moving product out the showroom door, for most customers incentives are like haggling minus the haggling. Everyone KNOWS that they're supposed to negotiate the price on a vehicle, but find it distasteful. Incentives function as a way to bypass the angst and arrive at a price that everyone can be, if not happy, at least satisfied with.

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I expect FORD to raise discounts to keep their sales crown for the whole year but it will hurt. Wish they would just reduce the actual costs and stop all the BS of discounts.

 

If they can afford to give up 10K, then drop the average transaction price to 34,100 and call it a solid day of sales of a solid truck. Then it would force others to drop their prices and we get back to reality of selling prices.

Thing is, they're probably not able to get too aggressive with the price slashing. The overhead on that truck is enormous, and under normal circumstances it is easily their biggest moneymaker.

Besides the obvious help they are in moving product out the showroom door, for most customers incentives are like haggling minus the haggling. Everyone KNOWS that they're supposed to negotiate the price on a vehicle, but find it distasteful. Incentives function as a way to bypass the angst and arrive at a price that everyone can be, if not happy, at least satisfied with.

 

I understand what you're saying and a lot of people are almost scared to even try and negotiate a price.. with that said, and the incentives being how they are.. why even negotiate prices? Why not set bottom line prices, no negotiating, the price is the same for every single Silverado 1500 LTZ and the price is the same for every F150 Lariat. The way you build one online picking and choosing all of the options you want would just be the way. Pick your Lariat, a few other little things here and there and BOOM. There's the price, buy it or leave it. BUT I'm also not talking about these 65k half ton trucks. I mean like dfelt said where you get rid of the stupid incentive so that 65k truck is more like 55k(and scaled down for the lesser models).

 

I know there has to be a reason for the system to be the way it is but it kind of sucks the way it is. One can't even go look at vehicles and check the sticker to get an idea because who knows what it'll be like when you're ready to buy.

 

I think I said it somewhere else but a couple friends and I were over at our local GM dealer a few weeks ago because one of them wants a new silverado/sierra relatively soon(within a year or so) and he wanted to get an idea of prices. Anything we saw was either 37k(with the 4.3) or 42k+ for anything with the 5.3. We're either in school still or just finished and 42k for a vehicle is out of question and unreasonable. Also, he was pretty annoyed that EVERYTHING was a 4 door truck. There was nothing even close to base let alone one close to base with the 5.3.  But who the F knows what the actual price of those trucks are?!?   /Rant

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Exactly my thinking. 

 

For me, I don't mind negotiating a price. But there are probably way more people who get ripped off because they are scared or don't know how to negotiate a price.

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.

 

Are GM's costs that much lower? I don't want to start any sales arguments but didn't GM sell a considerable amount more of vehicles last year while profiting not that much more than Ford?  Wouldn't that insinuate that Ford has lower vehicle costs?

 

I realize that a million different things go into that overall profit number by the way so all of this is just a guestimate anway.

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.

Are GM's costs that much lower? I don't want to start any sales arguments but didn't GM sell a considerable amount more of vehicles last year while profiting not that much more than Ford?  Wouldn't that insinuate that Ford has lower vehicle costs?

 

I realize that a million different things go into that overall profit number by the way so all of this is just a guestimate anway.

Yes, GM's costs are that much lower than Ford's. GM is much better at spreading platform and driveline costs across the board than Ford. Consider: for half-ton pickups and full-size SUVs GM uses one basic frame architecture. Ford uses two. GM uses one premium chassis for three different car lines (CTS, ATS, Camaro). Ford uses three for their closest equivalents in those segments.

And true no-haggle pricing does not work. I guess I'm the only one on here this morning old enough to remember Saturn.

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.
Are GM's costs that much lower? I don't want to start any sales arguments but didn't GM sell a considerable amount more of vehicles last year while profiting not that much more than Ford?  Wouldn't that insinuate that Ford has lower vehicle costs?

 

I realize that a million different things go into that overall profit number by the way so all of this is just a guestimate anway.

Yes, GM's costs are that much lower than Ford's. GM is much better at spreading platform and driveline costs across the board than Ford. Consider: for half-ton pickups and full-size SUVs GM uses one basic frame architecture. Ford uses two. GM uses one premium chassis for three different car lines (CTS, ATS, Camaro). Ford uses three for their closest equivalents in those segments.

And true no-haggle pricing does not work. I guess I'm the only one on here this morning old enough to remember Saturn.

 

Understandable..

 

Why wouldn't it work if EVERYBODY did it? Would people just sop buying cars? lol

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You'd have to ask a psychologist or a sociologist that question. For legal reasons I am neither (but my educational background includes decent amounts of study in both).

For some reason, western culture has held onto haggling prices in the two most expensive fields most westerners will ever enter: real estate and automobiles. Compare that to the Middle East, where folks will haggle the cost of anything. IMO this is one of the reasons why you get the negative stereotypical views of folks from those regions being cheap or money-grubbers: they're just used to haggling, and so they do it well.

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.
Are GM's costs that much lower? I don't want to start any sales arguments but didn't GM sell a considerable amount more of vehicles last year while profiting not that much more than Ford?  Wouldn't that insinuate that Ford has lower vehicle costs?

 

I realize that a million different things go into that overall profit number by the way so all of this is just a guestimate anway.

Yes, GM's costs are that much lower than Ford's. GM is much better at spreading platform and driveline costs across the board than Ford. Consider: for half-ton pickups and full-size SUVs GM uses one basic frame architecture. Ford uses two. GM uses one premium chassis for three different car lines (CTS, ATS, Camaro). Ford uses three for their closest equivalents in those segments.

And true no-haggle pricing does not work. I guess I'm the only one on here this morning old enough to remember Saturn.

 

 

Ford's costs are even more basic than that.  Ford gets to wear the badge that they didn't take a bailout (not entirely true, but that's a different thread), however they are paying the price for it now with a much heavier debt load verses sales than GM. Some financial genius at Ford (I'm not being sarcastic) realized the crash was coming and got Ford to mortgage everything before the crash and that's why they were able to pull through without a bailout..... but they are still paying on that mortgage today.

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Good point. A while back we discussed this in specific terms of what it did to Lincoln being the low kid on the PAG totem pole, only to be the last brand standing when Ford spun off all the other brands in the group.

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.
Are GM's costs that much lower? I don't want to start any sales arguments but didn't GM sell a considerable amount more of vehicles last year while profiting not that much more than Ford?  Wouldn't that insinuate that Ford has lower vehicle costs?

 

I realize that a million different things go into that overall profit number by the way so all of this is just a guestimate anway.

Yes, GM's costs are that much lower than Ford's. GM is much better at spreading platform and driveline costs across the board than Ford. Consider: for half-ton pickups and full-size SUVs GM uses one basic frame architecture. Ford uses two. GM uses one premium chassis for three different car lines (CTS, ATS, Camaro). Ford uses three for their closest equivalents in those segments.

And true no-haggle pricing does not work. I guess I'm the only one on here this morning old enough to remember Saturn.

 

 

Ford's costs are even more basic than that.  Ford gets to wear the badge that they didn't take a bailout (not entirely true, but that's a different thread), however they are paying the price for it now with a much heavier debt load verses sales than GM. Some financial genius at Ford (I'm not being sarcastic) realized the crash was coming and got Ford to mortgage everything before the crash and that's why they were able to pull through without a bailout..... but they are still paying on that mortgage today.

 

 

GM had the luxury of dissolving their debt through BK. Excellent opportunity for them.

Not exactly a win-win for taxpayers though,

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.
Are GM's costs that much lower? I don't want to start any sales arguments but didn't GM sell a considerable amount more of vehicles last year while profiting not that much more than Ford?  Wouldn't that insinuate that Ford has lower vehicle costs?

 

I realize that a million different things go into that overall profit number by the way so all of this is just a guestimate anway.

Yes, GM's costs are that much lower than Ford's. GM is much better at spreading platform and driveline costs across the board than Ford. Consider: for half-ton pickups and full-size SUVs GM uses one basic frame architecture. Ford uses two. GM uses one premium chassis for three different car lines (CTS, ATS, Camaro). Ford uses three for their closest equivalents in those segments.

And true no-haggle pricing does not work. I guess I'm the only one on here this morning old enough to remember Saturn.

 

I have to disagree, Saturn worked and worked well up till GM stopped giving them new products that people wanted to buy. No haggle shopping worked well especially with woman, seniors and those that prefer to not have a sales person pressure them.

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Why not just adjust the price downward and be the cheapest msrp in the first place?

Totally agree, I think GM could destroy many other OEM's by taking a set price approach like they did with Saturn and price everything below the competition and let it sell as is.
Are GM's costs that much lower? I don't want to start any sales arguments but didn't GM sell a considerable amount more of vehicles last year while profiting not that much more than Ford?  Wouldn't that insinuate that Ford has lower vehicle costs?

 

I realize that a million different things go into that overall profit number by the way so all of this is just a guestimate anway.

Yes, GM's costs are that much lower than Ford's. GM is much better at spreading platform and driveline costs across the board than Ford. Consider: for half-ton pickups and full-size SUVs GM uses one basic frame architecture. Ford uses two. GM uses one premium chassis for three different car lines (CTS, ATS, Camaro). Ford uses three for their closest equivalents in those segments.

And true no-haggle pricing does not work. I guess I'm the only one on here this morning old enough to remember Saturn.

 

I have to disagree, Saturn worked and worked well up till GM stopped giving them new products that people wanted to buy. No haggle shopping worked well especially with woman, seniors and those that prefer to not have a sales person pressure them.

 

That's how I feel about the pricing/negotiating aspect of this.

 

Most, not all, but most salesmen suck anyway. They don't know dick about the vehicles they're trying to sell and they just want your money. Instead of them having the mindset of having to sell cars to feed their family(at the highest possible price) have them actually learn about the vehicles and their functions/features. I love it/drives me absolutely nuts when I go to a car dealership and I know everything about what I'm looking at and they are just dumbfounded and can't even really tell me anything about the vehicle I don't already know or that isn't already published in a magazine.

Edited by ccap41

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This is from Ford:

 

Customers can receive discounts of up to $7,050 on certain F-150 models, Ford said. Dealers in a handful of cities have added their own incentive package onto some trucks, which could reach $10,000.

Those incentive packages include discounts that are not F-150 specific, such as $750 off if financed through Ford Credit, or $2,500 back in bonus cash. Ford said Thursday the average F-Series incentive was $3,100 per truck — less than the industry average and about $600 less than what Ford offered this time last year on the previous-generation truck.

“I don’t know if (the incentives are) a huge deal,” Kelley Blue Book analyst Akshay Anand said. “In some cases they’re isolated instances. By and large, it’s not a demand issue across the nation for the F-150. It seems like it may be a marketing thing more than anything.”

Demand appears to be strong for the aluminum-bodied pickup. Ford said the trucks 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.

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