It turns out that Ford's new pickup truck wasn't that big a risk after all
Newspress USA
The big change? The F-150, America's bestselling vehicle - car or truck - for over three decades would be "lightweighted" through the use of a lot more aluminum in its construction, replacing traditional steel.
The obvious concern was that the F-150's core customers would basically decide that aluminum was too wimpy for a full-size pickup truck, that the revamped F-150 couldn't endure the rigors of the ranch or the construction site.
It turns out that nobody cared. The F-150 is still selling just fine. True, the re-tooling of Ford's production lines to build the new pickup briefly curtailed supply, but Ford still moved 754,000 units in the total F-Series lineup in 2o14. It's been the bestselling truck in the US for 38 years and the bestselling vehicle for 33.
"We are exactly on plan with where we expected to be with the launch," Ford Mark Fields CEO said on Thursday on the company's fourth-quarter earnings call.
Ultimately, Ford's ongoing success is extremely dependent on the F-150. So sure, it was nominally a risk to remake the pickup to be lighter, which in turn has made it more fuel-efficient and better able to support Ford's goal of meeting the US government's mpg objectives by 2025.
But in retrospect, it was clearly not that big a deal. Ford very astutely assessed the true risk - and with discipline, executed on its plan.
And now the automaker is in a great position to reap the benefits of having an innovative, brand-new version of its bestselling vehicle in the market - a US market that could hit 17-18 million in annual sales in 2015, with nearly a million of that potentially...F-Series pickups!
"In the near term, production of the new F-150 will accelerate into the second quarter and thus far pricing and demand have been better than expected, which could provide upside to our 2015 and 2016 assumptions if the trend continues," Sterne Agee auto analyst Michael Ward said in a research note this week.
Ward's assumptions include a modest surge in Ford's share price, from about $15 now to a target of $20.
The stock was trading down slightly on Friday.
Yahoo Finance
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