rperez817 Posted February 5, 2021 Share Posted February 5, 2021 1 hour ago, bzcat said: high profit F150 fleet sales Contradiction in terms. You can have "high profit", and you can have "F-150 fleet sales". But not both. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted February 5, 2021 Share Posted February 5, 2021 33 minutes ago, rperez817 said: Contradiction in terms. You can have "high profit", and you can have "F-150 fleet sales". But not both. F-series is the exception that proves the rule Quote Link to comment Share on other sites More sharing options...
rmc523 Posted February 5, 2021 Share Posted February 5, 2021 4 hours ago, rperez817 said: There's ample demand for new 2021 F-150 by retail consumers. Ford is focused on getting current F-150 owners on the retail side to "upgrade" to the new version, which is definitely the right strategy. The quality of sales matters more than quantity in this case. And that means any decline in fleet sales with 2021 F-150 compared to the previous model is a very good thing. 43 minutes ago, rperez817 said: Contradiction in terms. You can have "high profit", and you can have "F-150 fleet sales". But not both. They are not mutually exclusive. I'm not sure why you're so hellbent on proving F-series fleet sales are bad, when they're not. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted February 5, 2021 Share Posted February 5, 2021 1 hour ago, rperez817 said: Contradiction in terms. You can have "high profit", and you can have "F-150 fleet sales". But not both. You're absolutely dead wrong on this one. Again. 2 1 Quote Link to comment Share on other sites More sharing options...
twintornados Posted February 5, 2021 Share Posted February 5, 2021 8 hours ago, atomcat68 said: I was always under the impression that the E stood for Econoline. Well, of course it does....just that "E-Series" fit the whole "<insert letter here> -Series" saga that Ford was moving to a few years back. 5 hours ago, ice-capades said: Doesn't make a difference really as E-Series and Econoline have always been the same. Yup, I still think of it as Econoline....they should bring back the name for their vocational medium truck lines. 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted February 5, 2021 Share Posted February 5, 2021 1 hour ago, rmc523 said: I'm not sure why you're so hellbent on proving F-series fleet sales are bad, when they're not. I have nothing to prove here. The fact of the matter is that under conditions of tight supply and high consumer demand, as was the case for 2021 F-150 in January 2021, the best strategy would be to make sales of the truck to real, retail consumers a priority over lower profit, lower quality fleet customers. Ford did just that. They wrote this in the press release. "Ford January sales represented a very healthy mix with a strong focus on retail results" "As F-150 retail sales track with the rebuilding of Ford’s inventory, we continue to see strong days to turn on dealer lots of 13 days, with a rich mix of high trim series models totaling 31 percent. January F-150 retail sales had the biggest impact in America’s largest full-size pickup market, Texas, with retail sales of 16.1 percent" Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 5, 2021 Share Posted February 5, 2021 If F150 is only seeing 13 days turnaround on lots, that means they can sell a lot more. 2 Quote Link to comment Share on other sites More sharing options...
akirby Posted February 5, 2021 Share Posted February 5, 2021 28 minutes ago, rperez817 said: I have nothing to prove here. The fact of the matter is that under conditions of tight supply and high consumer demand, as was the case for 2021 F-150 in January 2021, the best strategy would be to make sales of the truck to real, retail consumers a priority over lower profit, lower quality fleet customers. Ford did just that. They wrote this in the press release 4 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted February 5, 2021 Share Posted February 5, 2021 42 minutes ago, rperez817 said: I have nothing to prove here. The fact of the matter is that under conditions of tight supply and high consumer demand, as was the case for 2021 F-150 in January 2021, the best strategy would be to make sales of the truck to real, retail consumers a priority over lower profit, lower quality fleet customers. Ford did just that. They wrote this in the press release. Biker, is that you? 1 Quote Link to comment Share on other sites More sharing options...
bzcat Posted February 5, 2021 Share Posted February 5, 2021 (edited) 1 hour ago, rperez817 said: I have nothing to prove here. The fact of the matter is that under conditions of tight supply and high consumer demand, as was the case for 2021 F-150 in January 2021, the best strategy would be to make sales of the truck to real, retail consumers a priority over lower profit, lower quality fleet customers. Ford did just that. They wrote this in the press release. Truck and van fleet sales are not low profit, no matter what you think or say. It is a bedrock of Ford's margin in North America. Without F-150 fleet sale and the huge predictable profit and cash flow it brings in, Ford will be in bankruptcy court in a couple of weeks. Ford may be prioritizing retail delivery F-150 this month over fleet sales but that could be due to a number of factors such as inventory mix - meaning they don't have the truck that fleet buyers want in stock. But in the following month, they could be sending 3,000 trucks to a single fleet buyer once they have enough of that configuration for delivery. Edited February 5, 2021 by bzcat 2 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted February 6, 2021 Share Posted February 6, 2021 2 hours ago, jpd80 said: If F150 is only seeing 13 days turnaround on lots, that means they can sell a lot more. Yes sir jpd80. That's why Ford is doing the right thing by maximizing the quality of 2021 F-150 sales, since they are constrained on quantity. Quote Link to comment Share on other sites More sharing options...
rmc523 Posted February 6, 2021 Share Posted February 6, 2021 4 minutes ago, rperez817 said: Yes sir jpd80. That's why Ford is doing the right thing by maximizing the quality of 2021 F-150 sales, since they are constrained on quantity. I don't think they're doing anything outside of normal processes for it. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted February 6, 2021 Share Posted February 6, 2021 44 minutes ago, bzcat said: Ford may be prioritizing retail delivery F-150 this month over fleet sales but that could be due to a number of factors It's due to 2 factors. 1. Low supply of 2021 F-150 relative to consumer demand 2. Ford's goal of attaining 10% operating margin in North America Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 6, 2021 Share Posted February 6, 2021 (edited) 14 minutes ago, rperez817 said: Yes sir jpd80. That's why Ford is doing the right thing by maximizing the quality of 2021 F-150 sales, since they are constrained on quantity. What I meant was that until Ford gets back on top of inventory shortfall, there's a lot of buys from dealer stock that just not happening but I wouldn't base too much on January sales, these are normally more fleet laden for F Series and the timing of deliveries can sometimes make figures look worse than they are. Chip shortages and restricted 6.7 supply from Mexico are other underlying factors. And if put it to you that commercial fleet sales of F150 are still comparatively high and nothing like most people's perception of fleet sales as rental strippers. Edited February 6, 2021 by jpd80 Quote Link to comment Share on other sites More sharing options...
FR739 Posted February 6, 2021 Share Posted February 6, 2021 8 hours ago, rperez817 said: Contradiction in terms. You can have "high profit", and you can have "F-150 fleet sales". But not both. You are 100% spot on. There is no way Ford, or any manufacturer, is making a lot of money on fleet sales. They make some but not a ton or anything you’d consider “high profit”. I bet Ford makes more on a retail Escape purchase than a fleet F150. I have a good friend that buys vehicles off of the state bid and a crew cab F150 with the 3.5L, 4x4, and a few other things is $33k. Same price as a N/A Explorer. That truck in the retail world is a $46k truck. Oddly enough the Ranger is also right around $33k along with a basic F250. 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 6, 2021 Share Posted February 6, 2021 (edited) 3 hours ago, FR739 said: You are 100% spot on. There is no way Ford, or any manufacturer, is making a lot of money on fleet sales. They make some but not a ton or anything you’d consider “high profit”. I bet Ford makes more on a retail Escape purchase than a fleet F150. I have a good friend that buys vehicles off of the state bid and a crew cab F150 with the 3.5L, 4x4, and a few other things is $33k. Same price as a N/A Explorer. That truck in the retail world is a $46k truck. Oddly enough the Ranger is also right around $33k along with a basic F250. With respect, I think that you're taking an extreme case of lowest bid price purchasers to prove a point with F150 commercial sales. I'm pretty sure that there's a ton of small business owners who get a fleet ID number to buy anything but those base engined XL versions and then write most of the costs off against their business. In fairness, I agree that F150 commercial fleet profit margins are much lower than retail. I sometimes conflate F150 with F Series commercial fleet sales, the Super Dutys are just profit animals, most are "commercial fleet sales" Edited February 6, 2021 by jpd80 Quote Link to comment Share on other sites More sharing options...
ice-capades Posted February 6, 2021 Share Posted February 6, 2021 (edited) Fleet and retail sales are completely different animals regarding prices, incentives, order specifications, scheduling process, etc. and the profit motive is different with part of the fleet pricing being promotional and branding with government related fleet sales having the largest fleet incentives. In the vast majority of cases, fleet sales are ordered units and not sold from dealer stock. Dealers may stock fleet units for accounts that have vehicle needs on a regular basis but those fleet vehicles sitting in stock are a dealership floorplan expenses until sold and delivered just like other inventory. Otherwise, it's difficult to stock fleet units because fleets all have their own needs and specifications. Allocation issues only apply to retail orders as the fleet scheduling is completely separate from the retail order process. Dearborn decides the fleet production volume based on various factors including vehicle line, previous history, time of year, etc. For government agency related sales the time of year is an important factor as those orders are dependent on not just account needs but on the available funds budgeted for vehicle purchases. In addition, it's important to realize that fleet factory orders are subject to substantially longer lead times for scheduling and production. I've included copies of Fleet Estimated Lead Time (Order-to-Delivery). Hope this information helps give some better perspective to fleet sales and orders. FDNB _2104_2021-01-29_Fleet Scheduling.pdf Edited February 6, 2021 by ice-capades Additional content 1 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted February 6, 2021 Share Posted February 6, 2021 9 hours ago, FR739 said: You are 100% spot on. There is no way Ford, or any manufacturer, is making a lot of money on fleet sales. They make some but not a ton or anything you’d consider “high profit”. I have a good friend that buys vehicles off of the state bid and a crew cab F150 with the 3.5L, 4x4, and a few other things is $33k. Same price as a N/A Explorer. That truck in the retail world is a $46k truck. That’s not a $46K truck in the retail world. They always have minimum $4500 rebates and other discounts. You could buy it for $38k all day. My $48k XLT went out the door for $37k When you consider that the margin on F series has been estimated at over $10k per unit, selling fleet at a $5K discount leaves $5K profit. And it’s even more on higher end F150s and super duty’s and low volume fleet deals. That’s still way more profit than an Escape or Edge. Quote Link to comment Share on other sites More sharing options...
FR739 Posted February 6, 2021 Share Posted February 6, 2021 7 hours ago, jpd80 said: With respect, I think that you're taking an extreme case of lowest bid price purchasers to prove a point with F150 commercial sales. I'm pretty sure that there's a ton of small business owners who get a fleet ID number to buy anything but those base engined XL versions and then write most of the costs off against their business. In fairness, I agree that F150 commercial fleet profit margins are much lower than retail. I sometimes conflate F150 with F Series commercial fleet sales, the Super Dutys are just profit animals, most are "commercial fleet sales" That’s an interesting thought. Is your average fleet buyer charged a vastly different price than a state bid type contract. I never considered that. But yes over my point is that while they still probably make some money at fleet pricing it is drastically smaller than retail. In my example you don’t go from $46k (from Fords website) to $33k and expect your margins to still be considered “high”. Also, I know that’s not a clean comparison as the trucks aren’t exactly the same but it was very close. And Ice that info was very helpful thank you! 1 Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted February 6, 2021 Share Posted February 6, 2021 11 hours ago, FR739 said: You are 100% spot on. There is no way Ford, or any manufacturer, is making a lot of money on fleet sales. They make some but not a ton or anything you’d consider “high profit”. I bet Ford makes more on a retail Escape purchase than a fleet F150. I have a good friend that buys vehicles off of the state bid and a crew cab F150 with the 3.5L, 4x4, and a few other things is $33k. Same price as a N/A Explorer. That truck in the retail world is a $46k truck. Oddly enough the Ranger is also right around $33k along with a basic F250. Ford is not as aggressive in pricing to fleets as Chevy and Ram. I know in my district Chevy fleet pickups rule as they undercut Ford in price. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted February 6, 2021 Share Posted February 6, 2021 (edited) Very informative post ice-capades sir, thank you as always for sharing your dealership perspective. What you mentioned about government related fleet incentives and the budget approval process mirrors my own experience working with employees of GSA in the federal government. Edited February 6, 2021 by rperez817 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted February 6, 2021 Share Posted February 6, 2021 6 hours ago, FR739 said: That’s an interesting thought. Is your average fleet buyer charged a vastly different price than a state bid type contract. I never considered that. But yes over my point is that while they still probably make some money at fleet pricing it is drastically smaller than retail. In my example you don’t go from $46k (from Fords website) to $33k and expect your margins to still be considered “high”. Also, I know that’s not a clean comparison as the trucks aren’t exactly the same but it was very close. And Ice that info was very helpful thank you! The fleet discount on F150s is $2500-$3k with additional discounts for large volumes. Even a $3300 profit on a $33k truck is 10%. If you don’t think that’s a high profit margin you haven’t been paying attention. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted February 6, 2021 Share Posted February 6, 2021 26 minutes ago, akirby said: The fleet discount on F150s is $2500-$3k with additional discounts for large volumes. Even a $3300 profit on a $33k truck is 10%. If you don’t think that’s a high profit margin you haven’t been paying attention. This is correct. The auto industry is one of the lowest margin industries in the world. 5% is considered high. For Ford to be consistently at 8% or above right now is unreal. 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted February 6, 2021 Share Posted February 6, 2021 (edited) 1 hour ago, akirby said: The fleet discount on F150s is $2500-$3k with additional discounts for large volumes. Even a $3300 profit on a $33k truck is 10%. If you don’t think that’s a high profit margin you haven’t been paying attention. A fleet manager that approves an order of F-150s in which the discount from MSRP is only $2,500 - $3,000 will soon be seeking employment in a different field. Edited February 6, 2021 by rperez817 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted February 7, 2021 Share Posted February 7, 2021 (edited) 8 hours ago, FR739 said: That’s an interesting thought. Is your average fleet buyer charged a vastly different price than a state bid type contract. I never considered that. Yep, one off fleet buyers don't get those state fleet price deals. I'll give you a feeling of bare bones F150 price/cost. The web price for SC XL is $28k, so assume a state fleet price of ~$5k less and you're getting close to cost at maybe $23k or base Ranger........ And that's also why Ford doesn't give much production space to SC sales to fleet, better business building crew cabs Edited February 7, 2021 by jpd80 Quote Link to comment Share on other sites More sharing options...
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