jasonj80 Posted August 9, 2021 Share Posted August 9, 2021 One other thing that is also helping the industry dramatically on pricing is the old Chrysler/FCA leadership is gone. PSA leadership has shown it is much more focused on profit than volume. 1 Quote Link to comment Share on other sites More sharing options...
2005Explorer Posted August 9, 2021 Share Posted August 9, 2021 21 hours ago, Donaldo said: Ford has been doing this for a long time with premium trim levels and sub-brands like SVT/Raptor/ST, Shelby, King Ranch, Platinum, etc. Maybe Ford will still sell mainstream and premium products within the same brand. If a premium strategy is the way to go why not discontinue all F-Series XLT and XL models and focus on Lariat and above? Let Ram and GM have all those cheap rubber floor fleet sales and value driven products like STX since there is a lot more profit in luxury truck sales. I'm not saying they should do this, but removing all less then premium trim in their product lines would increase product. Correct? Quote Link to comment Share on other sites More sharing options...
akirby Posted August 9, 2021 Share Posted August 9, 2021 1 hour ago, 2005Explorer said: If a premium strategy is the way to go why not discontinue all F-Series XLT and XL models and focus on Lariat and above? Let Ram and GM have all those cheap rubber floor fleet sales and value driven products like STX since there is a lot more profit in luxury truck sales. I'm not saying they should do this, but removing all less then premium trim in their product lines would increase product. Correct? I think you totally misinterpreted that. Things like Raptor prove Ford can charge a premium for products that are truly best in class and/or unique. That doesn’t mean they abandon cheaper models. But it means you don’t build cheaper models and give them away. For F150 it just means lower rebates on XL and XLT models which might reduce volumes depending on what other mfrs do. Might also mean dropping some base level trims in favor of mid levels. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 9, 2021 Share Posted August 9, 2021 1 hour ago, akirby said: Might also mean dropping some base level trims in favor of mid levels. Ford is doing that for F-150 Lightning. The base trim called "Pro" is for fleet customers. For real retail customers, Ford is emphasizing 2 mid series (XLT and Lariat) and 1 high series (Platinum). Quote Link to comment Share on other sites More sharing options...
rmc523 Posted August 9, 2021 Share Posted August 9, 2021 1 hour ago, akirby said: I think you totally misinterpreted that. Things like Raptor prove Ford can charge a premium for products that are truly best in class and/or unique. That doesn’t mean they abandon cheaper models. But it means you don’t build cheaper models and give them away. For F150 it just means lower rebates on XL and XLT models which might reduce volumes depending on what other mfrs do. Might also mean dropping some base level trims in favor of mid levels. Also, while we can (hopefully not) revisit the whole dropping cars decision, Maverick also shows that they're not completely abandoning the lower/cheaper and of the market. I'm sure as time goes along, we'll see them add other models to different parts of the lineup (EcoSport needs help). 2 Quote Link to comment Share on other sites More sharing options...
jcartwright99 Posted August 9, 2021 Share Posted August 9, 2021 28 minutes ago, rperez817 said: Ford is doing that for F-150 Lightning. The base trim called "Pro" is for fleet customers. For real retail customers, Ford is emphasizing 2 mid series (XLT and Lariat) and 1 high series (Platinum). Is that a fact that the "pro" trim is fleet only? I hadn't heard that if so. I know that is what Ford has been marketing it as. Quote Link to comment Share on other sites More sharing options...
akirby Posted August 9, 2021 Share Posted August 9, 2021 15 minutes ago, jcartwright99 said: Is that a fact that the "pro" trim is fleet only? I hadn't heard that if so. I know that is what Ford has been marketing it as. Its not restricted to fleet buyers as far as I can tell. Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted August 9, 2021 Share Posted August 9, 2021 22 minutes ago, rmc523 said: Also, while we can (hopefully not) revisit the whole dropping cars decision, Maverick also shows that they're not completely abandoning the lower/cheaper and of the market. I'm sure as time goes along, we'll see them add other models to different parts of the lineup (EcoSport needs help). Puma is the number one seller for Ford in Europe. Hopefully Ford can figure out a way to bring it here. Mexican assembly perhaps to price it below Escape. Quote Link to comment Share on other sites More sharing options...
rmc523 Posted August 9, 2021 Share Posted August 9, 2021 21 minutes ago, FordBuyer said: Puma is the number one seller for Ford in Europe. Hopefully Ford can figure out a way to bring it here. Mexican assembly perhaps to price it below Escape. I think it'd do relatively well here - buyers in that segment seem to like both practicality but also some uniqueness - like Soul. Farley has said he'd like Puma here, but the question will be can it be federalized easily. It'd have to fit into Hermosillo somehow as the only non-EV mexican plant, though. Quote Link to comment Share on other sites More sharing options...
Donaldo Posted August 9, 2021 Share Posted August 9, 2021 (edited) 4 hours ago, 2005Explorer said: If a premium strategy is the way to go why not discontinue all F-Series XLT and XL models and focus on Lariat and above? Let Ram and GM have all those cheap rubber floor fleet sales and value driven products like STX since there is a lot more profit in luxury truck sales. I'm not saying they should do this, but removing all less then premium trim in their product lines would increase product. Correct? It's been noted the Maverick hybrid is build to order only. This may be an indication of the way forward, stocking dealer lots with profitable high level trim models and special editions, and leave the lower margin XLTs for customers to order. Just like Porsche, not a stripper to be found anywhere on the lot unless a customer cancelled their order. This way dealers won't have to absorb the flooring costs of low margin vehicles. Customers who must buy something right off the lot will pay the premium, increasing profits. Edited August 9, 2021 by Donaldo 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 9, 2021 Share Posted August 9, 2021 2 hours ago, jcartwright99 said: Is that a fact that the "pro" trim is fleet only? I hadn't heard that if so. I know that is what Ford has been marketing it as. For a definitive answer it would be best to wait until ice-capades can share the 2022 F-150 Lightning order guide on this site. The order guide should have details about fleet/FIN code restrictions for specific trim levels and options, and if applicable, the retail series mix for each trim as a % of total model sales. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 9, 2021 Share Posted August 9, 2021 25 minutes ago, Donaldo said: It's been noted the Maverick hybrid is build to order only. This may be an indication of the way forward, stocking dealer lots with profitable high level trim models and special editions, and leave the lower margin XLTs for customers to order. Just like Porsche, not a stripper to be found anywhere on the lot unless a customer cancelled their order. This way dealers won't have to absorb the flooring costs of low margin vehicles. Customers who must buy something right off the lot will pay the premium, increasing profits. Thank you Donaldo sir, that's a very smart approach for both automakers and dealers. Hopefully Ford can achieve not only what you mentioned, but keep dealer stock for new vehicles relatively low in number and encourage most new vehicle customers to do sold retail orders. Quote Link to comment Share on other sites More sharing options...
CKNSLS Posted August 9, 2021 Share Posted August 9, 2021 37 minutes ago, rperez817 said: Thank you Donaldo sir, that's a very smart approach for both automakers and dealers. Hopefully Ford can achieve not only what you mentioned, but keep dealer stock for new vehicles relatively low in number and encourage most new vehicle customers to do sold retail orders. So-the only issue is that will GM and RAM play along? You can make an argument that one can get a "decent" truck no matter what one buys from the three I mentioned. For those who don't want to order and wait-and are indifferent to brands-and the competition has more choices on their lot, with immediate delivery-IS THAT GOING TO MAKE A DIFFERENCE? This month GM had an incentive of $4,500 off of certain Silverados. Quote Link to comment Share on other sites More sharing options...
ice-capades Posted August 9, 2021 Share Posted August 9, 2021 1 hour ago, rperez817 said: For a definitive answer it would be best to wait until ice-capades can share the 2022 F-150 Lightning order guide on this site. The order guide should have details about fleet/FIN code restrictions for specific trim levels and options, and if applicable, the retail series mix for each trim as a % of total model sales. From what I see, Ford hasn't released the timeline for the 2022 F-150 Lightning yet. Until they announce the USOB (Unscheduled Order Bank) opening date we won't know when to expect the order guide to be available. 2 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 9, 2021 Share Posted August 9, 2021 1 hour ago, CKNSLS said: So-the only issue is that will GM and RAM play along? I think they will. mackinaw shared an Automotive News article earlier in this thread topic indicating GM may emphasize a build to order arrangement in the U.S. market similar to Jim Farley's plans at Ford. And jasonj80 mentioned that Stellantis' current leadership is more focused on profitability than their predecessors at FCA which may mean that Ram will play along too. 2 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 9, 2021 Share Posted August 9, 2021 1 hour ago, CKNSLS said: This month GM had an incentive of $4,500 off of certain Silverados. …….that are hard to shift? Quote Link to comment Share on other sites More sharing options...
akirby Posted August 9, 2021 Share Posted August 9, 2021 2 hours ago, CKNSLS said: So-the only issue is that will GM and RAM play along? You can make an argument that one can get a "decent" truck no matter what one buys from the three I mentioned. For those who don't want to order and wait-and are indifferent to brands-and the competition has more choices on their lot, with immediate delivery-IS THAT GOING TO MAKE A DIFFERENCE? This month GM had an incentive of $4,500 off of certain Silverados. Theyre not going to make F150 XLs and XLTs special order only. Too much volume and too much competition. The reason Maverick hybrid will be order only is that they expect to have more demand than supply. Otherwise they’d have those on the lot too. Its about minimizing build combinations for dealer stock, not eliminating models entirely. Quote Link to comment Share on other sites More sharing options...
CKNSLS Posted August 10, 2021 Share Posted August 10, 2021 1 hour ago, jpd80 said: …….that are hard to shift? Please explain..... Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 10, 2021 Share Posted August 10, 2021 27 minutes ago, CKNSLS said: Please explain..... That amount of incentive ($4,500) is generally applied to stock that needs to be moved on, usually comes as a final payment from GM to dealers to clear remaining stock. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 10, 2021 Share Posted August 10, 2021 1 hour ago, akirby said: Theyre not going to make F150 XLs and XLTs special order only. Too much volume and too much competition. The reason Maverick hybrid will be order only is that they expect to have more demand than supply. Otherwise they’d have those on the lot too. Its about minimizing build combinations for dealer stock, not eliminating models entirely. And also to reserve as many builds as possible for customer orders, so people wanting a hybrid can get one. It also helps to know how many need to be built and when so that parts can be scheduled in between the 2.0 EBs. Quote Link to comment Share on other sites More sharing options...
Donaldo Posted August 10, 2021 Share Posted August 10, 2021 23 hours ago, akirby said: Theyre not going to make F150 XLs and XLTs special order only. Too much volume and too much competition. The reason Maverick hybrid will be order only is that they expect to have more demand than supply. Otherwise they’d have those on the lot too. This probably assumes it's cheap for dealers to have a lot of inventory (and staff) on the lot with 'volume leaders'. Will be interesting to see how this plays out. Maybe more dealers will be downsizing and focusing on after sales service to become more profitable. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted August 10, 2021 Share Posted August 10, 2021 13 minutes ago, Donaldo said: This probably assumes it's cheap for dealers to have a lot of inventory (and staff) on the lot with 'volume leaders'. Will be interesting to see how this plays out. Maybe more dealers will be downsizing and focusing on after sales service to become more profitable. I think Ford mentioned 45-60 days supply. I think you’ll see fewer option combinations on dealer stock reducing the number of vehicles they have to keep on the lot but allowing the current levels of customizations on special orders. And probably rebates for ordering. If they can manage the supply chain and get orders built in 3 weeks it might just work. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted August 11, 2021 Share Posted August 11, 2021 53 minutes ago, Donaldo said: This probably assumes it's cheap for dealers to have a lot of inventory (and staff) on the lot with 'volume leaders'. Will be interesting to see how this plays out. Maybe more dealers will be downsizing and focusing on after sales service to become more profitable. It's not cheap at all for dealers to have a lot of new vehicle inventory, quite the opposite. Excessive floorplan expenses from this practice are very destructive to the profitability of dealerships as well as for automakers. You are correct Donaldo sir that dealers will downsize and focus more on fixed operations. Other trends for U.S. new car dealerships in the next decade include the following. Much lower dealer stock for new vehicles Steering customers who want to "drive home in a vehicle the same day" to used cars Online tools that encourage new vehicle customers to do a reservation and sold retail order "Virtual showroom" presentations of vehicles to prospective customers Expansion of contactless transactions including at home delivery for both new and used vehicles More charging stations for plug-in vehicles at dealership locations Lots of investment in technology for servicing BEV Major recruitment drives for service techs Quote Link to comment Share on other sites More sharing options...
twintornados Posted August 11, 2021 Share Posted August 11, 2021 9 minutes ago, rperez817 said: It's not cheap at all for dealers to have a lot of new vehicle inventory, quite the opposite. Excessive floorplan expenses from this practice are very destructive to the profitability of dealerships as well as for automakers. The floor plan expense is usually carried by the manufacturer and if the dealer sells the inventory quicker than the length of the floor plan interest note, the dealer gets the difference. I remember when my dad sold Zenith televisions, it was the same set up...had over 100 models on display and Dad would get the floor plan $$. I remember him ordering extra inventory and getting two 30 day extensions on the standard 90 day floor plan note...moving that inventory out with big "truckload sale" banners...and pocketing the extra back to him. 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted August 11, 2021 Share Posted August 11, 2021 On 8/10/2021 at 2:06 AM, 2005Explorer said: If a premium strategy is the way to go why not discontinue all F-Series XLT and XL models and focus on Lariat and above? Let Ram and GM have all those cheap rubber floor fleet sales and value driven products like STX since there is a lot more profit in luxury truck sales. I'm not saying they should do this, but removing all less then premium trim in their product lines would increase product. Correct? XL and XLT are self limiting sales wise, they’re basically good fleet business that adds to the bottom line, especially crew cabs. Quote Link to comment Share on other sites More sharing options...
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