The sales of Ford Motor Co.'s biggest moneymaker — the F-Series pickups — held up in August despite the automaker still working to ramp up production and inventory of the trucks.
From January to the end of July, Ford said it is also is seeing stronger prices for its vehicles compared to the year-ago period. Ford's head of sales said he expects prices to hold steady through the end of the year, but does not expect to make a price increase on the F-150 this year.
On Sept. 2, Ford reported its August sales. Total sales for the month were down 10.3% to 170,681 units sold compared with the year-ago period, in part due to the discontinuation of the Ford Escape compact SUV and the Lincoln Corsair compact SUV. Ford also is struggling to ramp up its F-Series
inventory to replace lost production due to a fire at an aluminum supplier last year.
For the year through the end of August, Ford's total sales are down 9.8% to 1,347,147 sold.
Ford said its sales of the F-Series pickup were down just 1.2% to 67,504 sold in August compared to a year earlier. Year-to-date F-Series sales are down 10.9% to 494,060 sold — but it is still on track to lead the industry as the top-selling pickup.
Rebuilding F-Series inventory
The F-Series inventory remains on the low side due to two fires last fall at Ford's key aluminum supplier, Novelis in New York. The halt to aluminum production resulted in disrupted production of the F-Series along with some Ford SUVs, constraining inventory. Ford uses aluminum in the bodies of its pickups and SUVs.
Ford implemented a number of steps in its manufacturing process, including canceling summer shutdown, to make up for the lost pickup production. In June, Novelis restarted its aluminum production and Ford has been catching up on production ever since.
"We managed through the Novelis fire, and the F-150 has a 41% turn rate, which speaks to the consumer demand we continue to see for the F-150. So we are managing well given a pretty low-day supply," Rob Kaffl, Ford's director of U.S. sales and dealer relations, said during a Sept. 2 phone interview with a few journalists.
A turn rate is the number of times a business sells and restocks a product, so the higher the turn rate, the greater demand for that product. In Ford's case, the F-150s turn rate is high considering Ford only has a 40-day supply of F-150s at dealerships as the end of August, Kaffl said. The industry standard for a healthy day supply of vehicles is usually 60 days.
“We’re increasing production (on F-Series) and dealers will start seeing that in their inventory in the next 30 to 90 days as we ramp up," Kaffl said. "We have a healthy amount in transit and in system.”
Kaffl said Ford wants to get F-150 inventory to a 50 to 60 day supply and hold it there.
"The thing we’re focusing our dealers on now is turn rate," Kaffl said. "A healthy dealer network doesn’t have a 70 or 80 days turn. So we think keeping it at a 50 day supply is healthy."
Ford's prices remain high
When asked what was Ford's average transaction price across its brands portfolio in August, Kaffl declined to release that figure saying, "Overall pricing has held up over the entire industry. In our business, it has held up especially with F-Series. We have been able to protect our pricing with the power of the vehicles we have to offer."
Cox Automotive tracks average transaction prices across automakers, but it does not have enough data yet for August to supply figures. The average transaction price is the price a customer pays for a vehicle after all incentives and trade-in values are deducted from the price.
Cox Automotive did share the average transaction prices for the Detroit automakers from January through the end of July and Ford is the highest thanks to its high-end mix of pickups sold. Also, Ford sees regular sales growth in popular trims such as off-road and performance packages which tack on a premium to a vehicle's price. A Ford F-150 base starts at $39,585, according to www.ford.com. The off-road Tremor trim starts at $64,915 and a performance Raptor version with a 5.2L supercharged V8 engine starts at $79,005.
The Average Transaction Prices through the end of July according to Cox Automotive are as follows:
- Ford Motor: $58,509, up 5.6% from the year-ago period.
- Stellantis (Chrysler, Dodge, Jeep, Ram, Fiat): $57,259 up 6.5% from the year-ago period.
- General Motors: $54,142 up 1.6% from the year-ago period.
- Industry: $49,644 up 2.5% from the year-ago period.
Kaffl said Ford's "biggest asset" is the loyalty of its truck customers and plans to keep prices in a range that will keep them returning.
"We have close to 12 million customers today who are driving an F-Series," Kaffl said. "We believe we can protect that pricing with the current owner base coming in to get a new Ford, so we believe the pricing will hold up until the year end.”
Jamie L. LaReau is the senior autos writer for USA TODAY Co. who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.
This article originally appeared on Detroit Free Press: Ford works to restock F-Series inventories. What it means for prices
