Why the 2015 Ford F-150 is Selling Like Hotcakes

Source: Ford Motor Company
Source: Ford

Trucks are very important for Ford. As the top-selling vehicle in the United States for longer than I’ve been alive, the F-150 is especially important for Ford. It’s a record that means a lot to the company, and no matter what the future of pickup trucks eventually looks like, finishing in second place will never be acceptable for the F-150.

Other than pride, one of the benefits of being the top-selling vehicle in the country is that Ford makes a lot of money from F-150 sales. In fact, the rumor is that Ford makes 90% of its profits from F-Series truck sales alone. No one has ever officially confirmed that rumor for me, but I have been told it’s pretty close to true.

Considering how much money it makes off trucks and how dependent its profitability is on truck sales, making major changes to the F-150 is a big deal. Ford did just that with the most recent redesign, switching to an aluminum construction that dropped the weight and increased fuel economy. If buyers didn’t accept the change, it would be a huge blow to both Ford’s pride and its bottom line.

If you want any idea how well customers are accepting the new F-150, take a look at Ford’s June sales press release.

The first takeaway from that report is that the redesign has clearly not hurt sales. Compared to industry average for half-ton pickup trucks, the F-150 is selling twice as quickly. At this point, Ford is pretty much building those trucks as fast as it can.

What’s perhaps even bigger news is that the average transaction price for the F-Series is now up to $44,000 per truck. Compared to 2014, that’s a $3,600 increase, and it’s an all-time record as well. Truck buyers don’t just want lots of F-150s – they’re willing to pay quite a bit of money for each truck they buy.

Source: Ford
Source: Ford

So what does this all mean for Ford? The first takeaway is that the redesign and change in materials has led to the F-150 becoming a more desirable truck. Second, when people are buying the F-150, they’re not looking for a stripped-out work truck. Instead, they’re willing to pay for options that make the drive more comfortable and enjoyable. Thirdly, high transaction prices, quick sales, and low incentives mean Ford’s probably going to make a massive amount of money in the coming year.

Perhaps the best thing about Ford selling its trucks so successfully is that it’s going to have the cash to continue financing the development of vehicles that enthusiasts love but are unlikely to sell in large volumes. Everyone loves the new Ford GT, but the supercar segment is never going to be profitable enough to have a noticeable impact on Ford’s bottom line.

The Focus RS is another example of a car that’s incredibly cool but never going to sell in large quantities. I, personally, love the idea of a 345-horsepower, all-wheel-drive hot hatch, but it’s also far from what most people would consider a mainstream car. Ford’s awesome for building it anyways.

Who knows what performance variants Ford might build next. Will there be a Fiesta RS? Will there be a Fusion ST? What about a successor to the F-150 SVT Lighting? I don’t know, but I’m excited to find out.

In a sense, Ford’s in a similar situation as Porsche. The Cayenne and Macan are selling like hotcakes and bringing in plenty of cash, so why not build a Cayman GT4 or a 911 Targa 4 GTS? Porsche will only sell a few of them, but enthusiasts will love them, and the cool performance cars bolster the brand’s reputation.

In the same way, Ford can afford to invest in halo vehicles like the GT and Focus RS even though the real profit is in trucks and SUVs. Whether you own an F-150 or not, it’s definitely a great time to be a Ford fan.

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