Cars and Drivers

Ford F-150 Faces Huge Sales Challenge

There is pent-up demand for the radically new Ford Motor Co. (NYSE: F) F-150, according to the number two car company. That demand will be satisfied now that enough production has come online. After weak sales for the first four months of the year, the Ford flagship’s sales should take off in May and for the balance of the year.

The F-Series, of which the F-150 is the primary model, has unit sales that make it the best-selling vehicle in America. Sales of the pickup are also about 20% of Ford’s total. The importance of the new model cannot be overestimated.

Sales of the F-Series have only risen 1.4% over the course of the first four months of the year to 240,139. Sales of its primary rival, General Motors Co.’s (NYSE: GM) Chevy Silverado, moved up 14.7% for the January to April period to 172,672. Sales of Fiat Chrysler Automotive N.V.’s (NYSE: FCAU) Ram have moved higher by 4.4% to 139,432. Taken as a group, these are the three best-selling vehicles in the United States. America is pickup country.

Ford has taken the gamble that lighter pickups will ignite sales. The F-150 has dropped its weight by about 700 pounds due to the use of aluminum alloy. One of the primary advantages in Ford’s appeal to shoppers is that less weight means better gas mileage. With gas prices that collapsed earlier this year and have recently spiked higher, the fuel economy value of the F-150 will not be measurable until the prices settle.

Among Ford’s primary benefits with the launch of the latest version of the F-150 is brand loyalty. The truck has been sold to millions more people than its rivals have over the past decade. If those people come back to Ford for their new pickups, it will be to some extent because they have been happy with their earlier choices.

ALSO READ: Ford Tops Auto Brands in New Survey

If sales of the F-150 begin to move sharply higher for the balance of the year, Ford will be able to say that its experiment has not dented demand, and its gamble will have been a brilliant one.

Ford’s stock price is also at stake. Against a 52-week high of $18.12, it trades at $15.17 — at a time when the markets are at all-time highs. So far this year, the price has dropped 2%, against a 2% increase for GM. Ford also has to contend with a surging Toyota, which sells almost as many cars in the United States as it does. Ford is barely a factor in Europe, where Volkswagen dominates the markets. In China, it also lags behind GM and VW. As the world’s largest car market, competition there is particularly ruthless.

Some investors believe that with the retirement of widely admired Alan Mulally, Ford has lost its guiding light. His track record of product innovation and financial management has not been matched by any car CEO since Lee Iacocca, former president of Ford, father of the Mustang, and the man who turned around Chrysler.

The year 2015 is the one in which Ford will prove whether it can compete with the world’s Big Three manufacturers: GM, Volkswagen and Toyota. Without a strong F-150, that will not happen.

ALSO READ: Volkswagen Sales Expected to Beat Industry in May

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