Buyer’s Thirst For Fancy Trucks Boosts Ford’s Profits
Ford Customers Are Demanding More Technology and Extra Luxury in Pickup Trucks
Many people complain about the cost of new trucks these days, but that’s not stopping them from buying high-end models with large price tags. A whopping 65 percent of Ford Super Duty buyers in 2016 opted for range-topping packages like the King Ranch and Platinum. The shift in buyer preference led to Ford’s second highest operating profit in company history. That, despite a drop in pre-tax profits.
According to Ford Chief Executive Officer Mark Fields, and as reported by Forbes, the increase in sales of high-end vehicles added $2.4 billion to Ford’s profits in 2016. So even though the automaker cut factory production and increased incentives to move stagnant inventory last year, they had no issues selling high dollar, high profit vehicles.
The shift in consumer acceptance toward fancy trucks isn’t relegated to the U.S., either. Consumers in Asia and Europe are buying more fully loaded SUVs and crossovers than ever, leading to huge profit gains. That’s on top of the $9,000 average import premiums such vehicles already feature over passenger cars. Roughly 30 percent of Explorer buyers opted for the Sport or Platinum model last year. In addition, around one-third of Escape buyers chose the top of the line Titanium trim.
Obviously, Ford plans to capitalize on this trend toward high dollar trucks and SUVs fully. Why wouldn’t they?
“This really reflects a very deliberate and successful strategy to strengthen our brands and enrich the mix of our vehicles by essentially focusing on the higher margin segments where consumer interest is particularly strong,” Fields told the media. “And I can assure you that this will continue to be an area of focus for us and an opportunity for us as we go forward.”