||The Pickup Wars: Ford Under Siege
The autumn pickup wars have been joined, with Ford aggressively defending its segment leadership against redesigned rivals from General Motors and Chrysler Group's Ram brand.
Ford's F series continues to lead full-sized pickups with 39.4 percent of the market through August, compared to 35.1 percent for GM and 17.9 percent for Ram. There's a lot at stake as football season starts and truckmakers roll out promotional campaigns.
"Ford will defend that turf," said Tom Libby, analyst for Polk. "If they can't defend it with the product, they'll defend it with incentives. The benefits to them of having the most popular vehicle in the country are huge. For the next several months they'll be in a defensive situation. They now have the oldest product in the segment, so for the next 10 months they'll have to defend it with other means."
Ford won't begin making its 2014 models until late October or early November. Ford is expected to launch the next-generation F-series pickup as a 2015 model in the second half of 2014. Ram introduced its new 1500 in the last quarter of 2012, while the 2014 Chevrolet Silverado and GMC Sierra began hitting the market this summer.
Said Jessica Caldwell, an analyst at Edmunds.com: "The truck market is seeing release of a lot of pent-up demand. GM has had better luck launching a new product while that is happening. But Ford has a lot of loyalty."
Edmunds.com incentive numbers show that Chevrolet and Ram, despite having 2014 models in their mix, spent more than Ford in average incentives per vehicle in August. Though Chevrolet spent more than Ford, Chevrolet was selling down 2013 models in August and now has a higher percentage of 2014s in the market.
Incentives are higher in Texas, the nation's top truck battleground, accounting for 1 in 6 pickups sold nationally.
Rox Covert, who owns two Chevy stores near Austin, Texas, says Ford and Ram have gotten more aggressive with incentives to blunt GM's pickup launches. He has seen some Ford dealers advertise $12,000 in savings on the F-150.
"When a customer comes in to see you, that's in the back of their mind," he says.
Chevy and GMC dealers have been able to counter the steep discounts with their own heavy incentives on the 2013 pickups, while selling the full-priced 2014 models to early adopters. But with many stores running out of '13 models, dealers will be looking for incentives on the new truck, Covert says.
Mitchell Dale, owner of McRee Ford in Dickinson, Texas, near Houston, says: "Over the last 60 days, F-series incentives have been at or higher than levels we've seen in the last year or so. You've got over $9,000 if you take all the discount packages and special bonus packages on the XLT. Both Chevrolet and Ford are advertising $9,000. It's a good time to buy no matter what the brand."
Doug Scott, Ford's truck marketing manager, said Ford can afford to pay higher incentives because its 2014 models won't go on sale until the fourth quarter.
"We have an advantage in that we have a later changeover. The Silverado and Sierra are '14 models. That is becoming a more predominant part of their mix. Ram has already transitioned. Our transition is later. We don't start building the 2014 F-150s until the end of October or early November. As a consequence we're selling '13s while the other guy's selling '14s. That gives somewhat of an advantage because incentives are going to be higher on '13s than on '14s."
In addition to incentives, Ford is bolstering its 2014 lineup with new variations, including an upscale Tremor sport truck and an STX Crew Cab aimed at value-conscious buyers. Ford is aiming at buyers in the under-$30,000 sticker range to augment its leadership in high-end trucks above $40,000, Scott said.
Rivals aren't sitting still. Dave Elshoff, spokesman for Ram, said: "We're leading with product strategy. The answer is diesel. It's an absolute game-changer in the half-ton market."
Ram will introduce a 3.0-liter, six-cylinder diesel in the 2014 Ram around the first of next year, giving Ram a powertrain option its light-duty competitors don't have.
"The track record of the Ram brand since it was created in 2009 is to gain about 8 points of share. That's share we've earned from our competitors."
Chevrolet has gotten a boost from positive reviews of the new Silverado, a pickup that initially was criticized as too conservatively styled when it was first shown early this year. In a test pitting the market's newest entrants against each other, Consumer Reports magazine recently gave the Silverado a slight edge over the Ram in a test of the market's two latest entrants.
The F-150 wasn't tested, but the magazine noted a next-generation model is coming in 2015.
Polk's Libby said the Detroit 3 continue to reap benefits from their pickup dominance as pickup sales outpace the market.
"If you're able to compete in this full-sized segment, it's a huge benefit in terms of market share and profitability. Those who aren't participating aren't benefitting from the growth in the segment. It (the segment) is so tempting because of the volume and profitability. This is an ongoing strength of GM, Ford and Fiat-Chrysler. While there are Asians in the segment, their share is very low."
(Source: Automotive News, 09/23/13)
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