One of the most closely watched automotive introductions of recent years is set to unfold as Ford Motor Co. (f) retail dealers begin placing orders for the aluminum-body F Series pickup trucks, scheduled to arrive before year’s end.
This week Ford told dealers the retail price of the new truck will increase from $360 for entry-level models up to $3,615 for high-line luxury versions. The base model 2015 XL F-150 starts at $26,615, up $395 or 1.5% while the top-end Platinum version starts at $52,155, up $3,055, or 6.2%.
Ford is taking a big gamble on aluminum. The new trucks will be up to 700 pounds lighter to improve fuel efficiency, relying on customers’ acceptance that the metal will prove every bit as durable as steel. Ford is sailing into uncharted waters with regard to the manufacturing process, since no automaker has ever fabricated aluminum vehicle bodies at high speed.
Collision shops and dealerships have had to buy new tools and undergo training to gain expertise in repairing aluminum.
Ford so far hasn’t released fuel efficiency figures, which means that the potential savings are unclear. If the numbers are dramatic, they could attract buyers – especially those who use pickups for commercial purposes – providing an advantage for Ford over Fiat Chrysler’s Ram pickups or Chevrolet and GMC models from General Motors (gm).
The F Series pickup is Ford’s top-selling and single most important vehicle, providing disproportionate profit that compensates for small cars and other models that struggle to earn their keep. The income statements of GM and Fiat Chrysler likewise are heavily dependent on the success of their pickups.
Brian Johnson, automotive analyst for Barclays, said that Ford’s price increase is a signal that it intends to open its pricing lead over GM and Fiat Chrysler to $3,000 to $4,000 per unit. Recently, that gap has fallen to $1,000 as Ford raised financial incentives on its outgoing model.
Earlier this month, Ford said its profits will come under pressure in the current and fourth quarters of 2014, as plants are retooled to build new models. They include the Dearborn, Mich., and Kansas City, Mo., plants, where the F Series trucks are assembled. The idling of those two weeks will cost Ford 13 weeks worth of production during the changeover to the new aluminum pickup.
Mike Levine, a Ford spokesman, said the price increase on the new pickups reflects additional features, such as telescoping steering wheels, screens for digital information and additional speakers for the sound system.
“This is not a gamble, it’s an investment,” Levine said. “Our team has been researching and working on this truck since 2009. From materials team to manufacturing team, we have three decades of experience working with aluminum.” He noted that the a version of the Mercury Sable was manufactured with an aluminum body, as were some Jaguar and Land Rover models when those two brands belonged to Ford.
Ford took the massive step of adopting a new metal and manufacturing with its eyes wide open. The risks likely are well understood and hedged wherever possible. If the automaker is right, the pressure could be intense for rivals to consider all sorts of aluminum vehicles.