The launch of the 2015 Ford F-150 is "going well," insists President of the Americas Joe Hinrichs.
With the formal sales launch of Ford’s new, aluminum-bodied F-150 pickup approaching fast, there are new concerns being raised about the ground-breaking project and its potential impact on the maker if the market’s best-selling truck runs into unexpected glitches.
A new report from Morgan Stanley echoes worries raised by other analysts who question whether Ford will get the 2015 F-150 right immediately out of the box. Morgan Stanley’s summary cautions there could be a “near-term negative surprise.”
But don’t tell that to Joe Hinrichs, Ford’s President of the America, who contends “the launch is going well, adding that, “Everything is on schedule and everything is going as planned.” Hinrichs dismissed the new report during a meeting with reporters at Ford’s Product Development Center in Dearborn, Michigan on Tuesday, adding that, “I’m very confident in this vehicle.”
Ford's aluminum-bodied F-150 has some critics watching the debut of the best-selling truck closely.
Few vehicles are more important to a manufacturer than the F-Series which has been not only the best-selling pickup but also the top-selling vehicle overall in the U.S. market for the past three decades. And it generates some of the highest margins outside of the luxury car segment.
And that has only contributed to the concerns about the 2015 re-make of the F-150 which will migrate from a traditional steel body to one made of lightweight aluminum. The switch is expected to yield significant fuel economy advantages, critical to Ford as it struggles to meet the 54.5 mile per gallon Corporate Average Fuel Economy mandate that will go into effect in 2025.
Ford officials have confidently predicted that other large truck makers will have to follow to meet the CAFE target, a position echoed by a study released by the trade group the Aluminum Association earlier this month. It forecast 75% of all pickups will switch to aluminum over the next decade.
That confident prediction has been challenged by steel’s backers – and Ford’s competitors have yet to commit to a similar strategy, perhaps in part waiting to see how the launch of the 2015 F-150 goes.
“We see scope for near-term negative surprise with the changeover,” Ravi Shanker, a Morgan Stanley analyst warned the new study. “Expect a slow changeover, with tight supply.”
The start-up of production is lightly to be slow as Ford works to ensure the quality of the new truck, Morgan Stanley warned, adding that a short supply of the new pickups could stretch “well into 2015.”
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The report also cautions that Ford will likely have to use attractive pricing to lure in nervous buyers who aren’t sure about the balance between the potential benefits and the possible problems of migrating to aluminum. And that, said Shanker and his colleagues, would reduce Ford’s margins.
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Ford has acknowledged that the changeover will impact total production, estimating it could lose as many as 90,000 trucks during the retooling effort. The maker, however, sees little risk in terms of near-term profits, though and on Tuesday noted it is on target to deliver a strong margin in the range of 8% to 9% this year.
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Moran Stanley also warned that Ford may not be able to conquest many loyalists from key competitors like Chevrolet or Chrysler’s Ram brand. But Ford insiders say that with the recent rebound of the pickup truck market, even returning F-Series owners will keep their plants running at full speed.
“We believe we’re ready,” concluded Ford’s Hinrichs.