Ford Motor: Wait, They're Already Discounting the F-150? - Barron's (blog)
Is Ford boosting F-150 incentives by $10,000. Most likely not. Although we haven’t seen mid-month pricing data yet, the numbers cited in the article probably reflect select marketing campaigns and not a broad reality of F-150 pricing. The other is that maybe there’s something happening here—maybe not $7-10k worth of new incentives—but some uptick in dealer/OEM spend nonetheless. In the past two months, Ford’s wholesale transaction prices have risen >$4k vs. the 2014 FY average, or ~11%. The strong wholesale pricing has occurred as Ford has been building F-150 dealer inventory. Now Ford is nearing levels where a fuller sell-out of the truck can be observed and analyzed. So if incentives were to meaningfully rise in the short term (we’re not saying they are), then perhaps dealers are seeing consumers push back on a $43-44k price point—a price point that after all is somewhat unchartered in the segment and $~4k... We doubt that Ford would be share grabbing in July with inventory still fairly tight. The F-150, while a strong product and one we’re constructive on, is (from an investing standpoint) less of that classic easy comp setup into a product cycle both because of the recent success. Source: blogs.barrons.com
