Mark Fields, Ford's newly appointed chief operating officer effective Dec. 1, says there is pent-up demand in the U.S. market, and along with a few other key economic indicators, this could be good news for upcoming full-size pickup-truck sales.
Fields told analysts that as new-car buyers move to smaller and smaller vehicles, Ford's profits will shrink as well, Automotive News reports. With new Ford vehicles like the Fusion, Escape and Fiesta, all of which are smaller and more fuel efficient. Ford's profits in the third quarter were at 12 percent range; however, with the economy shrinking, fuel-efficient car volumes increasing, and vehicle sizes getting smaller (and the resulting overall profits), the overall company margins are likely to fall to 8 to 10 percent in the near future. As consumers trade down to smaller vehicles, Ford and other manufacturers will need to get more efficient and smarter about how to keep the company growing.
But there is optimism on the horizon. Fields also told the audience there seems to be some pent-up demand in the full-size truck market, traditionally where Ford sees its highest profit margins. As new-housing construction starts to climb and construction companies begin to get comfortable with the new economic climate, investments are likely to get made — and that means full-size pickup truck sales.
Also, Fields makes reference to the fact that more than half of all pickup trucks on the road today are more than 10 years old; 27 percent are over 15 years old, and 13 percent are over 20 years old — numbers higher than they've seen for a very long time. That also means pent-up demand. If you add to this the popularity of the 3.5-liter twin-turbo EcoBoost engine and the push by the current administration to promote greater fuel-economy numbers with every new vehicle sold in the U.S., Ford could definitely be in the right place at the right time whether fuel prices go up or even down.
We don't know if these specific pieces of data will add up to increased pickup sales or if the segment is more likely to flat-line--either way Ford looks well positioned. For now, all we know is Fields is trying to manage analysts' expectations so they don't expect too much in the coming months. As for us, we want to see if the folks at Ford will have a new (or added) answer for either the 2013 Ram 1500 or coming 2014 Chevy Silverado. We'd guess they do.