Innovation, Technology Drive Pickup Sales

SKV_4912 II

By Tim Esterdahl

When New Orleans swimming pool contractor Terry Lonatro was shopping for a new pickup truck, he wanted better gas mileage than his 2007 Toyota Tundra provided. But, despite what Wall Street analysts say, fuel economy wasn't the biggest factor for Lonatro. Innovations and technology were the bigger selling factors.

Lonatro is part of the changing demographic within work pickup buyers. In the past, these buyers leaned toward cheap regular-cab models with base interiors; today, truck owners' needs are changing.

Lonatro puts 2,000 to 2,500 miles a month on his truck, so it seems that fuel economy would be a top priority for him. Instead, Lonatro put a premium on innovations, technology and comfort because he spends a lot of time in his truck. That's why Lonatro opted for the Ford F-150 King Ranch model — one of the pickup's higher trim levels — equipped with a 3.5-liter V-6 EcoBoost engine.

"I think truck buyers are interested in gas prices," Lonatro said. "They want something that has some fuel economy, but when you drive in a truck, I don't think that is the biggest deciding factor. It is one of them, but it is not the biggest."

Wall Street Bets Against F-150

While fuel economy wasn't a big factor for Lonatro, apparently Wall Street thinks it should be. In mid-December 2014, Ford's stock fell to its lowest point in five weeks, putting off it 7.5 percent for the year at that time. Overall, the market was trending at 7.6 percent higher. During that same time period Deutsche Bank AG downgraded the automaker from a buy to hold, which contributed to Ford's stock market decline. The thinking was with U.S. gasoline prices trending at a five-year low, consumers may not be motivated to buy the newer fuel-efficient model.

"Ford's new 2015 F-150, which incorporates a number of advanced but costly powertrain, light-weighting and safety technologies, represents one of the most prominent early examples of this forthcoming change," wrote Rod Lache, an analyst at Deutsche Bank in New York, in a statement. "We question whether consumers will pay the price for this content with $2-$3 gas."

There is some validity to this statement since at the time he made it in December, gas had fallen 31 percent since April and was at its lowest level since Oct. 16, 2009, according to the AAA motor club. The low gas prices raised concerns about Ford's long-term plan.

"Ford's product strategy, set 3 or 4 years ago, likely contemplated a somewhat different market dynamic vis a vis energy costs," Lache wrote in a statement.

Gas prices have begun to rise a little — on Feb. 4 the national average was $2.11. This may help change Wall Street's opinion of Ford's plan. However, nobody seems to know for sure if gas prices will return to the high annual national averages of years' past: $2.78 in 2010, $3.51 in 2011, $3.60 in 2012, $3.49 in 2013 and $3.34 in 2014.

Adage About Fuel Prices Doesn't Hold

The problem with saying truck sales revolve around fuel prices just doesn't add up anymore. In late 2014 and early 2015 steadily dropping gas prices did not trigger a significant surge in truck buying.

In fact, many analysts and industry executives say SUV and pickup sales were rising before fuel prices fell; cheaper gas could sustain the trend into 2015, according to Reuters.

The data backs this up, Reuters reported. In October 2014, Ford SUV and trucks accounted for 72 percent of Ford's sales, up from 68.5 percent a year before. Chrysler also noticed a surge of 22 percent driven by Ram pickups and Jeep SUVs.

Truck Needs Are Changing

The reality is there are now many pieces to the truck-buying decision. For example, the new F-150 has better payload and towing numbers than the previous model, and this used to be the benchmark that all trucks were measured by. Today, customers' needs have greatly changed. No longer are towing and payload the deciding factor. Neither is fuel economy. What is driving the market? Luxury interiors and innovation.

Today's luxury pickups, often referred to as Cowboy Cadillacs, are a driving force for every pickup manufacturer. New features and upgraded trim levels equal big money. A December 2014 report released by automotive website TrueCar.com shows 25 percent of Ford's F-Series truck sales are for pickups stickering at $50,000 and more. These sales will represent $10.8 billion in revenue for the truckmaker.

While these higher-end packages may earn the disdain of old-school truck buyers, it is clear people are buying them — people like Lonatro, who spent more than $50,000 on his new King Ranch.

"This year's 2015 Ford F-150 is a quantum leap in technology above the others," Lonatro said. "When I saw they had changed to military-grade aluminum and it offered many of the technological advancements of the upper-end performance imports, that tweaked my interest. If I am going to pay $50,000-plus for a new truck, I want technology, innovation and a proven product."

The truck's weight drop, the available 360-degree camera, LED lights and a host of other new features also caught Lonatro's attention. He made a special trip in January to the North American International Auto Show in Detroit to check it out. Looking it over, he was thoroughly impressed with the truck and the aluminum.

"What impresses me about the aluminum is the overall weight factor," Lonatro said. "You can take the weight out without losing any of the strength — that's the most important thing."

He also looked at all the other trucks on the market and none of them had the wow factor the new F-150 has.

"Once this F-150 [hits all dealers' lots] I think the other manufacturers are going to see a big decrease in the sales," Lonatro said. "This thing is going to be a big deal."

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Comments

How much does the Eco diesel add to the cost of the ram???? Aluminum ford said adds around $300. It got them sbout 10% economy gain on the 3.5 ecoboost

I think this article misses the boat about what caused the drop in stock price in 2014. I think there are two major factors.

1. Uncertainty about how the aluminum body will be accepted.
2. Knowledge that there was a high cost for plant retooling.
3. Awareness that plant shutdowns for retooling meant lower overall production and thus lower profits for the year.

I think the first and third points are the biggest factors in the stock price drop.

One thing also AL

Ford is adding workers to there sterling axle plant. They make the same old axles that haven't changes. If they were having massive production issues they wouldn't be needing more workers to build axles.

As far as 10,000 f150's sold last month... It takes 4-5 weeks to get a truck from the factory to the lot. My raptor was built and sat in the Dearborn lot for 3 weeks before being loaded out and stuck on a train/truck which took 1.5 weeks to make it to the dealer 1000 miles away from the factory.

Next month they will sell more 2015 as more will be on the lot. Over the next few months 2015 will make up 100% of the trucks sold. Then next December ford will have sold more f series in the previous year.

At that point the aluminum super duty will hopefully be coming out so there is more aluminum for the haters to hate on.

Pneumatic tires were hated on when they first came out as well, just like aluminum body panels are hated on.

Now you will say aluminum is not a success but how can a 360 hp 3.5 trade wins in comparison test by mags with a huge 6.2 v8. How can 2.7 325 deliver hemi 5.7 395 hp performance???

Why are you worried about gas mileage? I said they would sell big block V8 gas pickups like and I'm right.

Every day people happily pay thousands more to buy a 6.2 GMC engine that costs no more for GM to build than the 5.3 engine.

The V10 and the big V8s would have been much more efficient with a decent tune and a 6 or 8 speed trans, although they'd have been just fine with a legit 4 spd.
------------------------------------
@papa jim,
The take rate on the GM 6.2 would say otherwise. It doesn't sell well as the top engine for the half-tons, nor does it sell well as the base engine for the HDs. 400+ hp in a half-ton... for what? To beat the guy in the next lane to the next traffic light? Chrysler dropped the 4.7L V8 from the Ram 1500 not because of its power, but because of its *mileage* - the 5.7 was rated higher by the EPA, so why offer the smaller V8, when it was weaker AND thirstier?

It *is* about fuel economy today. You can no longer buy a 454-powered Chevy Silverado for the same reason you can no longer buy a 460-powered Ford LTD. Perspectives change.

Big Al

Why is ford adding workers to the axle plant for the f150???? They havent changed there axles?

"Innovation, Technology Drive Pickup Sales"
I guess the title to this article has been interpreted by the Anti Ford crowd as a disturbing reality that their favorite brand did not fit criteria that the title mentions.
So here are some of my favorite ill faded comments that they like to key in on:
Ah, the Ecoboost engine, early comments were the this engine would not sell and that you can't replace displacement. The engine will develop major problems as they age. Fuel economy sucks. Wrong to all of the above, look at how many are ordered in place of the V8, and now a second Ecoboost is offered with even better fuel economy. Now the new thing is if you want power and not fuel economy get the Ecoboost, so at least now they do admit the the engine is quite powerful.The only people complaining about the the fuel economy of the Ecoboost are Silverado and Ram owners.
Remember that all vehicles are subject to CAFE standards that must be met by 2025. I doubt GM and Fiat will keep deactivating more cylinders to increase gas mileage, probably going to do what Ford has already implemented, smaller V6 engines that are turbocharged an lighter materials for body and frame.
Which brings me to the Aluminum body doubters. This is just plain easy, your all wrong about the use of aluminum and as with the engine, time will prove everyone wrong and most vehicles will go to lighter materials, some we may not even be aware of yet. I say God bless Lonatro and his success to afford such a fine truck, maybe if GM, Fiat or even Tundra has a Innovative, State of the Art truck like the new F150 the comments may have been a lot different. Go Ford!

Again.... Can anyone tell me why they would hire 150 extra people at the same old axle plant to build they same old axles that were in last year f150, if nobody wants a 2015 f150's and since Al is claiming they are having major production issues??? Doesn't make sense why they would add more people to increase axle production if they can't build the f150 due to aluminum manufaction issues.

Look it up
Consumer Reports
F-150 5.0 V8 15 MPG
F-150 3.5 EB 16 MPG
F-150 2.7 EB 17 MPG

stop lying about the eco-boost gas mileage !

The 2009-2010 F-150 with the 5.4 V8 GOT BETTER GAS MILEAGE !

blogger if that is the case that there is complaints I will throw this up here to show the durability of aluminum until it gets deleted. Pickup made out of aluminum is going to be solid through out the trucks entire existence. I rarely see 20 year old trucks running around my area. I rarely see old 5.9 cummins, old 7.3 PSD's 20 years ago GM made a 1/2 ton 6.5 diesel and those you never see.

Awesome vid if you got 5 minutes to show the durability of aluminum as it pertains to other motorized equipment other then Pickups.
https://www.youtube.com/watch?v=mmwbj5xmAHo

Right, Consumers Report, I wouldn't buy a pencil based on their anti American agenda. I owned a 5.4 for 8 years the best highway I could get out of it was 14 mpg with a tail wind. I now own a 2011 F150 with 3.5 liter Ecoboost and have reached 24mpg with a tail wind, my average around town is between 18-19 mpg all the time. You are the uninformed liar.

Another reality check. The main thing driving pickups sales today is a bublicious mix of long duration auto loans (7 years), low interest rates, and record high subprime loans.

Most half ton pickups have become suvs with a balcony. Who can blame manufacturers for making these luxury barges if they are making money. Those that want or need a real work truck that is going to get dirty will not buy these trucks--3/4 to 1 ton work trucks serve the purpose of a work truck. Ford would be better off just eliminating the lower trim levels on the F-150 and offer only King Ranch and Platinum. The F-150 is more of a lifestyle vehicle even if it does have capacities of a truck most who buy them will use them as a lifestyle vehicle similar to an Expedition or Navigator.

@Jeff S,
I do believe you are correct regarding the pickup becoming more and more a luxo barge SUV. That what I use mine for.

The US isn't much different than here.

I do see an opportunity for the Euro style of van in a cab chassis version slowly taking the job of many HDs and 1/2 on pickups for all businesses.

They have a footprint the same as a full size and can have a 10 foot plus bed on the back, or come in a crew cab with a eight foot tray.

The Transits below are all work trucks.

http://i.ebayimg.com/00/s/NjAwWDgwMA==/z/~sUAAOSw7NNUBqqO/$_20.JPG

http://images.tradingpost.com.au/T8L3L4XG/1659/KRR6K8-Resized320x240.jpg

http://imganuncios.mitula.net/ford_transit_dual_cab_ute_100491900439424721.jpg

http://www.comtruk.com.au/wp-content/uploads/2013/03/TRANSIT-TAIL-GATE-LOADER-2.jpg

@Tom#3 - you claim to own a 5.0 powered SuperCrew FX4.

What is the truck like in slushy wet conditions?
Any issues?

Do you use the e-locker much?

How does it work in snow and mud?

What are the engagement and disengagement points?

How does it work with traction/stability control?

Does your truck have a backup camera? or bumper sensors?
How are they in poor weather?

Please explain how your tow/haul system works? You did say you had to tow 5k on occasion.

Does your truck have the tailgate step?
Any issues?

Does your truck have the retractable side steps?
Any issues?

Notice anything in relation to your dash lights when the headlights are on?

Are you running the stock tires and at what pressure?

Let's compare notes between your truck and mine (and the rental I had for 9 days).

@Tom#3 -

"I SAID the 2009 and 2010 F-150 with the 5.4 V8 MATCHED with the 6 speed transmission gets BETTER gas mileage than the 3.5 Eco-Boost

Everybody I know with a F-150 4x4 Crew Cab 145" WB with 3.73 rears with the 3.5 Eco-Boost averages 16 MPG

The 2009 and 2010 similar F-150 with the 5.4 is getting 18 MPG"

PROVE IT?

I know a guy getting 25mpg (calculated) out of a SuperCrew Platinum long box max tow EB3.5.
Best I can get is 20.5 mpg out of my 2010 5.4.

Loaded mpg is basically the same as ANY V8.



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