Ford has also been working to increase average transaction prices by adding features and options packages that make buyers want to spend more. That strategy has been especially apparent on the F-Series, where Ford Motor Company (NYSE:F) has introduced more upscale packages in recent years. And it’s paying off with much-improved profit margins for Ford in North America.
Trends are moving in Ford’s direction
Consider this: Ford’s F-150 starts at $23,955 – but in top-of-the-line, limited trim, like the red truck shown above, the price tag is well north of $50,000. A lot of that difference is profit for Ford.
Analysts at Edmunds say that transaction prices for full-sized pickups have risen by 29% since 2005, while overall transaction prices for the industry as a whole have risen about 13%. A lot of that has to do with those extra options packages, a strategy that has been picked up (so to speak) by General Motors Company (NYSE:GM) and Chrysler as well.
A Ford Motor Company (NYSE:F) official was quoted by Automotive News recently as saying 30% of F-150 retail sales and more than half of Super Duty sales are “high series” versions like the Limited and King Ranch editions. Ford’s strategy of encouraging buyers to pay more for more features appears to be working out well.
That success has been a big contributor to Ford’s recent profits – and the trends favoring pickup sales should help Ford post more good numbers in coming quarters.
The article Ford’s Hot F-150 Sales Look Set to Continue originally appeared on Fool.com.
Fool contributor John Rosevear owns shares of Ford and General Motors Company (NYSE:GM). The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford Motor Company (NYSE:F).
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