Ford Begins Production of New Small Pickup Truck in Mexico
Ford Begins Production of New Small Pickup Truck in Mexico
(Bloomberg) -- Ford Motor Co., seeking to offer more affordable models to young buyers, has begun production of a small pickup truck in Mexico that could be coming to the U.S.
The automaker built 21 copies in February of a model it identified as “C-Pick Up” at its factory in Hermosillo, where it also builds its new Bronco Sport compact sport utility vehicle. The disclosure was made in a monthly production report for investors. C in Ford’s model nomenclature stands for compact.
The model is expected to be a pickup that is smaller in size and lower in price than Ford’s Ranger midsize truck and its best-selling F-150. Automotive-enthusiast media outlets have long speculated that Ford would field a compact pickup in the U.S. under the name Maverick. The move would fit with new Chief Executive Officer Jim Farley’s pledge to produce more affordable models for younger buyers.
“We have some extremely affordable products coming in North America that will help us grow profitably,” Farley said in October on the company’s third-quarter earnings call with analysts.
Pickups have become a hot segment as they’ve moved beyond the hard-hat crowd to appeal to adventure seekers hauling gear and people. But as trucks became more plush, with luxurious interiors and elaborate four-wheel-drive systems, prices skyrocketed. The average price of a full-size pickup topped $52,000 in January, while midsize trucks averaged almost $38,000, according to researcher Cox Automotive.
“Trucks are incredibly popular and yet they are very pricey,” said Michelle Krebs, executive analyst for Autotrader, a unit of Cox. “There’s a lot of desire for pickups, but the prices are just too much for some people.”
Ford is likely to offer its new compact truck starting in the low $20,000s to keep it below the Ranger, which has a base price of $24,820. That would put it in a part of the market with fewer competitors. Just 24% of all model offerings in the U.S. are now below $30,000, down from 54% in 2012, Krebs said.
“The average transaction price of new models hit $40,000 last year,” Krebs said. “That has knocked out a huge segment of American society that can’t even think about buying a new vehicle.”
While compact pickups mostly exited the U.S. years ago in favor of bigger and more richly appointed trucks, they remain a staple of international markets with such models as the Fiat Toro, Renault Duster Oroch and Suzuki Carry. A smaller truck is more maneuverable in tight spaces found overseas, but also could appeal to U.S. city dwellers, Krebs said.
Ford declined to comment Thursday beyond what it disclosed in its production report. CNBC reported the pickup production earlier.
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