Ford rushes to build more SUVs

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Ford and Lincoln dealers can’t get enough of their biggest, most expensive SUVs to keep up with customer demand, which is a pretty good problem to have. But it’s a problem nonetheless, one that Ford Motor Co. is addressing with a $25 million investment to speed up the assembly line here.

The automaker planned to announce the upgrade to its Kentucky Truck Plant on Monday, Feb. 12. The investment, on top of $900 million already spent on the plant to launch the 2018 Ford Expedition and Lincoln Navigator, will allow Ford to build 25 percent more of the SUVs this year than originally planned.

“It’s important for this plant to produce more vehicles,” Joe Hinrichs, Ford’s president of global markets, told reporters here. “In this segment, people will pay for a great product. The dealer feedback has been even stronger than we’ve hoped for.”

Retail sales of the vehicles skyrocketed in January, up 59 percent for the Expedition and 132 percent for the Navigator. (Ford attributed a 15 percent decline in total Expedition sales to the timing of fleet orders.)

The highly profitable SUVs are turning on dealer lots almost as fast as they can be unloaded from delivery trucks.

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It had been a decade since the Navigator was fully redesigned, and 20 years since the Expedition got a thorough overhaul.

“Both of the vehicles are doing really well for us,” Ford sales analyst Erich Merkle said. “Because they’re turning so fast, we’re going to do everything we can to meet the demand that’s out there.”

CEO Jim Hackett has banned Ford employees from ordering Navigators or Expeditions for personal use, a source with direct knowledge of the directive told Automotive News. Typically, employees who get vehicles through the company’s manager lease program can have their pick of the lineup, excluding some high-performance models. Restrictions on mainstream vehicles are rare, if not unprecedented, the source said.

The Expedition — starting at $52,890, including shipping — is averaging just 11 days on dealer lots. The average transaction price rose $7,800 in January thanks to a 29 percent mix of the most expensive Platinum trim, which starts at $76,595. That’s double the mix of Platinum models sold of the outgoing SUV, Merkle said.

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Navigator sales are up triple digits in every region of the country, including a 135 percent gain in Ford’s western sales region, which includes California, Merkle said.

Average transaction prices surged in January, up $21,300 over the same month last year. That’s because 84 percent of sales were of the high-end Reserve ($82,400 sticker) and Black Label ($96,650 sticker) trims.

“We could have sold a lot more in January if we had them,” Mark LaNeve, Ford’s vice president for U.S. marketing, sales and service, said on a Feb. 1 conference call.

Kevin Collins, president of Bill Collins Ford-Lincoln in Louisville, said Expeditions and Navigators are sitting at his store for only five or six days before they’re sold.

“Stock is low right now and they’re selling very, very well,” he said. “We hope the days supply will continue at that rate because they’re expensive; a dealer can’t afford to have them sitting around too long.”

Collins said customers have been impressed with both the exterior style changes and the interior technology.

“They’re fine, fine products that we’re really proud of,” he said.

 

Ford rushes to build more SUVs”  originally appeared in Automotive News on 2/12/2018



By Michael Martinez, Automotive News

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