DETROIT – The headlines certainly grabbing attention, up to $10,000 cash back on the new aluminum Ford F-150.
Normally incentives that generous mean a vehicle isn't selling. But that's not the case here.
If this incentive was a lump sum $10,000 rebate, it would signal trouble, but to get the ful discount you need to qualify for a bundle of different rebates. The goal is to encourage buyers to select uplevel models like this XLT.
Automakers are typically over ambitious when they launch a new vehicle and produce too many uplevel models because they are more profitable. While there are cash rebates on all F-150 trim levels, the bigger incentives are on the more expensive vehicles with pricier options.
For instance, in this region, you can get $1000 back for moving up to an XLT crew cab with a chrome or sport package. An uplevel powertrain and Ford credit financing can take you up to $4500. Lease renewals Bonus cash could get you to $7000 in total rebates and dealer cash could take the price even lower.
IHS Automotive Analyst Tom Libby is convinced this doesn't signal trouble for the new truck because it's narrowly aimed at clearing very specific vehicles.
"I don't see this as a reason to be alarmed," said Libby. When re-designed vehicles are launched they carry higher prices with very robust margins. They know they will eventually need to adjust and that's what's happening now."
The aluminum body F-15 was a gamble. Sales were down nearly 9 percent in June. Chevy was closing the sales gap, but Ford says that's because of lower supplies. They are very happy with demand for the new truck.
"If you look at our overall incentive spending, it's down relative to a year ago and our average transaction pricing after incentives is the highest in the segment," said Ford's Mike Levine.
Key dealers say their biggest problem with the truck is that they can't get enough of them. They stress if there was a problem with sales in other parts of the country the company would channel that inventory their way, but and that's not happening.