Fords Bottom Line Rides on Profitability of New F-Series

Tuesday marked the first day of production of the all-new 2004 F-150 pickup in Norfolk, VA, easily the most important vehicle in the beleaguered 100 year old companys lineup.

Fords F-Series, the top-selling new vehicle in the U.S. for more than twenty years, is responsible for more than half of Fords profits, according to Wall Street analysts in a Reuters report.

“This is a make-or-break for Ford. This is without a doubt the most crucial product that theyve got coming in the last five years and going forward for the next five years,” said independent automotive consultant MaryAnn Keller. “This has to succeed; they have to make it work.”

With the competition getting tougher every year its not only important for Ford to improve on its outgoing F-Series, but raise the bar in the entire segment. To do so Ford has reportedly spent in the neighborhood of $1,000 more per vehicle, getting it right.

It is larger and much better overall than the 2003 truck, improving interior quality to luxury SUV standards. Exterior styling is evolutionary, which is probably smart as Ford pickup customers have proven with their pocketbooks that they like the current look.

But Ford needs to gain market share and not just merely maintain its current 800,000 unit per year volume, if it expects to make up the loss in profits due to the increase in build costs. If Ford increases the F-Series MSRP to make up for the difference it could lose its price edge in the market, exacerbating to the problem. And how do customer incentives fit into the picture? They almost always erode profits further.

Taking part in Tuesdays launch event Ford Motor CEO Bill Ford is all too aware of how important this new truck, what he called “the most successful vehicle in the history of automobiles,” is to his companys bottom line.

Ford mentioned, “In the last 50 years, nothing has been more essential to our success, or more important to us, then the F series.”

Just when the new F-150 is more important to Fords success than ever before, Nissan will introduce not one, but two all-new competing full-size pickup models, the Titan King Cab and Titan Crew Cab. While the Japanese company isnt expected to dig much of a hole into Big 3 sacred ground, it could be the speed bump on the road to the blue ovals profitability.