Ford F -1.26% Motor Co. is taking the weird step of reducing off buyer orders for the Maverick, a more-affordable pickup that it rolled out final fall, saying it has maxed out on what it could possibly construct.
The transfer is an indication that American customers are hungry for more-affordable choices as costs for brand new vehicles and vehicles hit new information and availability stays constrained on dealership heaps.
Ford informed sellers Monday that it’s suspending buyer orders for the Maverick pickup truck as a result of it’s already straining to fill a backlog. The corporate will resume taking orders for the 2023 Maverick in the summertime, it stated in a memo to sellers, reviewed by The Wall Road Journal.
“We didn’t wish to take extra orders than we may construct,” stated Dean Stoneley, basic supervisor of Ford vehicles, in an interview. “We’re getting clients who would have maybe purchased a used automobile and at the moment are shopping for the Maverick as a result of it’s so inexpensive,” he stated.
SHARE YOUR THOUGHTS
What was your expertise in making an attempt to purchase a brand new automobile in 2021? Be part of the dialog beneath.
The sturdy reception for the Maverick—which begins at about $20,000—comes as automobile costs soar and auto makers provide fewer entry-level decisions, sellers and analysts stated.
New-car costs had been outpacing inflation for a number of years even earlier than pandemic-related supply-chain disruptions despatched costs sharply larger. Final 12 months, the common value shoppers paid for a brand new automobile jumped 13%, to a report $40,457, based on analysis agency J.D. Energy.
Now, with skinny vendor stock from a nagging computer-chip scarcity making a vendor’s market, customers are struggling greater than ever to afford new wheels, information present.
Sellers have had hassle protecting automobiles of any sort in inventory due to the chip scarcity, which has crimped manufacturing for the previous 12 months. Ford sellers say the Mavericks that arrive on their heaps already are earmarked for purchasers who preordered them.
Shutting off buyer orders is uncommon, stated Chris Lemley, president of Sentry Auto Group, a Boston-area Ford-Lincoln-Mazda dealership. “Nevertheless it’s applicable beneath the circumstances to keep away from buyer disappointment.”
Most Mavericks are promoting within the mid- to high-$20,000 vary, Mr. Lemley stated. “We desperately wanted one thing in that value vary,” he stated.
Ford rolled out the Maverick final 12 months as a more-manageable various to the large pickups that now dominate the U.S. market. The truck has drawn many first-time truck patrons who migrated from sedans or small SUVs, sellers stated.
Ford in 2018 determined to eradicate from its lineup the vehicles that had lengthy served as entry factors for brand new automobile patrons, together with the Fiesta and Focus, which have been cash losers, executives have stated.
Ford’s transfer to ditch entry-level vehicles pissed off many sellers, who stated it left them few choices to supply customers for lower than $30,000.
Different automobile firms have additionally adopted swimsuit in recent times, jettisoning funds small vehicles and hatchbacks from their showrooms and including extra higher-priced vehicles and SUVs to fatten revenue margins.
There are 5 nameplates within the U.S. right this moment with a mean sticker value of $20,000 or much less, down from 19 a decade in the past, analysis agency Cox Automotive stated.
Affordability of recent automobiles hit a historic low in December, based on an index from Cox Automotive and Moody’s Analytics. The variety of weeks of revenue wanted to buy a brand new automobile hit 43 on common in December, the companies stated. The index ranged between 32 and 36 weeks for almost a decade earlier than it started rising sharply in 2020.
The common month-to-month fee for a brand new automobile additionally has climbed, up almost 20% in December from a 12 months earlier, to a report $688, Cox estimates.
Mr. Stoneley declined to say whether or not the Mexico-built Maverick is worthwhile however stated Ford is ready to cut back prices as a result of the truck is constructed with many widespread elements from different fashions, together with the Escape and Bronco Sport SUVs.
He added that clients can nonetheless purchase Mavericks off vendor heaps and that Ford will ship some vehicles to sellers in coming months in an effort to replenish shares, however buyer orders might be suspended till summer season.
As a result of the Maverick is a brand new entry that’s smaller and cheaper than different pickups out there, it has been troublesome for Ford to forecast demand, Mr. Stoneley stated.
J.D. Energy expects Ford to promote a minimum of 80,000 Mavericks within the U.S. this 12 months. Analysis agency AutoPacific forecasts about 95,000 in gross sales this 12 months and 120,000 in 2023.
Prior to now two years, Ford has launched a number of well-received new fashions, after permitting its lineup to get stale, sellers and analysts have stated.
Buzz round new entries such because the Bronco, the off-roader that just lately returned after a quarter-century hiatus, and particularly electrics such because the Mustang Mach-E SUV and the forthcoming F-150 Lightning pickup truck has helped drive Ford shares to a 20-year excessive.
Chris Goeschel, an govt at a Las Vegas Ford dealership, stated he has seen sturdy demand from native enterprise homeowners, together with electricians or pool-maintenance firms, for Maverick fashions within the mid-$20,000s.
“It’s obtained much more utility than folks have come to count on in that value vary,” he stated.
Write to Mike Colias at Mike.Colias@wsj.com
Copyright ©2022 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8