Ford F -5.47%
Motor Co. is taking the unusual step of cutting customer orders for the Maverick, a more affordable pickup it launched last fall, saying it’s reached the maximum it can build.
The move is a sign that U.S. buyers are hungry for more affordable options as prices for new cars and trucks hit new highs and availability remains limited on dealer lots.
Ford told dealers on Monday it was suspending customer orders for the Maverick pickup truck as it was already working to fill a backlog. The company will resume orders for the 2023 Maverick this summer, it said in a note to dealers, reviewed by The Wall Street Journal.
“We didn’t want to take more orders than we could build,” Ford Trucks general manager Dean Stoneley said in an interview. “We’re getting customers who might have bought a used car and are now buying the Maverick because it’s so affordable,” he said.
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The strong reception for the Maverick – which starts at around $20,000 – comes as car prices skyrocket and automakers offer fewer entry-level choices, dealers and analysts said.
New car prices had been outpacing inflation for several years even before pandemic-related supply chain disruptions caused prices to rise sharply. Last year, the average price paid by consumers for a new vehicle jumped 13% to a record $40,457, according to research firm JD Power.
Now, with low dealer inventory due to an ongoing shortage of computer chips creating a seller’s market, buyers are finding it harder than ever to afford new wheels, according to the data.
Dealers have struggled to keep vehicles of any type in stock due to chip shortages, which have held back production for the past year. Ford dealerships say the Mavericks arriving on their lots are already reserved for customers who pre-ordered them.
Halting customer orders is unusual, said Chris Lemley, president of Sentry Auto Group, a Boston-area Ford-Lincoln-Mazda dealership. “But it is appropriate in the circumstances to avoid customer disappointment.”
Most Mavericks sell in the mid to high $20,000 range, Lemley said. “We desperately needed something in this price range,” he said.
Ford launched the Maverick last year as a more manageable alternative to the big pickups that now dominate the US market. The truck attracted many first-time truck buyers who moved away from sedans or small SUVs, dealers said.
Ford decided in 2018 to eliminate cars from its lineup that had long served as entry points for new-car buyers, including the money-losing Fiesta and Focus, executives said.
Ford’s decision to drop entry-level cars frustrated many dealers, who said it left them with few options to offer buyers for less than $30,000.
Other automakers have also followed suit in recent years, dropping small cars and budget sedans from their showrooms and adding more expensive trucks and SUVs to boost profit margins.
There are five nameplates in the United States today with an average price of $20,000 or less, up from 19 a decade ago, research firm Cox Automotive said.
The affordability of new vehicles hit an all-time low in December, according to an index from Cox Automotive and Moody’s Analytics. The number of weeks of income needed to buy a new vehicle reached 43 on average in December, the companies said. The index hovered between 32 and 36 weeks for almost a decade before starting to rise sharply in 2020.
The average monthly payment for a new vehicle also rose, up nearly 20% in December from a year earlier, to a record $688, Cox estimates.
Stoneley declined to say whether the Mexico-built Maverick is profitable, but said Ford is able to cut costs because the truck is built with many common parts from other models, including the Escape and Bronco SUVs. Sport.
He added that customers can still buy Mavericks from dealer lots and that Ford will ship trucks to dealers in the coming months in a bid to replenish inventory, but customer orders will be put on hold until the summer. .
Because the Maverick is a new entry that’s smaller and less expensive than other pickups on the market, it’s been difficult for Ford to forecast demand, Stoneley said.
JD Power expects Ford to sell at least 80,000 Mavericks in the United States this year. Research firm AutoPacific predicts around 95,000 sales this year and 120,000 in 2023.
Over the past two years, Ford has introduced several new, well-received models after letting its lineup become obsolete, dealers and analysts said.
Buzz around new entries such as the Bronco, the off-roader that recently returned after a quarter-century hiatus, and especially electrics such as the Mustang Mach-E SUV and upcoming F-150 Lightning pickup truck have helped push Ford’s stock to a 20-year high.
Chris Goeschel, an executive at a Ford dealership in Las Vegas, said he’s seen strong demand from local business owners, including electricians or pool maintenance companies, for around 20 Maverick models. $000.
“It has a lot more utility than people expect at this price range,” he said.
Write to Mike Colias at [email protected]
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