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Ford Launches New Truck Production As Analysts Grow Concerned Over Profits

June 11, 2003

Reuters reported June 10 that Ford has launched production of its all-new F-150 pickup truck, a product vital to the vehicle maker’s bottom line as it celebrates its centennial while struggling to recover from a profit slump. Reuters also noted that the truck has been the best-selling vehicle in the United States for more than two decades, and Wall Street analysts say it drives more than half of Ford's profits."This is a make-or-break for Ford. This is without a doubt the most crucial product that they've got coming in the last five years and going forward for the next five years," said automotive consultant MaryAnn Keller told Reuters, adding: "This has to succeed, they have to make it work."Reuters added that, while the new version is said to be bigger and better than its predecessor, analysts say it is also at least $1,000 more expensive to build.To compensate for the cost, Reuters said, Ford may boost the sticker price of the F-150 but that could make it difficult to keep selling more than 800,000 of the trucks a year.Unlike in the mid-1990s, the F-150 faces tough competitors from General Motors and Chrysler, along with new offerings due soon from Toyota and Nissan, Reuters said.To differentiate its new truck, Reuters reported that Ford is offering the industry's widest variety of body and trim configurations, with five different F-150 packages featuring three different box lengths and two distinct box styles. All will come with four doors, of one size or another, the news agency added.However, Reuters has reported that analysts say Ford may put incentives on its new pickup, to help spur sales soon after its launch and that could mean it will no longer as profitable as it once was for the company."The bottom line is that even if they sell 800,000 (per year) they're going to make less per unit on them than they did on the current version," Keller told Reuters.
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