Ford is selling $90,000 Lincoln SUVs faster than it can make them
Ford is straining to keep up with demand for high-end Lincoln Navigators, which the company recently updated.
Khodrocar - Ford is selling the high-end Lincoln Navigator so fast it is having trouble keeping up with demand.
The second-largest U.S. automaker has only been rolling out the 2018 Navigator to dealerships since the end of November, but Ford is already straining to produce enough vehicles, executives said on a conference call Thursday.
Navigator sales form a tiny share of Ford's total — slightly less than 1,300 out of the 161,000 cars the company sold during January. But they were up 97.5 percent over the same month in 2017, even though Ford's overall sales dropped 6.6 percent, and total Lincoln SUV sales fell almost 20 percent.
"We could have sold a lot more in January if we had had them," said Mark LaNeve, vice president of U.S. marketing, sales and service.
Furthermore, 84 percent of Lincoln buyers opted for the two most expensive trim levels, the Reserve and the Black Label. Those packages can bring the price of the SUV up to roughly $90,000 and $100,000, respectively.
The success of the car is largely due to the updated design, Kelley Blue Book analyst Rebecca Lindland told CNBC. This is the first redesign Ford has done on the vehicle in a decade.
Among other things, the newer version has a more spacious interior and comes with highly adjustable seats that offer heating, cooling and massage.
"The previous Navigator was fine, but it was nothing like this," she said. "This is a really gorgeous truck."
The updated version is so popular, the Navigator may have stolen away buyers from Cadillac, which makes the similar Escalade and Escalade ESV vehicles, Lindland said.
"Cadillac had owned that spot for years," Lindland said, "and now Ford has come in and is a fierce competitor."
Cadillac was not immediately available for comment.
Escalade sales were still up 15 percent in January over 2017, but Escalade ESV sales were down roughly 14 percent, said General Motors in its monthly sales release on Thursday. The Escalade did gain more than 2 points of retail segment share, and average transaction prices rose by about $2,300.
High-end SUV sales such as this are a good sign for Ford. The company wants to funnel money from profitable SUV and truck sales into new mobility businesses, such as autonomous vehicles. In addition, Ford is attempting to improve its financial fitness. Its bottom line lately has been impacted in part by rising commodity prices.
Source: CNBC
Latest News