Ford's sales of big trucks surge after shift to U.S.

DETROIT — A 2015 move by Ford Motor Co. to shift production of its biggest trucks to Ohio from Mexico and stop buying their powertrains from outside suppliers has opened a new profit pipeline for hundreds of dealers and helped sales reach their highest level in more than 20 years.

Combined sales of the F-650 and F-750 rose 83 percent in the first half of the year, according to Ford. The company said it had gained nearly 5 percentage points of share through April in the Class 6 and 7 chassis- cab segment. With almost 20 percent of the Class 6 and 7 chassis-cab market, the automaker now trails only truck manufacturers International and Freightliner.

The medium-duty trucks, commonly used by construction and utility companies, make the F-150 and even some Super Duty models look puny by comparison. But the number of Ford dealerships that have made room on their lots to sell the high-margin behemoths has risen 25 percent this year. About 500 dealers now service them, up from roughly 100 in 2015.

"It's been a big help to our bottom line," said Jeff McKee, general sales manager of Friendly Ford in Geneva, N.Y.

The store started selling and servicing the medium trucks last year after a facilities upgrade. He said it was a "natural progression" from selling Super Duty pickups and wishes the dealership had signed on sooner.

Sales of the trucks have been supplementing the higher-volume, more consumer-oriented end of the F-series lineup, becoming a vital growth area for dealers in a post-peak market as sales of personal vehicles slow. Ford, which has dominated the U.S. commercial vehicle market since the Reagan administration, achieved its best second-quarter medium-duty truck sales since 1997.

"It's such a positive story in terms of volume and revenue," Kevin Koester, Ford's commercial truck brand manager, told Automotive News. "The trucks that are coming to take care of things and keep society running are our bread and butter. We have to be invested in these vehicles."

Ford, which plans to freshen its medium trucks for the 2021 model year, credits the 2015 production shift for their recent success. Years before President Donald Trump began pushing for more U.S. manufacturing, Ford moved assembly of the F-650 and F-750 from Mexico to Avon Lake, Ohio.

It also replaced their Cummins engine and Allison transmissions with Ford-built powertrains. Aside from earning Ford some made-in-America brownie points with the UAW and politicians, the shorter transportation times from Ohio made it easier for retailers to stock the vehicles.

"In the past, you needed special certification to work on them," Koester said. "By bringing that all in-house, it opened our doors to a lot of dealers. For us, that benefit has been very clear and very positive."

Koester said the growing network of dealerships selling and servicing the F-650 and F-750 stretches across the U.S. It includes Galpin Ford in North Hills, Calif.

Galpin Ford last year hired a dedicated commercial fleet director to oversee its commercial business and plans to open a standalone facility to sell and service such vehicles in 2020.

Its investment already is paying off. Galpin sold nine medium trucks in all of last year. In the first half of 2019, it has sold 18.

"It's been a big bright spot," Sean Butts, Galpin's commercial fleet director, told Automotive News.

Butts said Galpin makes, on average, a $4,000 to $5,000 profit on each truck — six to eight times the contribution of a base model Fusion or EcoSport.

The dealership has tried to anticipate its customers' needs and has emphasized stocking ready-to-go studio trucks, used on Hollywood movie sets. Customers can buy the trucks, new or used, or rent them as needed. The trucks are built on F-650 chassis and outfitted with box bodies, lifts, electrical equipment and other items. They cost about $130,000 fully outfitted.

Butts also has put dump trucks and studio trucks on the dealership's lot to help draw eyeballs. At least three buyers have said they came in because of those displays, he said.

"It's about listening to customers," Butts said. "We're competing with Freightliner and some other makes, but frankly, the customers in the L.A. market have been gravitating to F-650."

Ford has tried to make selling and servicing the vehicles as painless as possible.

Because dealerships no longer need additional certification to work on the powertrains, they can order parts through the standard Ford catalog.

There's also a personalized call center to help salespeople configure a truck to meet a customer's needs.

Ford offers dealerships access to trained service specialists who can answer questions and ensure their service centers have the necessary tools to work on the trucks. The automaker said not much is needed except special lifts that can handle the vehicles' weight.

Butts said medium-truck sales can trickle down through the rest of the showroom.

"If an owner-operator really likes it, it's going to steer him and his family to buying some personal vehicles as well," he said. "It's a big staple for us."