Ford's Profit on an Expedition

Fossil Farm · Mar 20, 2019

Interesting article suggesting that Ford can make $20,000 on each Expedition sale.
Guess they are trying to figure out a way to increase production at its
manufacturing facility in Kentucky. Wonder how much they make on each F150/250
sale. Hope the link to the article works OK.

https://www.ohio.com/news/20190319/ford-boosts-output-of-big-suvs-for-second-time-in-two-years

zzvyb6 · Mar 20, 2019

Keep in your mind the fact that they had to design, prototype, test and build a salable vehicle: Engine line, tear up a body shop, add a paint line, durability testing, Global Requirements Certification, rollover mitigation, interior, parts and emissions certification. All that costs a LOT of money. I'm very familiar with GM's costs. It would take well over a $billion in cash to deliver a vehicle to dealers. There's also no guarantee the thing will sell, either. If gas goes up over $4.00 a gallon, you may be able to get one free with an Escort. It's a Suburban wannabee, anyways. AND, all that profit offsets the big losses from all the small cars that you have to sell in order to achieve EPA required, Government mandated Corporate Average Fuel Economy (CAFE). BTW: its about the same to produce an econo-box as a truck unless it's carry-over stuff from an existing vehicle. Engine, body, chassis, tires, glass, electrical, shipping, labor, plastic and fluids.

Fossil Farm · Mar 20, 2019

Thanks for the info. Thought there was more to the story than just profit. I know there is a lot that goes into
producing or updating a vehicle, much more than most people realize.
I guess I don't worry as much about MPG than folks that drive a lot of miles every day.
Would rather have a beefier vehicle then a tin can, even if gas prices go up.
Guess I grew up when 15 MPG was pretty good.

Garandman · Mar 20, 2019

GM sales almost double the number of Tahoes and Yukons as Ford sells Expeditions. About 112,000 GM's versus 64,000 Expeditions in 2018.

The Expedition is more sophisticated, with IRS and the twin-turbo EcoBoost engine. But never underestimate Americans' ability to buy giant, ill-handling vehicles.....

Wagtail · Mar 20, 2019

zzvyb6 said:
Keep in your mind the fact that they had to design, prototype, test and build a salable vehicle: Engine line, tear up a body shop, add a paint line, durability testing, Global Requirements Certification, rollover mitigation, interior, parts and emissions certification. All that costs a LOT of money. I'm very familiar with GM's costs. It would take well over a $billion in cash to deliver a vehicle to dealers. There's also no guarantee the thing will sell, either. If gas goes up over $4.00 a gallon, you may be able to get one free with an Escort. It's a Suburban wannabee, anyways. AND, all that profit offsets the big losses from all the small cars that you have to sell in order to achieve EPA required, Government mandated Corporate Average Fuel Economy (CAFE). BTW: its about the same to produce an econo-box as a truck unless it's carry-over stuff from an existing vehicle. Engine, body, chassis, tires, glass, electrical, shipping, labor, plastic and fluids.

And don't forget the wages/benefits that the company needs to generate IOT pay the workforce.

atsah · Mar 20, 2019

Also add in any warranty work that can be involved.

om21braz · Mar 20, 2019

I can remember reading about the Cadillac Seville. About mid-stream of production during the Northstar years that if it was the only new car produced and sold in US - the volume would be such to allow selling them for $ 3500 and make a profit.

Sawyer Rob · Mar 21, 2019

Isn't the Expedition the model folks are smelling exhaust in?? Like 3,000 complaints, and are now being investigated for those complaints. A couple of the cases, people passed out and crashed...

Even the Expedition police vehicles, that were making cops sick, Ford said that was caused because the police added equipment that let exhaust in...

But, Ford says it's not happening, there's no exhaust leaks.

I just think the Ford of today, isn't the Ford of old...

As a side note, my buddy just bought a NEW F150 a month ago, and it already left him stranded along the road, over heated when it lost all the coolant.

SR

ddbackhoe · Mar 21, 2019

zzvyb6 said:
Keep in your mind the fact that they had to design, prototype, test and build a salable vehicle: Engine line, tear up a body shop, add a paint line, durability testing, Global Requirements Certification, rollover mitigation, interior, parts and emissions certification. All that costs a LOT of money. I'm very familiar with GM's costs. It would take well over a $billion in cash to deliver a vehicle to dealers. There's also no guarantee the thing will sell, either. If gas goes up over $4.00 a gallon, you may be able to get one free with an Escort. It's a Suburban wannabee, anyways. AND, all that profit offsets the big losses from all the small cars that you have to sell in order to achieve EPA required, Government mandated Corporate Average Fuel Economy (CAFE). BTW: its about the same to produce an econo-box as a truck unless it's carry-over stuff from an existing vehicle. Engine, body, chassis, tires, glass, electrical, shipping, labor, plastic and fluids.

So, bottom line, those new trucks I wont be buying because of price are because the profit margin is only 34.99 0/0? Every company has to make a profit to keep the doors open. The percentage is what’s always open to interpretation. If I’m selling gas and tell you I make 2.5 cents per gallon, what have I really told you?