Last post on Jul 07, 2005 at 2:47 PM
You are in the Pickups - Archived Discussions
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Nissan Titan, Ford F-150, Exterior, Engine, Interior, Transmission, Truck
#207 of 1169 margins, margins, margins
Dec 30, 2003 (10:04 pm)
I may not be a businessman, but it would seem to me that Nissan with less volume and two brand new factories (one for new v8 engine and one for titan/armada production) to pay for, as well as the expense of training all those new to the auto manufacturing industry Mississippians and Tennesseens would DECREASE Nissans Margins, especially when you take into account that Nissan is undercutting Ford on MSRP. Ford has the economies of scale on their side for controlling unit prices thanks to their volume.
What is dragging Ford down is trying to keep up with GM, whose apparent new corporate goal is to sell as many vehicles as it takes to pay their pension fund. Ford will lose any incentive battle w/ GM especially since the new f150 is more expensive. Without the artificial demand GM is placing on the market with their heavy incentives, I think that the new f150 would be a runaway financial success for Ford. With the market as it is however I think Ford would be doing good just to match 2003's net profit.
In my opintion the Titan is an excellent truck, but it won't hurt Ford like GM can.
#208 of 1169 margins, margins, margins
Dec 30, 2003 (10:16 pm)
As a buyer who was 105% sure that I was going to buy a Ram 1500 Hemi.. I met this Nissan Salesperson who said, "just come drive the Titan"..
I now have a Radiant Silver CC LE in my driveway. This is not a truck in like an F-150 or Ram or Silverado. If you just drive this thing with an open mind you will discover a truly great cruising vessel. This is a vessel that will attract the non-typical truck crowd. I think that there are plenty of geeks like me who want a truck but don't really want a 'truck'..
Dec 30, 2003 (11:52 pm)
" since the new f150 is more expensive. "
Actually, Ford has already stated they have balanced out the higher cost of the new F-150 and it's yielding the same profits as the previous versions. Mainly because of some cost restruction, supplier cost reductions, as well as 60% of the new F-150 being sold are the higher (more expensive) trim versions.
Dec 31, 2003 (8:25 am)
I hadn't heard that. That statement was based on early articles I read about the new f150 that said it was $500-$800 more expensive per model. do you think that ford will be able to maintain that 60% higher trim versions when the heritage model is discontinued? and did they go back and get better prices from their suppliers after getting the numbers back from their initial sales?
#211 of 1169 Re: margins
Dec 31, 2003 (12:03 pm)
>>>...but it would seem to me that Nissan with less volume and two brand new factories (one for new v8 engine and one for titan/armada production) to pay for, as well as the expense of training all those new to the auto manufacturing industry Mississippians and Tennesseens would DECREASE Nissans Margins, especially when you take into account that Nissan is undercutting Ford on MSRP.<<<
You're right, Ford does have the economy of scale on their side, but at predictably far less margin. It could very well be that Nissan makes as much profit on one Titan as Ford does on four F150s.
As to the capital investment of Nissan, its a good point IF Nissan floated for capital the way Chrysler, Ford and GM usually do it. But expansion of Asian nameplates in North America has so far been done with non-financed capital expenditures, meaning Toyota, Nissan, Honda have paid (mostly) cash for any expansion. So they start new production by applying their margins -- ergo profits -- directly to the bottom line.
You are also correct about squeezing suppliers, something that Chrysler, Ford and GM have become very good at. They also expect a higher defect rate when they do that. History of the Asian nameplates in the US indicates that they are far more careful in this respect than the native nameplates since they have also been far more intelligent in realizing it costs far more to fix a problem than to design reliability in to the product in the first place.
Dec 31, 2003 (1:08 pm)
I just wanted to say thanks for the thoughtful reply. Where do you get your information about auto industry business practices? I am assuming you work/worked in the field for a while.
Dec 31, 2003 (1:42 pm)
I'm aware of the topic of this thread, but I wonder if nobody thinks the Titan is going to make a hit on the Silverado, and why that doesn't seem to come up? How many Tundra sales will be disintermediated with the Titan introduction? And what about Dodge? Personally, I think their exterior appearance is tops, but hate the rubbermaid (typical Dodge) interior look and materials, and that would be a deal breaker. Are they going to suffer sales to the Titan? Or are there only 2 trucks on the market now, the F-150 & the Titan? Why would Ford take all the damage from this new competitor?
#214 of 1169 aggiemph1..................
Dec 31, 2003 (2:53 pm)
I worked for GM in the '60s. I was a field representative for Buick, then went to Rochester Products Div. working for a fuel systems design team. I did automotive repair for private companies and I later worked in fleet management.
#215 of 1169 NVBanker................
Dec 31, 2003 (3:00 pm)
I'm not sure anyone actually suggested that Ford would take "all the damage" from Titan competition, at least that I can remember. Now being that the title of this thread is "Titan vs. F150," please don't be surprized if some over-zealous Nissan type wouldn't be attracted to it, or for that matter, some over-zealous Ford person here to protect "the name."
The entry of the Titan will serve more to put Chrysler, Ford and GM on notice that resting on brand name laurels and loyal name-loving customers will not secure market share.
Dec 31, 2003 (4:59 pm)
I'm never surprised, Dusty!