(C) Reuters. FILE PHOTO: The Ford logo is pictured at the Ford Motor Co plant in Genk,Belgium December 17, 2014. REUTERS/Francois Lenoir/File Photo
By Ben Klayman
DETROIT (Reuters) – Ford Motor (NYSE:F) Co on Thursday confirmed it will introduce a compact pickup truck called Maverick next week, augmenting its entry-level vehicle offerings more than three years after it said it would largely abandon the U.S. sedan market.
While Ford said it will provide more details about the truck on June 8, executives have talked about the “white-space” vehicle that will move the U.S. automaker into a new segment, and people familiar with the plans said the Maverick’s starting price will be below $20,000.
The four-door small pickup will be built, starting in July, at the company’s Hermosillo, Mexico, plant with plans to eventually build more than 120,000 annually, according to AutoForecast Solutions. Ford declined to comment on pricing or other details about the vehicle ahead of next week’s reveal.
In an industry where the average new vehicle now sells for almost $41,000, according to Kelley Blue Book, and the number of vehicles sold for less than $20,000 is rapidly shrinking, Ford hopes Maverick helps attract buyers turned off by its April 2018 announcement that it would stop selling the Fiesta (NASDAQ:FRGI), Focus, Taurus and Fusion sedans, the last of which was discontinued last year.
Ford’s current entry-level vehicle is the EcoSport SUV, which starts at just under $20,000.
Dealers are excited they will have a low-cost vehicle to draw buyers into the Ford brand.
“When they decided to get rid of the sedans, they made it very, very difficult for us to compete in that entry-level market,” said Rhett Ricart, owner of Ricart Ford in Columbus, Ohio. “Ford’s timing on this thing’s perfect. It’s going to put us back in the game.”
But Ford is re-entering a different market today. In 2012, 54% of all U.S. new vehicles sold for less than $30,000, but that share slid to 20% last year as consumers shifted to more expensive trucks and SUVs, according to Cox Automotive. As of April, only six car models sold for less than $20,000.
Today’s low-cost buyers focus instead on saving money, analysts said.
“Cars have become so reliable, entry-level sales have moved to off-lease and used cars,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. “When you have the average transaction price of $40,000, under $30,000 is quote unquote affordable.”
Ford is not alone in eyeing this end of the truck market either, as Hyundai Motor Co will this summer introduce the Santa Cruz compact pickup, which it has dubbed a “sport adventure vehicle.”
“It’s going to take us into an entirely new territory for the Hyundai brand and it’s going to attract a new buyer that probably wouldn’t have considered purchasing a Hyundai in the first place,” Hyundai North American sales chief Randy Parker said in an interview.
The Santa Cruz price tag will start around $25,000, he said. AutoForecast Solutions expects Hyundai to build fewer than 35,000 a year at its Alabama plant.
The Maverick also is an example of leveraging existing platforms to save money and speed vehicles to market. It will be built on the same vehicle architecture used for the Bronco Sport, Lincoln Corsair and Ford Escape SUVs, saving the company 68% off the original investment made for the Focus, Ford disclosed last December.
Behold the new entry-level Ford vehicle – it’s a truck