By on February 12, 2018

2018 ford expedition fx4, Image: Ford Motor Co.

For an automaker worried about shrinking profit margins, spending an extra $25 million is just fine if it means cranking out 25 percent more high-margin SUVs. And the Ford Expedition and Lincoln Navigator, now minty fresh after years spent withering on the vine, certainly fit the description of “guaranteed cash generator.”

Ford plans to add that sum to the $900 million already sunk into the Kentucky Truck Plant in an effort to boost production of its full-size SUV models, knowing full well Americans buyers will snap them up the minute they roll off the line. Is there a clearer example of an automaker treating SUVs as a license to print money?

Speaking to media at the Louisville plant, Ford’s president of global operations, Joe Hinrichs, boasted, “We can sell every single vehicle we can produce here.”

This isn’t just a case of wishful thinking, it seems. After waxing poetic about the two models’ juicy margins, Hinrichs said, “The dealer feedback has been even stronger than we’ve hoped for.”

According to Ford sales analyst Erich Merkle, the two models, which aged well past their best-before date before 2018’s aluminum-intensive redesign, have proven popular enough to warrant the extra attention. “Because they’re turning so fast, we’re going to do everything we can to meet the demand that’s out there,” he said.

2018 Lincoln Navigator, Image: Ford Motor Company

Expeditions average just 11 days on a dealer lot, Merkle said. Bolstering the model’s importance (and profitability) is the fact that, compared to the previous generation, twice as many buyers now spring for the high-zoot Platinum model. That trim, comprising 29 percent of Expedition sales in January, retails for $76,595. As well, some 84 percent of Navigators leave the lot in Reserve or Black Label trims.

Suffice it to say, average transaction prices ($57,700 for the Expedition, $77,400 for the Navigator) are nowhere near the models’ sharply increased entry price.

Ford is apparently so eager to feed retail buyers, an Automotive News source claims, that the company has barred employees from ordering an Expedition or Navigator through its manager lease program.

Why the desperate measures? Investors, and a steep drop in the company’s automotive profit margins. In the fourth quarter of 2017, Ford’s 3.7 percent margin was a full two points lower than a year earlier. Rising commodity prices, especially that of aluminum — of which the F-150, Expedition, and Navigator use plenty — takes much of the blame.

While Expedition sales fell 15.4 percent in January, year over year, Ford credits the drop to fleet order timing. Sales of the Navigator, on the other hand, shot up 97.5 percent compared to a year earlier.

[Sources: Reuters, Automotive News] [Images: Ford Motor Company]

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42 Comments on “Ford Throttles Up Production of Big-buck Expeditions, Navigators, in Bid for Boffo Profits...”


  • avatar
    Middle-Aged Miata Man

    Smart move by Ford. Ya gotta make hay while the sun shines although that rushed production rate will certainly do nothing to improve build quality.

    • 0 avatar
      AVT

      That could bite them in the end though. Given how many of these I suspect are leases, ford could be biting off more than it can chew. Gm has always done well with BOF SUV’s because they’ve gained a reputation of being rugged and reliable well past 200k. Just look at the resale values of the same model year suburban and expedition or escalade/denali and navigator. Gm’s are all higher. That part of the reason I think ford won’t make a lower cost expedition. They can’t profit off it or get it back in lease return value when put back to market. I’m not saying that’s a bad thing but gm owns the full size suv market because they offer something for everyone. They still even have enough fleet sales to somehow make the 2500 suburban. And someone help them if the market keeps getting worse or gas keeps increasing. High dollar vehicles with heavy consumption figures. Man sounds like hummer, and we saw how that went.

      • 0 avatar
        TwoBelugas

        The Tahoe/Suburban variants with their small block and then ecotec V8s have been taking lunch money from the Triton then V6 Expedition siblings for 20 years now and it’s not about to stop any time soon.

  • avatar
    PrincipalDan

    $77,400 ATP for a $90,000 vehicle? What’s hilarious about that is the ATP probably still represents $20,000 in profit.

    It is amazing how you can easily find full size trucks selling at lower ATP than their midsize cousins.

  • avatar
    jack4x

    I sat in a Black Label Navigator this weekend at the Chicago Auto Show and came away extremely impressed. If (and it’s a big if) any of these trucks is actually worth $100,000, that’s the one.

  • avatar
    SCE to AUX

    “…treating SUVs as a license to print money”

    Yep – supply and demand. Don’t like the price? Don’t buy the product.

  • avatar
    Sub-600

    $76k for a Ford. The P.T. Barnum Triple Platinum Gold Onyx Titanium Diamond Edition.

  • avatar
    shane_the_ee

    Faster please! Placed a deposit 4 weeks ago for an FX4 Max and it’s still not even scheduled for production.

  • avatar
    dal20402

    I don’t understand who all these people are who can afford to eat $40k to $60k of depreciation over just a few years.

  • avatar
    Marathon Mike

    Do we really know if Ford has figured out how to keep paint from peeling off those aluminum panels? It seems that every Expedition I see out there (including my own) has paint peeling or blistering on the hoods and lift gates. That began after the vehicle was 4-5 years old.

    No help from Ford on the matter.

    • 0 avatar
      sportsuburbangt

      I was thinking the exact same thing.
      The paint on my tailgate is bubbling up, my Expedition is 5 years old with 60k on it. The new ones have a lot more aluminum to keep the paint on.

  • avatar
    TwoBelugas

    In the context of the segment I suppose this is the best PR spin Ford can muster to make their low production due to low demand look like a good thing. Of course you will have low supply day count if you only make 50k a year of these things.

    To put it into perspective, last year Navigator barely outsold GMC Yukons, and only 10k Navigators. Meanwhile GM sold 100k Tahoes and 50k Yukons, plus 37k Escalades. Ford actucally sold 15% or so fewer Expeditions in 2017 than 2016.

    • 0 avatar
      AVT

      Don’t forget suburban and fleet orders for the 2500 suburban, which you can only order now as a fleet operator. Something I hope they will reconsider in the future.

      • 0 avatar
        TwoBelugas

        You are right, my bad, yes, another 91.5k of Suburban/Yukon XLs. LOL. I guess BOF SUV buyers do want V8s.

        I wonder how much perk Ford is giving the auto reporters to write words like “ramp up” and “demand surges” in their headlines today.

        • 0 avatar
          AVT

          Ever more amazing is gm has not refreshed that vehicle for 5 years now so I imagine the tooling is more than paid for and that the profit per unit is much greater than ford’s. And once the redesigned versions of those come out probably a year after the trucks do based on gm’s production plan going into the 2020’s I expect chevy to really kill it. Especially if quality concerns start appearing with ford BOF SUV’s given they’re aggressive production ramp up.

        • 0 avatar
          Maymar

          Considering Expedition sales have been soft for about a decade (and for that matter, ’16-’17 were Ford’s best sales since ’08), I’d wager that the V6 is a very small factor. It certainly hasn’t hurt the F150.

          • 0 avatar
            TwoBelugas

            A large portion of the F150s are low end fleet trucks, the fleet operators will live with a 1 liter turbo running a 25 speed transmission if it is backed by a warranty and a loaner when it’s down, as long as the price is right. You would be amazed at how cheaply fleets get F150s.

            Else how do you explain why GM outsells Fords 5 to 1 in the segment?

          • 0 avatar
            Maymar

            For what it’s worth, I work in fleet (albeit one where we’re not getting loaners for vehicles with downtime), and considering resale is a big concern for us, we’re not taking an option that we won’t get our money back for when we go to sell it (we’re not big fans of downtime either).

            That said, anecdotally, but your average daily driven F150 in my area (IE, XLT or higher, supercab, never dirty), is more often than not an Ecoboost. Also anecdotally, but looking at the F150s on Fuelly (I’m making an assumption here that few people will be using that to track the mileage in their fleet vehicle), only 17% of ’17 F150s report the 5.0, the rest are some variation of V6.

            If I had to guess, the Tahoe has been redesigned twice during the life of the last gen Expedition, so buyers were less interested in the older truck, especially if it wasn’t appreciably cheaper. It might be that the independent rear end (and its lowered towing capability) turned off a few buyers. I certainly can’t think of the last time I saw an ad for an Expedition or Navigator, while GM’s still advertising its full size SUVs.

            And I’ll come back to it – GM certainly sells the Silverado and Sierra to fleets, so how do you explain the F150 outselling them combined?

          • 0 avatar
            PrincipalDan

            I was reading that Ford’s prediction for the mildly revised F150 their releasing is that the 2.7 V6 Ecoboost, 10 speed, 4×4, crew cab will be the most popular model.

            I’m seeing lots of Ecoboost badges on F150s and given that they are mostly XL and XLT models in this area I’m guessing they are 2.7 and not 3.5.

      • 0 avatar
        EBFlex

        The 2500 Suburban hasn’t been available since the most recent redesign.

    • 0 avatar
      SPPPP

      Just a musing a few months in. It looks like Ford is on track to sell over 18,000 Navigators and over 60,000 Expeditions this year. If they make about $10,000 profit on each vehicle (which I think is very possible, if not conservative), they will clear 780 million dollars of profit from these two vehicles. That’s nearly ONE BILLION DOLLARS.

  • avatar
    brawnychicken333

    Had a brand new Expedition Max (limited trim) as a rental a few weeks ago. Gotta say-it was spectacularly good. I haven’t been inside a Suburban in a long time-but based on the photos-the Expedition seemed significantly better.

  • avatar
    200k-min

    More power to Ford in maximizing profits on another Canyonero. Just hope they don’t let their sedans wither on the vine and get caught flat footed when the market swings…and it will swing sooner than later.

  • avatar
    kcflyer

    Sat in the new expo and navi as well as all the gm variants last night at the auto show. I would take the fords over the gm’s just to get a steering wheel that’s magically centered on the drivers seat.

  • avatar
    CKNSLS Sierra SLT

    The Suburban/Tahoe are the king of this market segment. For many the Expedition isn’t even on their “radar” when it comes time to acquire a vehicle in this class.

    The high transaction prices are not hurting GM.

    • 0 avatar
      highdesertcat

      We rented a 2016 Expedition EL from Enterprise last year and put over 3500 miles on it traveling cross country. It was a much better traveler than the GM Suburban/Yukon series in every regard. I’ve owned Suburbans before, most recently a 2013 Suburban that belonged to my wife’s dad.

      The only thing I would prefer in that class of vehicle is a V8. The Ecobust in the Expedition we rented was adequate but straining and pulsing accelerating off idle, especially in the hilly country of the Great Northwest.

      Put a 302 or larger V8 in it, blow it if you must, and that would be a combo hard to beat.

      BTW, the Ecobust doesn’t give great FE in hilly country or at slow speeds where it is just an overworked little V6, before all the cold air kicks in at higher RPM.

  • avatar
    thegamper

    I have to believe the profit margin on a $100k Navigator is well over 50%. These are nice looking vehicles but that is an astronomical price. Jut buy a F150 with a topper, Buy a bunch of chrome tape and some murdered out rims, replace the badges and save yourself $70K. Most people wont know the difference, possibly including yourself.

    I guess I haven’t reached that stage in my life yet where I enjoy completely wasting money by paying for vehicles by the pound and for square footage of chrome it boasts. I don’t think I will ever subscribe to the “its better because it costs more” school of thought.

    But the UAW thanks you for their bonuses and raises, the Ford Family can enjoy another generation of leisure thanks to all those willing to pay huge premiums on extra large vehicles that don’t cost all that much more to manufacture. Brilliant profiteering almost as diabolical as the pet rock.

    • 0 avatar
      CKNSLS Sierra SLT

      Well……
      thegamper

      Sometimes there comes a point in life where you have to decide how much to leave to your kids when you hit “the big highway in the sky”. Once you reach a decision then you can buy a decked out Suburban or pickup truck.

      • 0 avatar
        SaulTigh

        Since I have no kids, and won’t be, that’s an easy decision. I’ve got a date with a pre-owned Navigator in a few years, provided the robots don’t come for my job first.

      • 0 avatar
        thegamper

        Haha, well I doubt that’s what I would waste my money on when I reach that point but at least we can agree that these rigs aren’t exactly a strong value proposition.

  • avatar
    EBFlex

    Good luck Ford. It’s pretty sad when you can barely build a better vehicle than the rather long-in-tooth Durango. Once you factor in the Durango’s price and compare it to the extremely overpriced Ford, it’s clear the Durango is a better vehicle.

    Nice try Ford. You bet the moon on the Expedition and once again came up short.

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