Conditions remain ripe for new vehicle prices to continue to rise, and that’s precisely what has happened over the last few months. The semiconductor chip shortage continues to impact production in a big way, and will likely do so well into 2022. That has moved the supply/demand curve in one definitive direction, and average transaction prices continue to set new records with each passing month. That’s been the case with Ford, which saw its average transaction prices rise by $8,400 in July, while Ford SUV average transaction prices set a new record by reaching $42,000 for the very first time.
That number represents a $6,200 increase over July of 2020, though it falls a bit short of Ford’s overall average transaction price of $50,000, which is buoyed by truck sales. Regardless, a steady stream of new Ford SUV and crossover products has played a big role in driving prices upward, including the Ford Bronco, Ford Bronco Sport, Ford Mustang Mach-E, and the Ford Explorer Timberline and King Ranch.
Higher-trim SUVs and trucks also helped Ford improve not only its average transaction prices but also its profitability over the last few months. The automaker managed to boost its revenue by roughly $5,000 per vehicle in Q2 and add $1.5 billion to its operating profit. These results are part of what has prompted the automaker to shift toward a more build-to-order model moving forward and reduce its inventory on dealer lots, as CEO Jim Farley recently admitted that Ford has been “wasting money on incentives” for some time now.