New vehicle prices have remained at or near record levels for the past couple of years, a trend that emerged following the onset of the COVID-19 pandemic. After production shut down for a few weeks and automakers struggled to build vehicles amid that difficult situation due to labor and parts issues, new vehicle inventory dwindled to record lows, and when demand began to ramp back up, Ford simply couldn’t build enough vehicles to meet it – a trend that continues to this day. However, things are beginning to ease up a bit, and Ford CEO Jim Farley believes that prices will begin to cool off this year.
“Coming back to the U.S., as we said, a 15 million unit industry, we think prices are going to come and the industry are going to fall, transaction prices will fall about 5 percent,” Farley said while speaking during the automaker’s recent Q4 earnings call with investors. “You think about that as about a combination of incentives and lower dealer margins. We’re starting to see dealer margins come down now as our demand from the industry is easing a bit.”
These comments come just a few weeks after Ford Pro CEO Ted Cannis noted that he believes the semiconductor chip shortage – a problem that has persisted for nearly three years now – will begin to ease this year. However, Farley also recently stated that he believes that there is no foreseeable end to the various supply chain issues plaguing the automaker, noting that the company is simply trying to navigate those shortages as effectively as possible – a bit of pessimism from the Ford CEO.
Meanwhile, FoMoCo’s average transaction pricing rose by 11.6 percent in 2022 – from $51,205 to $57,170. As a whole, the industry saw ATP grow by 4.9 percent year-over-year, from $47,210 to $49,507, though in all cases, this meteoric rise cooled slightly as the year ended with interest rates increasing and sales on the decline. Regardless, all of these numbers once again represented a new record.
We’ll have more on new vehicle pricing soon, so be sure and subscribe to Ford Authority for comprehensive Ford news coverage.
I would like to see what role (share) dealer markups played in Ford’s ATP increase.
As well as how that share of ATP increase compares to other OEMs.
Good questions. Not included maybe because they may not make him or the company as a whole look good.
Really? Oh come on. Like stating the drop-dead obvious.
Yes, dimwit, really.
Of course the contribution is obvious but instead of flopping and twitching with nonsense NC Area Man hurr durr replies to something already obvious by my comment, I would like to see metrics.
Transaction prices will fall in 2023, because their products are now poorly made (hence Recall Motors). Ford will be forced to offer huge rebates in order to sell their heavily recalled products.
have you not seen the recalls on all the other manufacturers? there’s a reason ford has more….they sell more.
More than who? Toyota? GM?
I won’t be buying any more ford products I have been a life long ford truck person they say they can’t get parts I have been waiting on a. F350 for awhile now if I did get this one it would be # 26 but the price increase is not worth it
Ford Procurement & QA needs outsourced
Farley needs to be fired, Ford needs new leadership. Why is it ok for the manufacturers raise prices by thousands and the dealers on the front line keep getting on the slack about them trying to make living for their employees and community Farley could care less.trying to point blame so nobody is watching what he is doing.
I’ve been purchasing new F150’s every few years for over decade, but I am currently priced out of the market.
I purchased a 2021 in March of that year before everything went crazy (got a $5,000 rebate) which brought the cost of my XLT under 50 grand, that same truck today is now over 60 grand…. I’m done!
That problem with Ford was not the vehicle but the made prices unaffordable for most workers,now they are talking about only making EVs,it’s going to hurt them bad,it’s still not enough charging stations to abandoned gas operated cars yet,in new York there’s maybe 2. All that’s going to do is push people to foreign cars, by the way I own a 2020 Ford edge titanium excellent car