Lower Oil Prices Steal The Buzz For The New F-150 Pickup, But Ford's Stock Rises

Disclosure: I own F shares Ford’s F-150 Pickup is the right product for the wrong time, but it will help drive the company’s sales and stock higher. Ford Motor Company continued its launch of new products last week, with the rollout of the new aluminized F-150 pickup and that’s the right product, at least for energy conscious consumers and government regulators. “There is no dramatic change to the looks of the Ford F-150, but the aluminum body makes a big change in weight,” writes Consumer Reports. “It’s 700 pounds lighter than the previous generation. Fuel economy regulations are getting tougher. So pickup truck manufacturers have to make changes. The previous F-150 got 15 miles per gallon in Consumer Reports tests. Making the truck lighter, the engineers say, should make fuel economy better. And the lighter weight also allows Ford to use smaller engines.” The trouble is, however, that the new F-150 comes at a time oil prices have been falling sharply making efficiency less of a concern for thrifty consumers. Still, a growing US economy, record low financing rates, and Ford’s mastery of the buzz may pave the way toward a smooth ride for the new vehicle. That would mean an improving financial performance for Ford, as pickup trucks are the primary driver of Ford’s profit. “F-series trucks bring in the bulk of Ford’s profit,” writes Barron’s Jack Hough, noting that General Motors’ re-entry into the midsize pick-up market may help Ford. “General Motors re-entered the cheaper midsize pickup market with Chevrolet Colorado and GMC Canyon,” he continues. “That could indirectly benefit Ford, which doesn’t sell a midsize pickup in the US.” Wall Street has already taken notice, helping the company’s stock rebound nicely from yearly lows last week. Still a bargain at 9 times next year’s earnings and 3.5% dividend. Ford’s and GM’s Financials