Having developed an aluminium F-150 pickup truck, Ford now has to deal with the challenge of preventing higher insurance rates and a shortage of mechanics equipped to repair its body from deterring buyers, a US media report said.
Darrell Amberson, chairman of the Automotive Service Association, told Bloomberg News he estimated less than 10% of the approximately 30,000 independent repair shops in the US are certified and meet training and equipment requirements to work with most aluminium auto body parts. While some dealerships do in house body work, independent businesses handle the vast majority of collision repair in the US, he added.
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Bloomberg said Ford is betting buyers will accept what it estimates will be a 10% jump in costs to insure the pickup in return for improved fuel economy, towing and payload. The automaker must also get the aftermarket industry up to speed as it debuts the highest-profile vehicle to swap aluminium for heavier steel.
Insurance companies charge less for coverage of the outgoing F-150 compared with the competition, Ford’s truck marketing manager, Doug Scott, told Bloomberg last week at the Detroit show.
“At the end of the day, that’s sort of a wash,” he said. “We’ve spent a lot of time and feel very comfortable that that’s not going to be an inhibitor.”
“Aluminium has a very poor memory and it resists straightening attempts,” Bloomberg cited Jeff Poole, a coordinator for I-CAR, a collision repair industry training organisation, as saying in an April 2013 webinar. “Experience really pays dividends here, and this is where we’ve got a learning curve ahead of us.”
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By GlobalDataScott countered that Ford’s internal data shows 90% of customers live within two hours of a capable repair facility for the outgoing steel F-150, and 80% are within 30 minutes. Buyers of the aluminium-bodied F-150 will have the same access by the time it arrives in dealerships late this year, he told Bloomberg.
“We’ve just been waiting for the reveal to unveil a certification process for dealer-owned body shops and the independent channel,” Scott said.
Chief operating officer Mark Fields has also addressed concerns. The automaker spent 18 months assessing its ability to service, manufacture and purchase material before deciding on an aluminium body, he told the Automotive News World Congress in Detroit, also last week.
Once the decision was made to go with the material, Ford was able to select a high-strength alloy that’s thicker than what’s used in the current truck because aluminium is about one-third the density of steel, Fields said, according to Bloomberg.
“The new F-Series is going to be more dent- and ding-resistant,” he said. “Our engineers have great tests where they’re dropping bowling balls. We’ve actually been testing this with a number of our customers, in the construction industry, the mining industry, to help us.”
But the report said residual values for the new F-150 could decline because insurers tend to raise rates on vehicles that are more costly to repair.
“The automakers can force their certified body shops to be able to work with aluminium, but that still could narrow down the choice and the scope of shops that consumers and insurance companies will have,” Larry Dominique, the president of residual forecaster ALG, told Bloomberg. “This will work itself out, but it could take 10 years.”
Past examples of aluminium use in vehicle bodies are inconsistent in terms of whether insurance rates rise and affect ownership costs that play a role in forecasting residuals, Dominique added.
Loyalty plays a huge part in US truck buyers’ purchase decisions. Dominique said that, even if the F-150’s residuals fall, which would make it more costly for buyers to lease the truck or dent the value of a trade in, Ford’s broader risks are limited. (He worked on rival Nissan’s first US made Titan pickup in 2001 and was its chief product specialist when at the automaker).
“Truck owners are so damn loyal,” he said. “When we would interview Ford, Chevy and Dodge owners, they would say, ‘Well, why would I even look at a Nissan?’ We were one rung below nobody.”
Ford estimates that 80% of its customers are comfortable with its use of aluminium because they come into contact with the material in other applications, such as with toolboxes and ladders that need to be both strong and light, Scott told Bloomberg.
The ability of the aftermarket industry to prove it can handle collision work on the new F-150 will be tested soon after the truck goes on sale, Amberson, the Automotive Service Association chairman, added.
“People don’t wait until the vehicle is a few years old to start having accidents,” he said. “We can see them very early on.”
