Ford Falls as Cheap Fuel Raises Concern New Truck Too Expensive [View all]

[Purveyor]

By Keith Naughton Dec 15, 2014 12:48 PM ET

Ford Motor Co. (F), starting to ship its new aluminum-bodied F-150 pickup, fell as much as 4.4 percent after Deutsche Bank AG downgraded the automaker on concern that the truck won’t command premium prices amid low fuel costs.

The shares dropped 3.6 percent to $14.46 at 12:44 p.m. in New York after earlier slipping to $14.33, the lowest price in about a month.

Ford, the second largest U.S. automaker, said last week it has shipped more than 5,000 new 2015 F-150 models, with fuel economy improved by as much as 29 percent due in part to its light-weight aluminum body panels.

With U.S. gasoline prices at a 5-year low, consumers may not be motivated to pay more for the F-150, Rod Lache, an analyst at Deutsche Bank in New York, said yesterday in a note. Lache, who downgraded the shares to hold from buy, also said automakers face “regulatory cost burdens” in part to achieve average fuel economy of 54.5 miles per gallon in the U.S. by 2025, that are “unprecedented.”

“Ford’s new 2015 F-150, which incorporates a number of advanced but costly powertrain, light-weighting and safety technologies, represents one of the most prominent early examples of this forthcoming change,” Lache wrote. “We question whether consumers will pay the price for this content with $2-$3 gas.”

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http://www.bloomberg.com/news/2014-12-15/ford-falls-as-cheap-fuel-raises-concern-new-truck-too-expensive.html