This post is not about tariffs...

[Dave O]

IF or when I need or want to replace my Maverick If I think they cost too much I’ll simply buy something else.
All I can do is vote. I have, I’m in, I’m a capitalist.
I sure as hell ain’t gonna piss and moan or worry about shit like that.
it’s such a waste of life.

I agree, thankfully no one can force me to buy anything at any price

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[slashsnake]

This is the wrong move. Let me simplify to illustrate. Let’s say Ford only sold 2 models, the Mexican Maverick and a 100% American built F150. They can either raise the price of the Maverick alone by 25%, or they can raise the price of the Maverick and the F150, both by 12.5% to smooth out the price increases.

If they raise the price of both, consumers will be outraged that they are being priced gouged on their 100% American F150, whose price should not have went up. Likewise, many potential F150 buyers will be priced out of the market for a full sized pickup because of the increased MSRP, causing them to either buy the cheaper Maverick, or switch to a different brand all together.

The end result will be that less people will buy the profitable F150’s and more people will buy the loss-leader mavericks.

Spreading the losses across all models will incentivize customers to buy the models that are causing you to lose money, and it incentivizes your customers to keep buying your Mexican made product, which is the exact opposite of what the US government wants to see happen, and the whole reason the tariffs were placed: to promote on-shoring of American manufacturing.

I don’t have the right solution. But spreading the tariffs evenly across all models is the wrong solution.

Not quite in this case, you are assuming both vehicles are sold at the same price and at the same rate there. About 131k Mavericks sold in 2024. 765k F150's in the same year. Say average Mav price was $31k (XLT with a few bells and whistles). Say it's $55k for the F150.

So, you have a billion bucks (based on 25% tariffs) to cover. if you split them between the two, you are looking at $1,133 per truck. Or an increase of about 2% on an F150 and 3.5% on a Maverick.

Yes, the company could just keep the higher end vehicles to sell and drop the smaller ones. But that would mean:

Letting first time buyers with lower budgets go elsewhere and find brand loyalty with another company (60% of buyers return to the same brand for their next vehicle).

Losing out on economies of scale where they can spread out fixed costs among more sales (costs the same to run an ad at the Superbowl whether you sell 100 cars or a million, costs the same to develop a 2.0 liter twin turbo for 100 cars or a million)

Finding different ways to comply with national fuel economy and emission standards or risk shutting down vehicles that don't meet those standards without the smaller volume offset vehicles.

Keep their presence in nations which prefer smaller vehicles.

 

[Tim d]

Which is why ford discounted a $25k truck to that as an introductory price. It lost money on each one for publicity, and it worked.

Did not know that.

 

[jonshep]

It leaves it me being glad I bought 1 2022 and I think it will be be the end. SAD

I don't feel that I will need another new vehicle, at my age, but if I do, and the Maverick increases $10k, then I will get another Ranger, if I can get in it.

 

[zen_]

One advant

I had heard rumors that Ford is retrofitting a plant to move Maverick production to the USA. Nothing much more but it kinda makes sense.

It does make sense, but the real question is whether rumors (from where) become actual investments building something resembling an affordable vehicle in the USA.

Automakers learned very quickly circa 2020-2022 when there were shortages of components that they could stop producing low margin vehicles, and profits only went up. When they all do that, and new competition is effectively locked out, it becomes a captive market.

 

[olderthanyourdirt]

I think some of your numbers are off. I was around then as well. Ypu are a little high on pricing and interest rates. Car loans were also tax deductible. WAGES have not kept up with Consumer goods and home value increases, food. I bought a new truck at 20 working in a plastic plant. I paid 6300k for a F150 4x4 camper special/ trailer special, dual tanks and tool box. I interest rate was about 11%. A home that is now priced at 1.4 million was 26000. Taxes of all kinds are much much higher on what's left of the shrinking middle. This is why people are pissed. Make it as cheap as possible for the most profit is the reason we are nearing 3rd world.

That term didn't mean what it does now. After WWII. Countries aligned with US were 1st world, Aligned or taken over by Soviet Union 2nd world, all others 3rd world.
Now that we pissed off western democracies we are alone and the majority of our people becoming poor, we are by the correct definition and the newer definition, 3rd World

Prime was 20%(the rate the Federal Reserve charges), I lived in AZ which had usery laws, banks couldn't charge over 16.4%. We were lucky we had a big bank with their own funds(Valley National, back then the 4th largest bank in the country. A F-350 crew cab was very rare back then as only Ontario Truck built them as the cabs were not mass produced stampings. Your 150 was either a reg cab or supercab, as no 150 crew was available until fall of 1996 with the redesigned body.

 

[Mark1]

Prime was 20%(the rate the Federal Reserve charges), I lived in AZ which had usery laws, banks couldn't charge over 16.4%. We were lucky we had a big bank with their own funds(Valley National, back then the 4th largest bank in the country. A F-350 crew cab was very rare back then as only Ontario Truck built them as the cabs were not mass produced stampings. Your 150 was either a reg cab or supercab, as no 150 crew was available until fall of 1996 with the redesigned body.

I'm talking late 70's, when a car payment interest was tax deductible and at most 4 years long. They are in comparison, so over priced we have leases and 6 year payment plans. Payments are longer and at minimum 6 times higher. Tarrifs aren't going to help with greed of capitalism. The death of a nation by the few. Cut education to continue to create more stupid voters. Feed hate not hunger.

 

[Phimosis]

I am sure a lot of you weren't born when we had the inflation in the late 70's. That is when the term sticker shock came from. in 1975 a nice car was $5k, by 1980 it was $10k. In 1977 we had a special order F-350 crew cab 4x4 delivered to the dealership with a $10 k window sticker and we thought no one would be able to buy anything. Prime rate was 20%.

In 1977, the prime rate was 6.25% at it lowest and 7.75% at its highest.

The 20% prime rate was in the 80’s. The record prime rate was 21%, also in the 80’s. There was only 3 months in the 70’s where the prime rate went over 12%.

If you remember correctly, Arthur Burns was the fed chair in the late 70’s and he was slow to act on inflation, which was the whole reason why inflation wasn’t going away.

The tipping point was when Paul Volker became the fed chair in August 1979. He immediately started raising rates: 2 increases in his first month in office, breaking the 12% mark. Then he just kept going, with more than 20 increases in his first year in office, leading to those 20% rates.

 

[dochawk]

If you remember correctly, Arthur Burns was the fed chair in the late 70’s and he was slow to act on inflation, which was the whole reason why inflation wasn’t going away.

Speaking as an economics professor:

uhh, no.

Far more complicated with many other factors. Even theFed story is more complicated than that.

As an oversimplification, each recession, the Fed would basically promise, "The is the last time we're going to fight the recession and unemployment with inflation. Really. Honest. Yeah, we said this last time, but believe us!"

And so everyone knew that inflationary policy was coming.

Volker bought credibility for the fed by holding the line on the 82-83 recession, which would not have been as severe had he thrown inflation at it.

This was a major factor in the nearly thirty year economic boom. The Bush & Clinton recessions were more "breathers" during the boom, and were negligible compared to the regular postwar recessions, up to and including 82-83.

And now we have the kids writing articles and columns referring to "the Great Recession",which is absolute and utter nonsense; it was a mere "regular" recession, which they simply hadn't seen before.

They seem to include the "interregnum" after the recession, which was ugly, as part. We'd never seen one of those before; several years between the end of the recession and the beginning of a normal recovery. You can supply your own reasons, but it roughly coincides with Obama's terms, whether from his policies or those of his predecessors, or administrative agencies, or mutant cows exerting mind control.

 

[FischAutoTechGarten]

“This isn’t about tariffs”

Directly addresses tariffs.

What this thread really needs is an Economics professor to explain it all to us...If we could only find such an individual here on the MTC forums.

 

[olderthanyourdirt]

yes, I got mixed up on the years

 

[Mark1]

The idea now that you gotta pay more money to pay less money is for the 50% of fools. It's going to hurt before it gets better
LMFAO!
A Recession is just a market correction... lmao. It corrects the gains of the many to give it back to the few that control it. Happens every 10 to 12 years.
Democracy to Capitalist, now to Autocratic Capitalist. The bigleeist move to date. The atmospheric river we go willingly to drown in with guns blazing at each other.

 

[dochawk]

What this thread really needs is an Economics professor to explain it all to us...If we could only find such an individual here on the MTC forums.

[ducks]

 

[RR - All the way]

Increased cost of new cars and increase cost of parts (6 out 10 foreign) will contribute to continued increase in car insurance. Cost of owning a car will rise at a steep rate. The good news.......... cannot think of any!!!

 

[oysterville]

Speaking as an economics professor:

uhh, no.

Far more complicated with many other factors. Even theFed story is more complicated than that.

As an oversimplification, each recession, the Fed would basically promise, "The is the last time we're going to fight the recession and unemployment with inflation. Really. Honest. Yeah, we said this last time, but believe us!"

And so everyone knew that inflationary policy was coming.

Volker bought credibility for the fed by holding the line on the 82-83 recession, which would not have been as severe had he thrown inflation at it.

This was a major factor in the nearly thirty year economic boom. The Bush & Clinton recessions were more "breathers" during the boom, and were negligible compared to the regular postwar recessions, up to and including 82-83.

And now we have the kids writing articles and columns referring to "the Great Recession",which is absolute and utter nonsense; it was a mere "regular" recession, which they simply hadn't seen before.

They seem to include the "interregnum" after the recession, which was ugly, as part. We'd never seen one of those before; several years between the end of the recession and the beginning of a normal recovery. You can supply your own reasons, but it roughly coincides with Obama's terms, whether from his policies or those of his predecessors, or administrative agencies, or mutant cows exerting mind control.

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