Deutsche Bank AG decided to downgrade the rating of the second-largest US automaker, Ford Motor, on concerns that the initial asking price of the aluminum-intensive new generation F-150 pickup truck might not get its usual premium earnings.
The company swiftly dropped to its lowest in five weeks because investors have grown weary that the higher production costs of the 2015 F-150 won’t yield the same fat profits that pickups usually bring. That’s because the manufacturing of the aluminum-intensive truck is more expensive than its mostly steel rivals, and the new model’s price hike could fail to offset the difference. Ford has just started to ship to dealer lots the new truck, with the New York Stock Exchange level of the company’s shares fell 4.7% – the biggest drop in 11 weeks – to close at $14.28, it’s lowest level since November 10.
According to the automaker, the new F-150, mostly thanks to the weight savings brought by the unusual high use of aluminum, announced last week it has already sent 5,000 of the new trucks to dealerships, ready to brag about its fuel mileage ratings that have improved as much as 29% over the predecessor. But, according to Rod Lache, an analyst at Deutsche Bank in New York, the price of gasoline n the US – now at a five-year low – might offset the motivation to buy the newer, pricier truck.