Ford starts US production of the Ranger pickup for the first time in years

CNBC
Updated
Reintroducing the Ford Ranger and Bronco to the U.S. market is part of the company's gambit to take advantage of America's shift in consumer sentiment toward pickups, SUVs and crossovers.

Ford (F) resumed U.S. production of the midsized Ranger pickup on Monday for the first time in seven years.

The move is part of a plan to strengthen Ford's historically robust presence in profitable trucks at a time when the automaker faces pressure from shareholders and an uncertain future. Ford shares are down more than 30 percent this year, and the automaker is contending with high costs for materials, threats from traditional competitors and disruptive tech companies, as well as a trade war.

The second-largest U.S. automaker invested $850 million in the Michigan assembly plant to build the Ranger and the Ford Bronco. The Ranger was discontinued in the U.S. in 2011, but produced internationally, while the Bronco was discontinued in 1996.

Reintroducing both vehicles to the U.S. market is part of the company's gambit to take advantage of America's shift in consumer sentiment toward pickups, SUVs and crossovers. Ford plans to replace 75 percent of the vehicles in its lineup by 2020 and will move away from selling sedans and compact cars.

The midsize pickup segment is growing, and Ford has the potential to snag market share from current leader, Toyota, said IHS Markit analyst Stephanie Brinley said.

"Ford has seen the response General Motors (GM) has gotten from their trucks, and Ford is a pickup truck brand in a lot of ways," she said. "So they finally feel like they can make money there."

The new Ranger will be different from its predecessor in some key ways, Brinley said. It is bigger, and offers a four-door configuration now seen as essential for any pickup that wants to compete. Trucks are increasingly becoming appealing options for families or buyers who prefer a spacious cabin.

It is also priced a bit higher, in part, because customers demand more from trucks than they have in the past. The outgoing Ranger was very much a bare-bones, entry-level vehicle, Brinley said. The newer version starts at $24,300, and will come with more safety features and technology.

"The environment has moved on quite dramatically and I don't know that you could be successful with the same kind of truck the first one was," she said.

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