WOLF STREET F-150 XLT and Camry LE price index, 2022 model year update: this is the craziest situation I’ve ever seen
When trucks are advertised at $ 10,000 above MSRP, what does MSRP mean? I now cast a shadow over my fancy-schmancy proprietary index finger.
By Wolf Richter for WOLF STREET.
Every year around this time, I update the exclusive “WOLF STREET F-150 XLT and Camry LE” price index with the new model year MSRPs, base version with no add-ons and no destination and delivery charges. , for an overview of the price increases of the best-selling truck and car in the United States since 1990, and I compare that to the CPI of new vehicles, which is a lot of fun.
In October, Ford usually releases the final price for the F-150 XLT. Toyota normally publishes final prices for the Camry LE in early November.
The 2022 Camry LE is now starting to build with an ETA in November. But Ford’s production, which has been massively hit by the semiconductor shortage, is a huge mess.
Ford is still building the 2021 model year F-150 XLT, with a very large number of models still in the order bank, due to the semiconductor shortage that crushed production during the year.
A Ford and Toyota franchise dealer told me that some 2021 F-150 XLTs that were awarded almost a year ago are still in their order bank and appear likely to be built. But it can now also see window stickers for some more heavily loaded F 2022 series, but not for the F-150 XLT.
In June, Ford again said production of the 2022 F-150 was scheduled to begin at the Dearborn truck plant on November 15 and at the Kansas City assembly plant on December 6.
“To be fair, visibility of Ford vehicles and location information is undesirable at this point due to the extensive production and logistics issues,” the dealership said.
Ford still allows you to specify a 2021 model year F-150 XLT on its website. But you can’t yet specify a 2022 F-150 XLT.
On the other hand, the Lightening EV 2022 truck, Super Duty 2022 and Maverick 2022 are under construction.
Ford has yet to release final pricing for the 2022 F-150 XLT, although pricing has emerged in the form of leaks that have not been confirmed. I will use these disclosed MSRPs for now. If the final prices are different, I will update the index.
On the other hand, Camry LE models are starting to appear in the pipeline. The dealership said its first Camry LE 2022 had an ETA later in November. He doesn’t have any new sedans on the lot at all, and he said the Camry will sell out before he gets there.
“Although Toyota has production and logistics issues, they are pale compared to Ford,” the dealership said.
When I first started making the WOLF STREET F-150 XLT and Camry LE price index, I never thought I would run into this kind of mess.
The MSRP is suddenly not the best. this is the bottom.
In terms of price, my index is based on MSRP per model. In the past, there were always manufacturers’ incentives and discounts, and dealer discounts, and hardly anyone ever paid the MSRP for these vehicles. Almost everyone paid a lot less.
Now it is the opposite. Automakers have reduced their incentives and discounts. And dealers, instead of giving discounts, sell at MSRP, or add thousands of dollars as an “addendum” or whatever, to MSRP.
Instead of advertising the discounts, dealerships advertise these addenda. For example, a Bay Area Ford dealership advertises the 2022 Maverick SuperCrew with an MSRP of $ 23,775 and an addendum of $ 3,245, for a total advertised price of $ 27,020. It is 13.6% off MSRP. And it’s on command, not in the field.
The same dealer ordered a 2022 Ford F-150 SuperCrew Cab V6, with an MSRP of $ 57,500. The dealership slapped an addendum of $ 10,595 on this truck, carrying the advertised price of $ 67,995, or 18% above MSRP. It’s not on the lot yet, and there isn’t even an image of the truck on the dealership’s website yet.
This is the craziest situation I have ever seen.
The 2022 Camry LE’s MSRP, with no destination and delivery charges, increased only 1% from the 2021 model, to about $ 25,295, according to dealer and Toyota data.
The MSRP of the 2022 F-150 XLT without destination and delivery charges, according to circulating preliminary data, increased by less than 2% to reach $ 36,050.
But wait… Most dealerships no longer offer discounts on the MSRP. They sell near the MSRP or above the MSRP for most of their products. And they can.
Having customers scrambling to be able to afford these prices is the craziest industry situation I have ever seen in the automotive business. Unit sales volume at dealerships and automakers has plunged due to shortages, but they are making huge gross profits per vehicle of historic proportions.
What’s weird is that customers let them do it, and by letting them, they encourage them. Vehicles are the ultimate discretionary product. Most people can drive what they already have for a year or two. They did it during the Great Recession and caused the industry to collapse. But enough people are eager to pay these prices for this to continue.
This crazy pricing is now casting a shadow over my fancy-schmancy index.
The index is based on the idea that the discounts are there every year, and on average, they are similar in percentage terms, and therefore canceled out for year-over-year comparisons. Although hardly anyone paid the MSRP, it was a good indicator of the extent of the year-over-year price increases.
Now we have these crazy additives. So who knows what customers will end up paying on average for a 2022 F-150 XLT? MSRP + $ 5,000 instead of MSRP -3,000 as it was in the past? This would represent a price increase of $ 8,000! And it wouldn’t appear in my index!
But the consumer price index began to pick up additives.
The CPI for new vehicles, published by the Bureau of Labor Statistics, has started to reflect some of these addenda. For October, the new vehicle CPI jumped nearly 10% year-over-year, even as 2022 MSRPs barely budged.
The table below shows the MSRP for each model year of the F-150 XLT (purple, left scale) and Camry LE (red, left scale) and the Consumer Price Index for new vehicles ( green line, right scale).
The CPI for new vehicles is somewhat absurd, thanks to aggressive hedonic quality adjustments by the BLS. As a result of these adjustments, the CPI for new vehicles last year was roughly stable from 1997, and it was only the 10% peak this year that pushed the CPI for vehicles out. new ones from that range (here’s my discussion of hedonic quality adjustments to new vehicle CPIs):
Since 1990, the price of the F-150 XLT has climbed 178% and that of the Camry LE by 73%, while the CPI for new vehicles has only increased by 33%, thanks to these hedonic quality adjustments.
This relationship over the years between soaring truck prices and slower rising car prices extends across the industry. Pickup trucks, SUVs and compact SUVs – included in “trucks” – have been hot for years, while sedan sales plunged from 2014. GM, Ford and FCA have now completely abandoned the sedan market, and Tesla and foreign automakers are fighting over the crumbs.
Sales of “trucks” – pickup trucks, SUVs, compact SUVs and vans – reached 839,200 units in October. Sales of “cars” (sedans and muscle cars) fell to 207,100 units, the lowest in many decades, with the exception of the lockdown freeze in April 2020. This long-term demand gap between “trucks “And” cars “explains the price difference. growth over the years, and that explains why automakers like to build “trucks” – because they can charge them a lot more and make a lot more money – and why GM, Ford and FCA have thought, perhaps mistakenly they needed to bail out the sedan market:
Do you like reading WOLF STREET and want to support it? Use ad blockers – I totally understand why – but you want to support the site? You can make a donation. I really appreciate it. Click on the beer and iced tea mug to find out how:
Would you like to be notified by email when WOLF STREET publishes a new article? Register here.
Classic Metal Roofing Systems, our sponsor, manufactures beautiful metal shingles:
- A variety of resin-based finishes
- Deep grooves for a premium natural look
- Maintenance free – won’t rust, crack or rot
- Resists scratches and smudges
To reach the folks at Classic Metal Roofing, click here or call 1-800-543-8938