People are going crazy to get their hands on Ford Motor Co.'s (NYSE:F) new GT. When Ford rolled out the high-end sports car, it pretty much stole the show in Detroit, but as soon as the rumored price tag of $400,000 hit the news feeds, it became the newest product you could look at but not touch. (The closest I would be able to get to a Ford GT would be a rejection letter -- yes, it's so exclusive you have to apply to be considered to purchase one.)
While it's a good thing people are going crazy for one of its vehicles -- more on that in a second -- Ford gave a little hint at what its goals for the supercar are, and even with that high price tag, they don't appear to include making much of a profit on it.
Get in line, and make a video or two
"We're excited by the amount of enthusiasm fans are showing for the new Ford GT," Dave Pericak, the director of Global Ford Performance, said in a press release. "This initial application window is just one of many ways fans and potential owners will have to connect with our all-new supercar even before it hits the streets."
After nearly 11,000 people expressed interest in buying a GT, Detroit's second-largest automaker received 6,506 completed applications from people across the planet. And 32% of those applications were completed in the six days before the opportunity came to an end -- procrastinate much, world? Some applicants even sent in videos -- some professional-caliber, and some shot with the nearest smartphone -- to try to improve their odds.
But, alas, out of those 6,506 applicants, only a small fraction will be able to purchase the vehicle; about 6,000 will instead receive a rejection letter – which, personally, I'd probably frame anyway. While those 500 GTs could generate roughly $200 million in revenue for Ford, chances are, the margins on these cars are pretty slim at a production rate of about one or two a day.
So, if it's not selling the vehicle for big profits, why develop the Ford GT? Ford dropped a clue when it mentioned that it wanted applicants and potential owners of the vehicle to actually drive one. That's because Ford's entire goal with the GT supercar -- and the performance lineup that will follow -- is to generate attention and excitement for the brand as a whole.
While Ford's mainstream offerings won't be mistaken for vehicles with the heritage and racing clout of a Ferrari anytime soon, these marketing antics do matter, and the GT does have a racing legacy. Building on that legacy with the new GT and the rest of the performance lineup -- Ford will bring 12 new performance vehicles into the fold through 2020 -- will take advantage of a growing market.
Consider that at the time Ford announced its performance lineup ambitions over a year ago, it was aiming for a performance market growing around the world, with sales up 70% in the U.S. and 14% in Europe since 2009. Since then, the results in Europe have seemed promising.
Just last month, combined sales of the Fiesta ST, Focus ST, Focus RS, and Mustang were up 62% compared to last year's April, and were up 91% year to date. Furthermore, the Mustang, which hadn't been sold on a truly global scale before the 2015 model year, was Germany's No. 1 sports car with private consumers at retail.
Investors shouldn't expect the GT to move the needle on Ford's bottom line. But as long as people are going crazy to get their hands on one, and the rest of the lineup continues to expand sales and influence worldwide, it's a great thing.