The Ford (F) Ranger Splash–sometimes shortened to “Ford Splash”–was once described as a “lifestyle pickup,” a pickup truck that was geared more for use as a daily driver than a heavy hauler. Sure, it could be used to help your friends move without a second thought, but moving tons of gravel would be a bigger challenge. And back when the Splash came out, back in the 1990s, it filled a market niche. A similar market niche, too, to the one that is going largely unfilled right now.
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The Splash was a smaller truck, which means making it now requires fewer materials to make. This tends to mean more of them can be made, and faster than the larger equivalents like the F-150. And with fewer materials required to make them, Ford can charge less because there is less expense going into the Splash’s manufacture. This could be the way Ford addresses several of its problems right now all at once.
Ford can meet demand for pickups by producing Splashes in job lots. It can meet the customer’s call for lower-cost cars at his or her level by offering the lower-cost pickup. And, since Ford has pulled back on its electric vehicle ambitions, it has entire electric production lines that can be consolidated to open up more gas engine truck production. Or, conversely, it can use the smaller, lighter-weight pickup as the basis for a new line of electric vehicles that straddle the line between “ecologically friendly” and “pickup capable” vehicles.
The Problem at the Bottom of that Hole
However, the Ford Splash may not solve all of Ford’s problems here. While certainly, Ford has production lines that could be retooled to bring back the Splash, it would be bringing the Splash back into a vastly different market from that of the 1990s. It is not immediately clear how well the customer of 2025 would react to the proposition of buying a car similar to one found roughly 30 years ago. Some resistance may remain; the customer of 2025 is different from the customer of 1990. But a study from Road and Track back in April revealed that there is clear demand for a small pickup, so any lingering doubts might be removed altogether.
And, despite the fact that Ford could retool a production line to make Splashes, the uncertainty involved is a potential sunk cost. Ford would be, effectively, chasing a pig in a poke. Granted, a certain amount of market research could help settle this point before taking any radical course of action. And we also know that certain market demands are fairly universal; cheap, reliable transportation is generally on someone’s list of things to buy no matter what the calendar says. With Ford slowing down on its electric vehicle ambitions, there may be excess capacity in the system that would allow for what amounts to a “new” model Ford: a small “lifestyle” pickup, potentially in gas, electric, or even both.
But the key takeaway here is that, for Ford, bringing back the Splash could be an excellent idea in the making. Ford already has the property. It refiled a trademark not too long ago, which got people wondering about bringing back the Splash to begin with. There is a substantial market niche out there for an inexpensive pickup truck; pickup buyers have been stymied before when trying to buy because supplies have been an issue. The supply that is available is commonly huge and expensive. So the Splash could satisfy demand for pickups, for affordable pickups, and for smaller pickups that are easier for the customer in terms of care and feeding. Thus, bringing back the Splash is an idea with substantially more pluses than minuses to its credit.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on three Buys, eight Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 7.19% rally in its share price over the past year, the average F price target of $10.77 per share implies 8.5% downside risk.
