Bloomberg: Ford to Idle Four Factories as Slowing Sales Bloat Inventory

[rperez817]

 

Did you just create an account to post nothing but negative things about Ford?

 

No sir.

 

 

Or better yet why does he claim hes from Texas when his IP address says he's from Maryland?

 

My residence is Fort Worth, my work location during the week is Washington D.C. and hotel (where I am now) is in Maryland.

[rperez817]

To the moderators: I agreed to this site's Terms of Service http://www.blueovalforums.com/forums/index.php?app=forums&module=extras&section=boardrulesand have adhered to them since I joined.

Edited October 18, 2016 by rperez817

[Pioneer]

Regular cab and SuperCab are exclusive to KCAP

Wrong. Only thing exclusive to KCAP is 8ft bed.

[theDuff]

Wrong. Only thing exclusive to KCAP is 8ft bed.

Do they use other bed lengths at KCAP? I've been wondering that.

[RichardJensen]

Do they use other bed lengths at KCAP? I've been wondering that.

Wouldn't they have to?

 

I can't imagine that there's that much demand for 8' beds.

[fordmantpw]

Do they use other bed lengths at KCAP? I've been wondering that.

 

Yes they do.

 

Wouldn't they have to?

 

I can't imagine that there's that much demand for 8' beds.

 

Yeah, the market is pretty low for 8' bedded F150's.

Edited October 19, 2016 by fordmantpw

[jpd80]

rperez817, on 19 Oct 2016 - 05:20 AM, said:

If you look at the Days to Turn data at http://www.edmunds.c...ys-to-turn.html, that's what Ford did earlier this year. By July, Ford vehicles were in dealer inventory an average of over 90 days before being sold.

 

Ford had to idle those plants sooner or later before this situation got out of control.

No, you're getting confused, Inventory days supply number based on previous month's sales

is different to time to turn on dealers lots....there's a big difference....and it's not 90 days..

 

This time of year, there's a traditional easing back of sales, amplified by Ford doing more

fleet business in the first half of the year. I would consider a one week stoppage at only

one of the F150 plants (KCAP) as a minor redress on inventory level - about 8,000 trucks,

it's just enough to slow the 2017 fill rate to enable dealers to trade down the '16s for the

rest of this year (Ford's stated intention by Mark LaNeve in the September sales call)

Edited October 19, 2016 by jpd80

[Pioneer]

Do they use other bed lengths at KCAP? I've been wondering that.

KCAP makes everything DTP does except Raptor.

[630land]

A slow down is happening overall, and I agree with Autoextremist site this week:

 

"Some companies seem to have a handle on it, you can see Ford making moves now, temporarily shutting production to keep inventory aligned with the sell rate".

 

Some just like to scream 'fire' and exaggerate, period. Demanding 'all new whatever' or "bring back personal lux coupes/station wagons/Panther/Pinto'.

 

Do they really expect sales increases going to infinity? "Poor sales" my a%%%!

Edited October 19, 2016 by 630land

[jpd80]

This is Ford controlling inventory size BEFORE it becomes a problem.

It's a slight trim, a touch of the brakes to steady the ship as it goes into slower sales month.

Most of the affected Ford plants are running three shifts, so stead of costly line re-balancing,

a one week idle gets the job done nicely and allows those plants to do some maintenance.

 

I am surprised that GM seems less affected at the moment but perhaps the slow down in sales

will arrive at different times for different companies, GM may simply see a quicker drop later in the year..

[fuzzymoomoo]

Historically, GM has always been in denial about a slowdown until it's much too late.

[akirby]

Historically, GM has always been in denial about a slowdown until it's much too late.

 

The proof will be inventory levels, incentive spending and profits over the next 2 quarters.

[jpd80]

and that's when fleet sales come back to Ford and retail buyers ease off for GM.

This is going to be an interesting time for both manufacturers, both have very

different plays coming up and I wonder if Ford might find much needed revenue

and sales with those commercial and daily rental fleet sales coming back early

next year...

 

I see Ford coming in for a soft landing where GM may see sales fall off a cliff if it doesn't add big incentives..

I think the net result will be returns similar to what Ford achieves with its heavier mix of fleet sales...

 

We've only seen new GM in rising markets and good times but how well can they navigate tougher sales times..

Edited October 19, 2016 by jpd80

[fordmantpw]

The biggest question I think is what happens to Ford when GM greatly increases the incentives to clear out the inventory. Do Ford sales plummet due to being a few thousand dollars higher than GM products? Or will Ford be able to retain enough sales to maintain profitability?

[pictor]

So, what you are saying, what GM loses on each sale, they make up with volume.

[rperez817]

So, what you are saying, what GM loses on each sale, they make up with volume.

 

In Q2 2016, GM did the opposite. # of units sold was down slightly (-0.1%), but net income was up a lot (+157%). https://www.gm.com/content/dam/gm/mol/docs/GM-2016-Q2-Press-Release-and-Highlights.pdf, http://media.gm.com/content/dam/Media/gmcom/investor/2016/jul/earnings/GM-Global-Sales-Q2-and-H1-2016.pdf

 

I agree with akirby's post above about results for Q3 and Q4, let's see if GM can maintain its momentum. Q3 results will come out next week.

Edited October 19, 2016 by rperez817

[fordmantpw]

So, what you are saying, what GM loses on each sale, they make up with volume.

 

Sort of. What I'm saying is what GM does to pick up volume in an attempt to make up for what they lose for each sale, Ford loses even bigger in volume by not matching incentives. So, GM has a whammy by dropping profit/vehicle, but Ford loses volume by having higher prices, and profit because their numbers drop even more. A double-whammy for Ford. It's been proven that more sales doesn't mean more profit, but too few sales can be just as bad. Let's just hope there are enough Ford customers that see the value of the Ford over the GM and are willing to pay the extra.

[jpd80]

The biggest question I think is what happens to Ford when GM greatly increases the incentives to clear out the inventory. Do Ford sales plummet due to being a few thousand dollars higher than GM products? Or will Ford be able to retain enough sales to maintain profitability?

But that's just the point, we're not seeing the massive discounts across the board,

it's a methodical orchestrated sell down of 2016 models.

 

Ford is deliberately running long on 2016 F150 and slowing supply of 2017s

to ensure the inventory is balanced at the end of the year so currently we see

Ford offering incentives on 2016 F150 against GM and Ram's 2017 models.

[fordmantpw]

But that's just the point, we're not seeing the massive discounts across the board,

it's a methodical orchestrated sell down of 2016 models.

 

Ford is deliberately running long on 2016 F150 and slowing supply of 2017s

to ensure the inventory is balanced at the end of the year so currently we see

Ford offering incentives on 2016 F150 against GM and Ram's 2017 models.

 

But I'm looking at 6, 8, 12 months out when GM has a huge glut of vehicles and tries to move them by adding 3, 4, 5k in incentives.

[jpd80]

 

But I'm looking at 6, 8, 12 months out when GM has a huge glut of vehicles and tries to move them by adding 3, 4, 5k in incentives.

You may be right.

The next two or three months will give us a glimpse as to whether GM has a problem with slowing sales.

I kinda expect GM to trade their way through winter with higher incentives and still crow about retail sales.

 

It may be a smart ploy to do that as opposed to going back to chasing more fleet sales but if retail buyers

do go off the bite, I think that everyone will be feeling the pinch from here to March and beyond.

[Harley Lover]

Ford's marketshare will certainly decline significantly over the next few years but they should be able to recover or even grow once they are in the right segments. We are seeing that with Chevy right now, it took them long enough but they finally have the right portfolio for rapid growth and should easily take sales leadership during Ford's drought.

 

So far in 2016, this assertion is not borne out by facts. I posted this elsewhere, it's worth repeating here: From Automotive News, "Only Ford has grown market share among the big 3 brands, Toyota has lost 1.1% and Chevrolet has lost 4% market share (through September 2016)."

 

That's not to say that future developments might go in a different direction, but the measured results are as stated above.

Edited October 21, 2016 by Harley Lover

[rperez817]

 

So far in 2016, this assertion is not borne out by facts. I posted this elsewhere, it's worth repeating here: From Automotive News, "Only Ford has grown market share among the big 3 brands, Toyota has lost 1.1% and Chevrolet has lost 4% market share (through September 2016)."

 

That's not to say that future developments might go in a different direction, but the measured results are as stated above.

 

GM announced last year they would dramatically reduce fleet sales well into 2016. They did, and the decision impacted Chevy most. That's a major reason for Chevy's loss of market share this year. Ford and Toyota didn't experience similar reductions in fleet sales.

[RichardJensen]

 

GM announced last year they would dramatically reduce fleet sales well into 2016. They did, and the decision impacted Chevy most. That's a major reason for Chevy's loss of market share this year. Ford and Toyota didn't experience similar reductions in fleet sales.

 

Imagine the housing bubble c. 2006. Imagine what analysts would've said about a bank that stopped aggressively marketing mortgages, that raised underwriting standards and saw loan originations drop while other banks saw theirs continue to increase.

 

Imagine what analysts would have said, in 2006, about such a bank.

[rperez817]

 

Imagine the housing bubble c. 2006. Imagine what analysts would've said about a bank that stopped aggressively marketing mortgages, that raised underwriting standards and saw loan originations drop while other banks saw theirs continue to increase.

 

Imagine what analysts would have said, in 2006, about such a bank.

 

Ok, I don't have much experience with traditional banks though, I've always used credit unions for banking services including the mortgage on my home. Do you have examples of banks like you described?

 

Not sure though how the housing and mortgage markets in 2006 relate to Ford idling factories in 2016, or Ford's, Chevy's, and Toyota's 2016 market shares in the car market.

[rmc523]

 

Ok, I don't have much experience with traditional banks though, I've always used credit unions for banking services including the mortgage on my home. Do you have examples of banks like you described?

 

Not sure though how the housing and mortgage markets in 2006 relate to Ford idling factories in 2016, or Ford's, Chevy's, and Toyota's 2016 market shares in the car market.

 

His point was that what if a bank had "batten down the hatches" so to speak before a downturn and was prepared for it to happen and wasn't put in a position to collapse because of that. That's what Ford is doing now.....a downturn is predicted (the degree of which we obviously don't know), but they're preparing now for it to be in a stronger position when it does arrive. As opposed to other companies which will have to panic and take more drastic measures when it arrives and catches them off guard.