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Ford Inventory Discussion


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10 minutes ago, tbone said:

Wow, the situation is incredible.  I’ve never seen anything quite like it. And it isn’t just the auto industry that’s a mess either.  Many shortages everywhere it seems like.  

 

The big jump in demand for computers, consumer electronics, appliances, etc. took up the microchip supply when automotive demand plummeted and now there just isn't enough production available to supply the chips. Add in the fire at a major Japanese plant that supplies microchips to Ford and the mess got only worse until that plant can get back to full production in the next few months. 

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16 hours ago, ice-capades said:

Ford Dealers just completed their June wholesale allocation commitments. Let's just say that the inventory situation is going to get a lot worse before it gets better. Total allocation for one dealership... 2 Bronco's & 5 Bronco Sports. No allocation for any other vehicle lines! For example... (1) 2021MY Mustang EcoBoost Fastback Premium in stock, (1) unscheduled retail Mustang GT Convertible Premium that will be scheduled for production the week of 07/19/2021 or 07/26/2021. So the store has 1 Mustang in stock and won't see allocation again for a stock unit until August production... there goes the Mustang season! The store would usually have at least 6 Mustangs in stock, mostly GT's and others either scheduled or in transit. 

 

Wow, that's a tough situation ice-capades sir. I worry about dealership employees whose compensation plan is mostly or entirely commission based. As both new car and used car inventories dwindle, it must be scary for them thinking about what will happen to their paychecks in the months to come when there's so little to sell.

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2 hours ago, ice-capades said:

 

The big jump in demand for computers, consumer electronics, appliances, etc. took up the microchip supply when automotive demand plummeted and now there just isn't enough production available to supply the chips. Add in the fire at a major Japanese plant that supplies microchips to Ford and the mess got only worse until that plant can get back to full production in the next few months. 

 

The microprocessor market on the high end has been a shit show for years now. Any new launch of a GPU (video card) has been a "paper launch" and cryptocurrency (since they are good at finding hashes that "make" cryptocurrency) has made it even worse making it next to impossible to get a new video card.

 

A high end GPU was around $800-1200 about two years ago...the prices have doubled or tripled since then. 

 

The whole microprocessor market is a shit show and I'm betting that it won't get any better till more fabs get spun up and that is a long process. We finally might see stock levels for GPUs in 2 years, if we are lucky. 

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23 hours ago, ice-capades said:

Ford Dealers just completed their June wholesale allocation commitments. Let's just say that the inventory situation is going to get a lot worse before it gets better. Total allocation for one dealership... 2 Bronco's & 5 Bronco Sports. No allocation for any other vehicle lines! For example... (1) 2021MY Mustang EcoBoost Fastback Premium in stock, (1) unscheduled retail Mustang GT Convertible Premium that will be scheduled for production the week of 07/19/2021 or 07/26/2021. So the store has 1 Mustang in stock and won't see allocation again for a stock unit until August production... there goes the Mustang season! The store would usually have at least 6 Mustangs in stock, mostly GT's and others either scheduled or in transit. 


I heard from a friend of mine that FRAP isn't on the list of plants to reopen any time soon. Not sure how true that is but I can believe it. 

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5 minutes ago, fuzzymoomoo said:


I heard from a friend of mine that FRAP isn't on the list of plants to reopen any time soon. Not sure how true that is but I can believe it. 

 

I wouldn't be surprised either. If the overall production cuts are as deep as the forecasts for the next 3 months are longer, the first priority will be to supply enough microchips to F-Series production in order to maintain both profits and sales leadership.  

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1 hour ago, ice-capades said:

 

I wouldn't be surprised either. If the overall production cuts are as deep as the forecasts for the next 3 months are longer, the first priority will be to supply enough microchips to F-Series production in order to maintain both profits and sales leadership.  


This is way above my pay grade so this is kind of an educated guess but from what I can tell, Dearborn Truck is Priority A1, then MAP, then Kentucky Truck, then the Mexico plants.  Everything else is they'll get to it when they get to it. 

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3 minutes ago, fuzzymoomoo said:

This is way above my pay grade so this is kind of an educated guess but from what I can tell, Dearborn Truck is Priority A1, then MAP, then Kentucky Truck, then the Mexico plants.  Everything else is they'll get to it when they get to it. 

 

Thanks! I think your assessment makes sense. 

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7 hours ago, silvrsvt said:

 

The microprocessor market on the high end has been a shit show for years now. Any new launch of a GPU (video card) has been a "paper launch" and cryptocurrency (since they are good at finding hashes that "make" cryptocurrency) has made it even worse making it next to impossible to get a new video card.

 

A high end GPU was around $800-1200 about two years ago...the prices have doubled or tripled since then. 

 

The whole microprocessor market is a shit show and I'm betting that it won't get any better till more fabs get spun up and that is a long process. We finally might see stock levels for GPUs in 2 years, if we are lucky. 

Here's an article on how the huge run up in cryptocurrencies, with bitcoin mining surging, has been part of the problem. 

 

https://finance.yahoo.com/news/bitcoin-mining-adds-existing-shortage-120348278.html

"Chips are indispensable in so many devices and industries – think about laptops, smartphones, TVs, or cars. The semiconductor industry has already been struggling with supply chain disruptions caused by the COVID-19 pandemic, the winter storm in Texas, and fires at factory sites. But Bitcoin mining is putting even more pressure on the chip market, creating an additional shortage and boosting the price of chips.

 

"The profitability of mining depends on the cryptocurrency’s price, which has rallied for the last few months, surging well above the 2017 peak. The huge competition among miners is prompting an increasing demand for advanced chips. This results in a price boom for chips and thus affects the other industries relying on semiconductors."

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11 minutes ago, Gurgeh said:

"The profitability of mining depends on the cryptocurrency’s price, which has rallied for the last few months, surging well above the 2017 peak. The huge competition among miners is prompting an increasing demand for advanced chips. This results in a price boom for chips and thus affects the other industries relying on semiconductors."

 

As a sidenote, I'm surprised that governments haven't clamped down on cryptocurrency yet. Things could get really bad for fiat based currencies which would cause turmoil with financal markets. 

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1 hour ago, fuzzymoomoo said:


Nancy Pelosi wants every currency to shift to a digital currency. 

Would think government wouldn't want crypto currency. Too easy to hide assets. Let's see the IRS get bitcoin records wherever they are.

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This crisis is an incredible opportunity for Ford- For decades the sales model has been to waste ten or so million dollar acres of prime retail property to store new cars so the customer can sign and leave with a new vehicle before they do due diligence just so the factories can keep running. To continue that stupidity, we build vehicless for inventory first and figure out how to sell them later, to the point where Ford has at times had a million unsold vehicles in the system, plus the downside financial risk of millions of vehicles that Ford has leased and financed. There has to be a better way...

 

How about offering enough incentives for customer orders that they can order a car for less $$$ than buying a heavily rebated one that's wasted lot space and tied up capital for months?   Do the same thing with used, with many trades going almost straight through reconditioning to a new owner as the online dealers are increasingly doing.  And all that prime acreage on high traffic roads? Profitably lease it out, maybe even a Ford themed restaurant or accessories store. Save the back lot for service and employee parking, but cut down on that space by reducing wait times for parts orders and employee van pooling- We make great vans and minibuses, don't we?

 

Ford is starting to figure it out- Being big in the fleet biz they've been offering good BTO deals to them forever, and the $500 rebate for retail customer orders is a start. But so many dealers who can't think farther out than end of month don't get it and see this as a chance to virtually auction off the dwindling inventory of new vehicles for inflated prices while demanding list price for a customer ordered vehicle... Next month and maybe for a few more months they'll have little or no new vehicles to make those absurd profits on. I speak from personal experience as a shareholder and customer- I've been "stalking" Transit Connect wagons for over a year now and there's currently at least 10 with the options I want (XLT or higher trim with trailer tow package) within 250 miles but the only discount off MSRP is the $1000-1750 rebates, and only the $500 rebate if I order one that won't arrive until at least September. That puts the price over $30k, at that price I may as well get a cheaper mopar minivan or spend another $5-10k and get a Toyota Sienna that beats the Transit Connect by 9-10 MPG and offers AWD to boot. Millions of customers like me are making the same decisions, and most don't have near enough blind "brand loyalty" to order a $50,000 pickup at a mere $500 off MSRP with no build date.

 

Ford and dealers, you can do better...

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1 hour ago, GearheadGrrrl said:

This crisis is an incredible opportunity for Ford- For decades the sales model has been to waste ten or so million dollar acres of prime retail property to store new cars so the customer can sign and leave with a new vehicle before they do due diligence just so the factories can keep running. To continue that stupidity, we build vehicless for inventory first and figure out how to sell them later, to the point where Ford has at times had a million unsold vehicles in the system, plus the downside financial risk of millions of vehicles that Ford has leased and financed. There has to be a better way...

 

How about offering enough incentives for customer orders that they can order a car for less $$$ than buying a heavily rebated one that's wasted lot space and tied up capital for months?   Do the same thing with used, with many trades going almost straight through reconditioning to a new owner as the online dealers are increasingly doing.  And all that prime acreage on high traffic roads? Profitably lease it out, maybe even a Ford themed restaurant or accessories store. Save the back lot for service and employee parking, but cut down on that space by reducing wait times for parts orders and employee van pooling- We make great vans and minibuses, don't we?

 

Ford is starting to figure it out- Being big in the fleet biz they've been offering good BTO deals to them forever, and the $500 rebate for retail customer orders is a start. But so many dealers who can't think farther out than end of month don't get it and see this as a chance to virtually auction off the dwindling inventory of new vehicles for inflated prices while demanding list price for a customer ordered vehicle... Next month and maybe for a few more months they'll have little or no new vehicles to make those absurd profits on. I speak from personal experience as a shareholder and customer- I've been "stalking" Transit Connect wagons for over a year now and there's currently at least 10 with the options I want (XLT or higher trim with trailer tow package) within 250 miles but the only discount off MSRP is the $1000-1750 rebates, and only the $500 rebate if I order one that won't arrive until at least September. That puts the price over $30k, at that price I may as well get a cheaper mopar minivan or spend another $5-10k and get a Toyota Sienna that beats the Transit Connect by 9-10 MPG and offers AWD to boot. Millions of customers like me are making the same decisions, and most don't have near enough blind "brand loyalty" to order a $50,000 pickup at a mere $500 off MSRP with no build date.

 

Ford and dealers, you can do better...

 

I get what you're saying, and it's definitely an interesting thought, but I think you're vastly overestimating people thinking ahead on a vehicle purchase.  Most people don't even sit and look for a particular one/option ranges and search and search until they find one, let alone order one.  They drive to the dealer and drive one "I want this model" and buy it and leave without caring what it has.

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4 hours ago, GearheadGrrrl said:

This crisis is an incredible opportunity for Ford- For decades the sales model has been to waste ten or so million dollar acres of prime retail property to store new cars so the customer can sign and leave with a new vehicle before they do due diligence just so the factories can keep running. To continue that stupidity, we build vehicless for inventory first and figure out how to sell them later, to the point where Ford has at times had a million unsold vehicles in the system, plus the downside financial risk of millions of vehicles that Ford has leased and financed. There has to be a better way...

 

How about offering enough incentives for customer orders that they can order a car for less $$$ than buying a heavily rebated one that's wasted lot space and tied up capital for months?   Do the same thing with used, with many trades going almost straight through reconditioning to a new owner as the online dealers are increasingly doing.  And all that prime acreage on high traffic roads? Profitably lease it out, maybe even a Ford themed restaurant or accessories store. Save the back lot for service and employee parking, but cut down on that space by reducing wait times for parts orders and employee van pooling- We make great vans and minibuses, don't we?

 

Ford is starting to figure it out- Being big in the fleet biz they've been offering good BTO deals to them forever, and the $500 rebate for retail customer orders is a start. But so many dealers who can't think farther out than end of month don't get it and see this as a chance to virtually auction off the dwindling inventory of new vehicles for inflated prices while demanding list price for a customer ordered vehicle... Next month and maybe for a few more months they'll have little or no new vehicles to make those absurd profits on. I speak from personal experience as a shareholder and customer- I've been "stalking" Transit Connect wagons for over a year now and there's currently at least 10 with the options I want (XLT or higher trim with trailer tow package) within 250 miles but the only discount off MSRP is the $1000-1750 rebates, and only the $500 rebate if I order one that won't arrive until at least September. That puts the price over $30k, at that price I may as well get a cheaper mopar minivan or spend another $5-10k and get a Toyota Sienna that beats the Transit Connect by 9-10 MPG and offers AWD to boot. Millions of customers like me are making the same decisions, and most don't have near enough blind "brand loyalty" to order a $50,000 pickup at a mere $500 off MSRP with no build date.

 

Ford and dealers, you can do better...

So basically you just described a factory direct business model. Except for service alone-who needs dealers? 

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More "dealer light" than factory direct- Still need a local retailer to offer test drives, handle trade ins, etc.. But if you look at how the "friction" of cost drivers in other areas of business and how retailers that add another layer of cost without commensurate value have been driven out of those market, the days of the dealer that adds little value to the vehicle are numbered.

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8 minutes ago, GearheadGrrrl said:

More "dealer light" than factory direct- Still need a local retailer to offer test drives, handle trade ins, etc.. But if you look at how the "friction" of cost drivers in other areas of business and how retailers that add another layer of cost without commensurate value have been driven out of those market, the days of the dealer that adds little value to the vehicle are numbered.


Dealers cater to what customers want and at least 90% of them (probably more) do not want to order and wait regardless of incentives.

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6 hours ago, GearheadGrrrl said:

This crisis is an incredible opportunity for Ford- For decades the sales model has been to waste ten or so million dollar acres of prime retail property to store new cars so the customer can sign and leave with a new vehicle before they do due diligence just so the factories can keep running. To continue that stupidity, we build vehicless for inventory first and figure out how to sell them later, to the point where Ford has at times had a million unsold vehicles in the system, plus the downside financial risk of millions of vehicles that Ford has leased and financed. There has to be a better way...

 

How about offering enough incentives for customer orders that they can order a car for less $$$ than buying a heavily rebated one that's wasted lot space and tied up capital for months?   Do the same thing with used, with many trades going almost straight through reconditioning to a new owner as the online dealers are increasingly doing.  And all that prime acreage on high traffic roads? Profitably lease it out, maybe even a Ford themed restaurant or accessories store. Save the back lot for service and employee parking, but cut down on that space by reducing wait times for parts orders and employee van pooling- We make great vans and minibuses, don't we?

 

Ford is starting to figure it out- Being big in the fleet biz they've been offering good BTO deals to them forever, and the $500 rebate for retail customer orders is a start. But so many dealers who can't think farther out than end of month don't get it and see this as a chance to virtually auction off the dwindling inventory of new vehicles for inflated prices while demanding list price for a customer ordered vehicle... Next month and maybe for a few more months they'll have little or no new vehicles to make those absurd profits on. I speak from personal experience as a shareholder and customer- I've been "stalking" Transit Connect wagons for over a year now and there's currently at least 10 with the options I want (XLT or higher trim with trailer tow package) within 250 miles but the only discount off MSRP is the $1000-1750 rebates, and only the $500 rebate if I order one that won't arrive until at least September. That puts the price over $30k, at that price I may as well get a cheaper mopar minivan or spend another $5-10k and get a Toyota Sienna that beats the Transit Connect by 9-10 MPG and offers AWD to boot. Millions of customers like me are making the same decisions, and most don't have near enough blind "brand loyalty" to order a $50,000 pickup at a mere $500 off MSRP with no build date.

 

Ford and dealers, you can do better...

 

I like your suggestions GearheadGrrl ma'am. They have great potential for cost savings that benefit automakers, dealers, and consumers.

 

However, in the U.S. there is a unfortunate tendency of new car customers to reject the "sold order" approach. Automotive News wrote an article about this 5 years ago. Sadly not much has changed since then. Maybe the shortages of new cars right now will cause consumers to change their mind and embrace the approach you mentioned? Why Americans reject build-to-order cars (autonews.com)

 

"Forget the high cost of meeting new fuel economy standards or those massive investments needed for autonomous vehicles. The biggest drain on automaker profitability in the U.S. may be the legendary impatience of American car buyers.

In 2015, less than 5 percent of new vehicles sold in the U.S. were built to customer order, according to the National Automobile Dealers Association. In Europe, the number was about 50 percent.

For U.S. dealers, that means thousands of dollars in extra floorplan expenses. For automakers, it means huge advertising and incentive costs for each unsold vehicle sitting in inventory, waiting for a buyer."

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Not sure if it’s just typical downtime on the A/X/Z site but every vehicle is showing as N/A for pricing. Also a few dealerships I checked around Metro Detroit that normally list the plan prices just show sticker price. 
 

Is Ford is suspending AXZ sales with the inventory problem?

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18 minutes ago, jasonj80 said:

Not sure if it’s just typical downtime on the A/X/Z site but every vehicle is showing as N/A for pricing. Also a few dealerships I checked around Metro Detroit that normally list the plan prices just show sticker price. 
 

Is Ford is suspending AXZ sales with the inventory problem?

 

At least a month ago, they weren't.  Just picked up a new Bronco Sport.  No problem getting it on Z Plan.  

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17 minutes ago, jasonj80 said:

Not sure if it’s just typical downtime on the A/X/Z site but every vehicle is showing as N/A for pricing. Also a few dealerships I checked around Metro Detroit that normally list the plan prices just show sticker price. 
 

Is Ford is suspending AXZ sales with the inventory problem?

 

It sounds more like a glitch in the pricing matrix distributed to one or more of the hosts for the Ford dealership websites. In addition, Ford would have to notify dealerships of any changes in the AXZD Plan programs and there have been none. 

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11 minutes ago, mackinaw said:

 

At least a month ago, they weren't.  Just picked up a new Bronco Sport.  No problem getting it on Z Plan.  


Actually why I logged in today to look at pricing, family member is thinking of getting a BS very soon and was going to search some inventory. Logged in yesterday and it was fine, today got nothing. 

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2 hours ago, akirby said:

Dealers cater to what customers want and at least 90% of them (probably more) do not want to order and wait regardless of incentives.

 

I did read someplace a few weeks back that customer orders are way up.  Wish I could find the link, but it appears that some would-be buyers are content to order a vehicle and wait.

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58 minutes ago, mackinaw said:

 

I did read someplace a few weeks back that customer orders are way up.  Wish I could find the link, but it appears that some would-be buyers are content to order a vehicle and wait.


That's because nobody has anything in stock for someone to just walk in and leave with. 

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27 minutes ago, fuzzymoomoo said:


That's because nobody has anything in stock for someone to just walk in and leave with. 

 

My dealership has about twice as many retail F-Series (F-150 & Super Duty) orders than usual but an average number of retail factory orders for the other vehicle lines. 

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