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Light at the end of the chip shortage.....hope this is true....


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1 hour ago, HotRunrGuy said:

 

As has been explained many times, Ford does not sell direct, they sell their products to their dealers. So, other than the elimination of rebates and PCO's, how is Ford directly benefiting from higher ATP's?  Isn't it the dealerships that are benefiting from selling at MSRP or adding ADM's?   Or is Ford raising the invoice prices that the dealers pay for the vehicle?

 

HRG

 

Ford doesn't have to pay for incentives?

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6 minutes ago, rmc523 said:

 

Ford doesn't have to pay for incentives?

 

I'm sure they do.  But my point is, in the current market, once you eliminate the rebates back to the customers, how are these higher transaction prices benefiting Ford?  Aren't they still selling to their dealers at invoice?

 

HRG

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9 minutes ago, HotRunrGuy said:

 

I'm sure they do.  But my point is, in the current market, once you eliminate the rebates back to the customers, how are these higher transaction prices benefiting Ford?  Aren't they still selling to their dealers at invoice?

 

HRG


They did raise prices by several hundred dollars on a lot of vehicles.  And cancelling rebates can be huge.  Some F150s average had $6k or higher.

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1 hour ago, akirby said:


They did raise prices by several hundred dollars on a lot of vehicles.  And cancelling rebates can be huge.  Some F150s average had $6k or higher.

 

Rebates on Escape used to be $4500+, but now it's pretty much sticker around here anyway. Big incentives on Ecosport are gone also. Everything is sticker or higher now. No wonder Ford is giving new earnings guidance that points to much higher profit margins. 

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2 hours ago, HotRunrGuy said:

 

I'm sure they do.  But my point is, in the current market, once you eliminate the rebates back to the customers, how are these higher transaction prices benefiting Ford?  Aren't they still selling to their dealers at invoice?

 

HRG

 

I don't understand what you're not understanding?

 

Which is better for Ford?

 

40k invoice price (what dealer pays Ford)

40k to Ford

 

OR

 

40k invoice price (what dealer pays Ford)

-6k incentives (that Ford's paying)

34k to Ford

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43 minutes ago, rmc523 said:

 

I don't understand what you're not understanding?

 

Which is better for Ford?

 

40k invoice price (what dealer pays Ford)

40k to Ford

 

OR

 

40k invoice price (what dealer pays Ford)

-6k incentives (that Ford's paying)

34k to Ford

 

Nevermind.  The point I was trying to make is that the reported transaction prices are also higher because dealers, due to a lack of inventory, are also selling vehicles at MSRP or greater.  Tell me if I'm wrong, but I would expect that reported transaction prices are the retail prices the customers are paying, not the invoice values the dealers are paying.

 

HRG

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41 minutes ago, HotRunrGuy said:

 

Nevermind.  The point I was trying to make is that the reported transaction prices are also higher because dealers, due to a lack of inventory, are also selling vehicles at MSRP or greater.  Tell me if I'm wrong, but I would expect that reported transaction prices are the retail prices the customers are paying, not the invoice values the dealers are paying.

 

HRG

 

I get what you are saying......BS is going for at least $5,000 over sticker in some cases. and some are saying Bronco will be priced by dealers at least $10,000 over sticker. Dealer adjustment prices are nothing new. Ford Credit will make more because of larger loan amounts to finance these bloated prices. Subaru, Mazda, and Honda dealers have been playing the desler adjustment game for years. 

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1 hour ago, HotRunrGuy said:

 

Nevermind.  The point I was trying to make is that the reported transaction prices are also higher because dealers, due to a lack of inventory, are also selling vehicles at MSRP or greater.  Tell me if I'm wrong, but I would expect that reported transaction prices are the retail prices the customers are paying, not the invoice values the dealers are paying.

 

HRG

 

Yeah, correct.  But Ford benefits from not having to add incentives.

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1 hour ago, HotRunrGuy said:

 

Nevermind.  The point I was trying to make is that the reported transaction prices are also higher because dealers, due to a lack of inventory, are also selling vehicles at MSRP or greater.  Tell me if I'm wrong, but I would expect that reported transaction prices are the retail prices the customers are paying, not the invoice values the dealers are paying.

 

HRG


For Pete’s sake - it’s all 3.  No dealer discounts.  No factory rebates.  Invoice price increase.Ford benefits from the last 2.

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https://www.yahoo.com/news/taiwan-chipmakers-keep-workers-imprisoned-145003220.html

 

 

Can't say Taiwan isn't trying to alleviate the shortage. I tend to believe this report. Set up an operation in Taiwan related to electronics. The boss called the shots. 24 hr workday, while rare, did happen. On the plus side, they did provide a bento box lunch every day and ramen noodles for late night meal break. 

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  • 3 weeks later...

Not exactly new news but ...

 

I just read that the world's largest integrated circuit  (chip) manufacturer is Taiwan Semiconductor Manufacturing Company (TSMC).  They have already agreed to built a very large manufacturing facility in AZ, BUT full production will likely not be until 2024 !

 

TSMC has many customers, but most notably is Apple.  Apple is willing to pay what ever is required to keep their position of first in line.

 

The various electronic modules used in Ford products include 100's of different chip from very simple to very complex.  I am sure that they come from many different manufacturers.

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Good news, perhaps the proverbial corner is close to being turned: 

7/15/2021: Carmakers can expect a sharp upturn in chip supplies in the coming weeks, Taiwan Semiconductor Manufacturing Company (TSMC) said, signaling that a global shortage may have moved past its most crippling stage.

In the first six months of 2021, TSMC increased its output of micro-controlling units, an important component used for car electronics, by 30 per cent compared with the same period last year, the world’s largest contract chipmaker told investors on an earnings call on Thursday. MCU production is expected to be 60 percent higher for the full year than in 2020, it added.

 

“By taking such actions, we expect the shortage to be greatly reduced for TSMC customers starting this quarter,” said CC Wei, TSMC’s chief executive.

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Last article I read is that Ford now is going to ship vehicles to dealers without chips in order to fill their lots with new vehicles. That way prospective customers can at least see the vehicles in person and st least will stop in and look. And later dealer techs will install the chips when they get them. Sounds like good plan to me. Nothing looks worse than dealership lots with no new vehicles.

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14 minutes ago, FordBuyer said:

Last article I read is that Ford now is going to ship vehicles to dealers without chips in order to fill their lots with new vehicles. That way prospective customers can at least see the vehicles in person and st least will stop in and look. And later dealer techs will install the chips when they get them. Sounds like good plan to me. Nothing looks worse than dealership lots with no new vehicles.

 

Yes sir FordBuyer, Car and Driver wrote an article today that confirms what you mentioned. Report: Ford Might Ask Dealers to Install Chips in Unfinished Cars (caranddriver.com)

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1 hour ago, FordBuyer said:

Last article I read is that Ford now is going to ship vehicles to dealers without chips in order to fill their lots with new vehicles. That way prospective customers can at least see the vehicles in person and st least will stop in and look. And later dealer techs will install the chips when they get them. Sounds like good plan to me. Nothing looks worse than dealership lots with no new vehicles.


It also means the dealer can target a limited supply of modules to whatever vehicles get purchased.  Smart way to handle it.

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55 minutes ago, FordBuyer said:

Last article I read is that Ford now is going to ship vehicles to dealers without chips in order to fill their lots with new vehicles. That way prospective customers can at least see the vehicles in person and st least will stop in and look. And later dealer techs will install the chips when they get them. Sounds like good plan to me. Nothing looks worse than dealership lots with no new vehicles.

 

Ford's floating the idea with some Dealers but haven't made any formal announcement yet. Initially it's a "PR" move, or a potential nightmare in the making. They'll never ship the chips inside the vehicles due to the tremendous theft potential. They'll have to deal with the logistics of identifying the vehicles that can be shipped and shipping the corresponding chips required and associated to the corresponding VIN number. And the odds are that Ford will reimburse dealerships for less than the required time or expense to install chips at the dealership level. We'll just have to see how this plays out. Further adventures to follow! 

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10 minutes ago, ice-capades said:

 

Ford's floating the idea with some Dealers but haven't made any formal announcement yet. Initially it's a "PR" move, or a potential nightmare in the making. They'll never ship the chips inside the vehicles due to the tremendous theft potential. They'll have to deal with the logistics of identifying the vehicles that can be shipped and shipping the corresponding chips required and associated to the corresponding VIN number. And the odds are that Ford will reimburse dealerships for less than the required time or expense to install chips at the dealership level. We'll just have to see how this plays out. Further adventures to follow! 

It has disaster written all over this.   I MEAN REALLY THINK ABOUT THIS..............

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35 minutes ago, ice-capades said:

 

Ford's floating the idea with some Dealers but haven't made any formal announcement yet. Initially it's a "PR" move, or a potential nightmare in the making. They'll never ship the chips inside the vehicles due to the tremendous theft potential. They'll have to deal with the logistics of identifying the vehicles that can be shipped and shipping the corresponding chips required and associated to the corresponding VIN number. And the odds are that Ford will reimburse dealerships for less than the required time or expense to install chips at the dealership level. We'll just have to see how this plays out. Further adventures to follow! 

People haven’t thought this through, the logistics of shipping “dead vehicles” from holding yards  to

dealerships  is immense, it’s  not like you can turn a key and drive them on and off trains or trucks,

it just doesn’t make sense to do that 45,000 times with F Series let alone all the other dead vehicles

Ford has. It’s a logistical nightmare as is the thought of fitting chips to vehicles in holding yards before

transport……

Edited by jpd80
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17 minutes ago, CKNSLS said:

It has disaster written all over this.   I MEAN REALLY THINK ABOUT THIS..............

 

It's also a disaster to shut down plants for many weeks or fill up parking lots all over the state while dealerships have no new vehicles on lot. LAP has been shut down for 6 weeks. What does that do to a workforce and how does it affect fit and finish when a rusty worker comes back to the job. I imagine it means very slow start up speeds until workers can maximize skills again. Also, Ford is running out of space to store cars. Maybe a hybrid model where some vehicles are shipped to dealers without chips and others go to freed up space near plant in order for some dealers to be able to show new product.

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9 minutes ago, jpd80 said:

People haven’t thought this through, the logistics of shipping “dead vehicles” from holding yards  to

dealerships  is immense, it’s  not like you can turn a key and drive them on and off trains or trucks,

it just doesn’t make sense to do that 45,000 times with F Series let alone all the other dead vehicles

Ford has. It’s a logistical nightmare as is the thought of fitting chips to vehicles in holding yards before

transport……

 

Agreed. That's why I wrote my post. The logistics involved alone are enormous. 

Edited by ice-capades
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11 minutes ago, FordBuyer said:

 

It's also a disaster to shut down plants for many weeks or fill up parking lots all over the state while dealerships have no new vehicles on lot. LAP has been shut down for 6 weeks. What does that do to a workforce and how does it affect fit and finish when a rusty worker comes back to the job. I imagine it means very slow start up speeds until workers can maximize skills again. Also, Ford is running out of space to store cars. Maybe a hybrid model where some vehicles are shipped to dealers without chips and others go to freed up space near plant in order for some dealers to be able to show new product.

Don't disagree. But this has so many potential issues and all Ford has to do is mess up their best seller with both RAM and GM gaining market share. 

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7 minutes ago, CKNSLS said:

Don't disagree. But this has so many potential issues and all Ford has to do is mess up their best seller with both RAM and GM gaining market share. 

All Ford has to do is get chips and a couple of other supplies nailed

and they will be back to three shifts, maybe weekends too……

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33 minutes ago, jpd80 said:

All Ford has to do is get chips and a couple of other supplies nailed

and they will be back to three shifts, maybe weekends too……

 

Help me here-

I thought this whole thing stared because all the car makers really don't have an exclusive factory for their chips. These same factories make chips that go in game consoles, phones, tvs, etc.  It's not like these factories can just throw production runs over to another company-they have to balance out ALL THEIR (chip) CUSTOMERS as well.

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