'21 July Sales

[mackinaw]

1 hour ago, 2005Explorer said:

The whole idea that Ford can move to small volumes and raise their prices thousands over the mainstream competition and remain relevant as a major automaker in the future baffles me.

 

It's not just Ford, GM too.  From Automotive News:

 

"Speaking to Automotive News, GM CEO Mary Barra said the tighter inventories have had numerous advantages for dealers. With less stock to choose from, customers are more likely to pay closer to the vehicle’s original sticker price. The lower inventory also means reduced operating costs for dealerships through inventory insurance and floor plans, among other expenses."  “There’s a real opportunity to improve our business and improve the way we work with the dealers......"

[jpd80]

6 hours ago, 2005Explorer said:

At some point though volume definitely comes into play if you want to be a major automaker and not a boutique brand. You can price a Ford only so high before people will just go get an alternative brand for less that is just as good.
Ford has been pursuing this objective for the past ten years, this shows that buyers will follow if they see value.

 

Parts and raw material fabrication also becomes more and more expensive to source when it's only for a few vehicles. Also empty dealer lots isn't a good way to sell vehicles if other automakers have stocked lots. I understand why this is happening, but long term empty lots and low production is not a good strategy even if ATPs are higher. At some point you will drive the company into the ground if there is no supply and prices are not competitive for similar models from other automakers.

More profit per vehicle combined with fewer builds, the savings on input costs alone is bigger than all  the profits.

There’s a complex accounting game going on here and I don’t like the way Hackett hijacked Mulally’s right sizing

to market, he took that further in the direction of supply control adding to profit as a higher % of vehicle revenue.

In that circumstance, Ford could clearly sell more vehicles but those added vehicles carry less profit that drags

down those percentage numbers Hackett desired even though it would more total profit……….does my head in.

[FordBuyer]

Let's see......without a chip shortage, Ford could be selling every Bronco and Bronco Sport at sticker at full production. Explorer had a lot of momentum also that is all lost now. And the F150 Powerboost I'm sure would be going out the door in big numbers instead of sitting in a parking lot for months gathering dust and rust.

 

More than a few customers have probably bought Asian instead with 3 year leases and up to 7 year auto loans. Looks to me like Ford lost a ton of production in July and so far August doesn't look much better. So that is most of 3rd Quarter. Maybe 4th Quarter it will be more normal as far as production goes. Inventory maybe 6 months later. 

 

[JX1]

9 hours ago, 2005Explorer said:

At some point though volume definitely comes into play if you want to be a major automaker and not a boutique brand. You can price a Ford only so high before people will just go get an alternative brand for less that is just as good. Parts and raw material fabrication also becomes more and more expensive to source when it's only for a few vehicles. Also empty dealer lots isn't a good way to sell vehicles if other automakers have stocked lots. I understand why this is happening, but long term empty lots and low production is not a good strategy even if ATPs are higher. At some point you will drive the company into the ground if there is no supply and prices are not competitive for similar models from other automakers.

 

So well stated. That is why I cannot get with certain apologist excuses and remarks. I came home in a (Euro) Ford from the hospital a few decades ago and by chance despite not growing up with them later in life, I gravitated to the brand because of the product mix being consistently better than Chrysler and GM for me. (My general indifference to GM of course, is related to how they always feel like glorified rental cars to me.)

 

However, Ford is not the end all and be all. I tend to think that a chunk of posters (who often don't even work for Ford), are in a Ford bubble.. Yet those working for Ford and/or provide tangible insight on here, seem ironically more objective in many cases and willing to observe/admit to company weaknesses/strengths and suggest improvements. Blind partisanship, with no solid substance supporting a viewpoint, is tasteless.

 

7 hours ago, FordBuyer said:

 

It's a strategy into loss market share short term and irrelevancy long term as Ford will not be cross shopped anymore except for Ford diehards.

 

Ford is not Porsche and is still seen as the affordable brand for the common man except for some low volume specialty vehicles. Henry Ford has probably turned over in his grave more than a few times already.

 

After all, Ford is still known for its cheap, plasticky, rubbery interiors as every reviewer reminds us over and over again. Now they call it a "Fordy" interior.

 

 

Exactly, but it seems that some members here forget that and think everyone just loves the blue oval like we do. They tend to lose sight of that and in some cases, will browbeat it into others who think differently.

 

Makes posting uncomfortable for me at times or I just ignore them, because I don't champion obvious favoritism, plus detest even worse, blind partisanship to any given brand.

 

Only because of losing a well crafted typed response, I gave up on a point (w/evidence) I was making months ago regarding past Ford regimes and I didn't log in for a long time.

 

We all like the Ford brand here, but some of us need to wake up and smell the coffee.

 

Jim Hackett thought he could cut out lower margin product and replace it with higher margin models, to increase profit per unit.

 

In the short term, I believe it's working out. In the long term, Ford cannot try and position this brand at a level equivalent to being a half-step above Mercury or below Lincoln. As you said, not what Henry Ford desired.

 

The Bronco is a very nice, exquisite product, but the automotive "media" are already looking for any reason to castigate it. I am SICK of that BS, because I sat in my first example yesterday locally and it is great for what it is. Earlier this week, I saw my first example at a local grocery story. I was gobsmacked.

 

The 2-door Outer Banks I sat in yesterday, is luxurious enough and very well built for an outdoorsy utilitarian  vehicle. The U725 window motors are even the quietiest I have heard in my life and I have looked at countless vehicles as a car buff.

Those who are so quick to criticize the new Bronco, have an axe to grind with Ford or are looking for extra clicks, by being contrarians. The new Defender interior is plenty cheap for what LR even charges and has a limited selection in my opinion.

 

Ram truck interiors are not even as people like to pretend and I am objective as they come, because I like to sample everything without bias.

 

I would sooner buy certain Rams over an F-150 today, but have compared equivalent trim levels of Ford pickups to Ram and saw minimal differences, in terms of interior fit and finish, textures.

 

The poor quality interior jibes against Ford are so overblown and are merely parroted, simply because Ram is seen as an underdog and Ford as a dominanting force in the pickup segment. Outside of the 1794 Edition, Tundra is woefully outdated and not solid feeling compared to some of their other offerings.

 

Not even gonna mention Nissan. GM's trucks are miserable on the interior, stark, and feel rental grade as usual. Like most of their cars, which typically have sterile interiors and not warm environments. You can always imagine the distinct GM scent, which I liken to stale cigarette smoke mixed with deodorizer. 

 

I would never buy a GM truck brand new, even if a 2014-15 1500 4x4 looks decent to me. Yet so many attacks against the P375 T6 Ranger interior were heard, which was heralded as class leading at launch in 2011. 

Yet the chintzy, Canyon interior exists for the prices GMC charges? Um, okay then.

 

6 hours ago, 2005Explorer said:

The whole notion that the Ford brand competes against Mercedes or Porsche is ridiculous in my opinion. Ford competes against mainstream brands Toyota, Chevy, Honda, Nissan, Jeep, Ram, Hyundai, etc. Maybe Lincoln can build it’s brand up and go after small scale luxury or boutique brands, but sorry no one is paying thousands more for an Escape over a RAV4 or CRV just because of the blue oval. The same holds true when it comes to pickup trucks. The F-150 has to remain competitive and close in price to the Silverado and Ram. The Ranger with the Tacoma and Colorado. The Bronco with the Wrangler and on and on.

 

The whole idea that Ford can move to small volumes and raise their prices thousands over the mainstream competition and remain relevant as a major automaker in the future baffles me.

Well stated, thank you. Again, the usual characters here seem to miss that and instead are focused on the next Ford apologist statement to dish out and/or counteract criticism than try and understand the long term consequences of the existing problem.

 

There are countless times I ask a question and the responses I get are either very helpful or unnecessary, condescending with no real substance. Other newer members have said as much in PM, about their similar experiences. I thank those who are helpful, because they often know what they are talking about and don't speak too soon, on a subject. If they do speak too soon, they politely say so and they are respected for their honesty.

 

We are all aware of the chip shortage having an impact on Ford sales as of late, but having a heavier reliance on pricier products (not matter how much it soothes my ego vs GM) as Hackett desired long term, is risky in the face of tangible competition.

 

Ford is definitely sensitive to price fluctuations as you have said, as the average buyer won't care. Heck, some people automatically will buy Honda or Toyota, when shopping for a FWD-based crossover, for long term ownership and "don't want to take a chance" on an Escape or an Edge. Let alone pay eons higher.

 

Nor roll the dice with "FCA" or GM. Yet, dealing with Honda dealers can be a great headache, in terms of a fair price in any scenario. The Bronco could  be the exception, but with media outlets like Motor1 lurking Bronco6G and staking out for any teething issues to report on and smear the Bronco launch and reputation.

 

Motor1 seems to lately have a lot of Jeep sponsorship lately as well...

 

I am as objective as can be, but I don't like what GM does with their trucks in general. Ram is doing well for a good reason, but it certainly doesn't negate the vast quality improvements of the F-Series on T3 architecture, over the past 7 years.

 

I've had the first generation of Raptor and saw a night and day difference in refinement, on the aluminum body P552 trucks. They feel way less agricultural and way more modern on the inside. The idea behind it, as teased by the Atlas in 2013, was minimalistic and techy interior. Not ostentatious like Ram.

 

The hype for the Ram DT is so overblown, it's annoying and repetitive. The newer P702 is more than up to par, yet you still hear BS criticisms, from people who haven't even sat inside one or are journos intent on reselling the same points over and over for mysterious intentions.

 

Deliberately forgetting how the P552 MCA was barely the 2018+ DT Ram's contemporary. And you cannot attack a design, drafted in the early 2010s (P552) against one probably signed off in 2015 (Ram DT).

 

The next Ranger (P703) will beat the next Tacoma to market, by 1 year. The 2024 Tacoma is all new in every aspect, but will not offer a V6 allegedly. Think new Ranger I4 Hybrid, as their top offering. Using the new Lexus turbo 4 as base engine.

 

It goes to dealers fall of 2023 and already dialed in. Ford is confident they are gonna beat both the Hilux and Tacoma in most markets, even if it's simply a heavily revised T6 with 2.7 & etc

 

We've already seen the 2023(?) Colorado & Canyon, but Ford is already carefully making inroads with the Ranger and it can only be better with P703 for 2023.

 

Ford moving to smaller dealer stock, but more flexible build to order options, might pay off in the long run. 

Edited August 8, 2021 by akirby
Personal attack

[akirby]

Overreact much?  Nobody’s talking about making Ford a boutique brand.  They’re talking about selling 200k widgets instead of 250k.   They’ll sell as many as the market will support within production constraints.   As we’ve discussed before having multiple products in one plant allows Ford to match production to demand without overproducing to keep the factory busy.  I think that’s what hurt OAP with only Edge and Nautilus resulting in big rebates.
 

As for being apologists, maybe some of us are but in most cases we’re simply being objective and looking at the bigger picture.  Was the Explorer launch a debacle?  Absolutely.  But 6 months later it was forgotten.   This chip shortage will be forgotten in a year or two. An epic disaster would be Ford losing billions but as it stands they’ll make $9B this year. 

[akirby]

10 hours ago, 2005Explorer said:

At some point though volume definitely comes into play if you want to be a major automaker and not a boutique brand. You can price a Ford only so high before people will just go get an alternative brand for less that is just as good. Parts and raw material fabrication also becomes more and more expensive to source when it's only for a few vehicles. Also empty dealer lots isn't a good way to sell vehicles if other automakers have stocked lots. I understand why this is happening, but long term empty lots and low production is not a good strategy even if ATPs are higher. At some point you will drive the company into the ground if there is no supply and prices are not competitive for similar models from other automakers.

All they did was eliminate rebates and bump prices a few hundred bucks.   How does that make them a boutique brand?

 

Nobody said anything about empty lots.  You guys are overreacting to what Farley said.

[rperez817]

1 hour ago, JX1 said:

Ford moving to smaller dealer stock, but more flexible build to order options, might pay off in the long run. 

 

As I mentioned in another thread, this approach which according to Jim Farley means increasing the proportion customer retail sold orders for new vehicle sales, is good for Ford, good for Ford dealers, and good for Ford customers. The Automotive News article that mackinaw shared confirms that other automakers such as GM are likely to emphasize a more "build to order" model from now on.

[FordBuyer]

What's worrisome for the traditional Big 3 vs the Asians is if the Big 3 continues to produce 50% less vehicles than normal for the next 12-18 months which seems possible; and Asian auto company production is down only 10-20% during this time, then the Big 3 relevance will decline even more. 

 

As it is, you can travel many places in this country and see very few Big 3 autos. In my area, almost every vehicle is Asian except for commercial trucks. And even there, lots of Asian pickups too. 

 

So short term, increased profit margins help Big 3, but not so much long term as people who need new vehicles now turn to the Asian brands as their market share further increases and Ford loses all momentum with its well received brand new products.

[ice-capades]

12 minutes ago, FordBuyer said:

What's worrisome for the traditional Big 3 vs the Asians is if the Big 3 continues to produce 50% less vehicles than normal for the next 12-18 months which seems possible; and Asian auto company production is down only 10-20% during this time, then the Big 3 relevance will decline even more. 

 

As it is, you can travel many places in this country and see very few Big 3 autos. In my area, almost every vehicle is Asian except for commercial trucks. And even there, lots of Asian pickups too. 

 

So short term, increased profit margins help Big 3, but not so much long term as people who need new vehicles now turn to the Asian brands as their market share further increases and Ford loses all momentum with its well received brand new products.

 

Don't sell Ford or what's left of the traditional Big 3 short. The OEM's may have a different mix of microchip suppliers and Ford was hit hard due to the fire at one of its major suppliers in Japan that is now getting back to normal production. Ford and the other domestic OEM's have adjusted their production plans to both meet customer demands and protect profit objectives until the supply situation stabilizes and plant schedules can be restored to regular production. Although the factors that have impacted production and sales are unprecedented, both the OEM's and its Dealers have adjusted and taking steps to utilize the lessons learned to formulate new inventory and sales plans for a revised business plan going forward.

 

I wouldn't be so quick to assume that buyers are abandoning Ford products for Asian based manufacturer alternatives. If anything, traditional non-Ford owners are becoming Ford conquest customers in large numbers as evidenced by the sales success of Ford's new Bronco Sport and Bronco. And while some pickup customers may have bought competitors models due to their individual needs and inventory factors, Ford is doing everything possible to restore F-Series production to normal levels in order to meet the overwhelming demand. And no one knows truck buyers better than Ford as evidenced by its decades-long history of sales leadership.    

[Chrisgb]

On 8/5/2021 at 11:00 AM, .I. said:

 

In route by plane?   I don’t want to think what can go wrong!   Noooo.  ?  

Relax. They pulled a bunch of Tri Motors out of mothballs.

[rperez817]

48 minutes ago, FordBuyer said:

As it is, you can travel many places in this country and see very few Big 3 autos. In my area, almost every vehicle is Asian except for commercial trucks. And even there, lots of Asian pickups too. 

 

Yes sir FordBuyer. Other than the Midwest and some parts of the Mountain West, new passenger car sales to real, retail consumers have been dominated by Asian companies in the mainstream segment and by European companies in the luxury segment for some time. However, Tesla Model S and Tesla Model 3 have made significant inroads in the luxury passenger car market since 2012. In some parts of California, Tesla is regularly in the top 5 for new passenger car registrations. That's a dramatic departure from the past when only products from Asian and European companies were at the top.

 

For LD full size pickup trucks, GM and Ford still dominate. Those companies' upcoming BEV pickups along with those from Tesla, Rivian, Bollinger, Hercules, Atlis, and Canoo should help ensure American dominance continues for a long time.

 

For full size BOF SUVs, GM and Ford have it made. GM alone has over 70% share in this segment.

 

For midsize pickup trucks, GM and Ford have strong competition from Toyota, which is the #1 brand in this segment. That could change in the future if Toyota is slow to roll out BEV version of Tacoma.

 

For crossovers, it's a mixed bag. 3 years ago, bzcat shared a Bloomberg article titled "Detroit losing more ground on CUV". This trend has continued to the present day. Note that the Bloomberg included Stellantis (then FCA) in its analysis even though it is a European company. Tesla was not considered in that article.

 

 

[mackinaw]

1 hour ago, FordBuyer said:

As it is, you can travel many places in this country and see very few Big 3 autos. In my area, almost every vehicle is Asian except for commercial trucks. And even there, lots of Asian pickups too. ...

 

And the vast majority of vehicles I see up here in northern Michigan are made by Ford, GM and Chrysler.  So I guess we balance each other out.

 

[Harley Lover]

1 hour ago, mackinaw said:

 

And the vast majority of vehicles I see up here in northern Michigan are made by Ford, GM and Chrysler.  So I guess we balance each other out.

 

Fordbuyer lives in a much larger market (Florida) than you do. 

[Donaldo]

22 hours ago, 2005Explorer said:

The whole idea that Ford can move to small volumes and raise their prices thousands over the mainstream competition and remain relevant as a major automaker in the future baffles me.

 

Ford has been doing this for a long time with premium trim levels and sub-brands like SVT/Raptor/ST, Shelby, King Ranch, Platinum, etc.  Maybe Ford will still sell mainstream and premium products within the same brand. 

[mackinaw]

2 hours ago, Harley Lover said:

Fordbuyer lives in a much larger market (Florida) than you do. 

 

You wouldn't know it this time of the year with all the tourists vacationing up here.

 

My point is you can't make country-wide generalizations by what you see out your front door.  To my knowledge, there are no Tesla's in my part of Michigan.  But I know they are quite popular in California.  Ocular observations are strictly local, just like politics and the weather.

Edited August 8, 2021 by mackinaw
typo

[FordBuyer]

16 minutes ago, mackinaw said:

 

You wouldn't know it this time of the year with all the tourists vacationing up here.

 

My point is you can't make country-wide generalizations by what you see out your front door.  To my knowledge, there are no Tesla's in my part of Michigan.  But I know they are quite popular in California.  Ocular observations are strictly local, just like politics and the weather.

 

How about market share? And I realize profit margin is important too. But Ford and GM market share has been declining for some time, and the chip shortage worsens it. I was hopeful with Bronco family, Mach E, Lightning, Timberline trim line, and so on. But Ford has to have the plants open to sell them. And open for more than a week at a time. Hard to sell what you don't have even if you can get sticker from just a few left every month. 

[akirby]

53 minutes ago, FordBuyer said:

How about market share? And I realize profit margin is important too.. 

Why do we have to keep repeating that market share means nothing without profit?  If you drop market share but maintain the same profit with higher prices temporarily while the  manufacturing shortage recovers then you can grow again but with better margins.  Especially with products like Bronco, Bronco Sport and Maverick plus the BEVs.   
 

The concern would be if they were losing market share with huge rebates and low or no profit and they had no new products coming out.

[akirby]

BTW nobody is saying that this is great for Ford.  They would much rather have vehicles to sell.  But by successfully raising prices on the vehicles they can sell it mitigates a lot of the damage.

[rmc523]

Here are colors:

 

[HotRunrGuy]

For the sake of the employee's, I hope that $9B profit projection is achieved, so they see a decent profit-sharing check next March, after so many weeks of plant shut downs.  Doesn't help the dealers that have had little stock to sell, though.

 

HRG

[akirby]

15 minutes ago, HotRunrGuy said:

For the sake of the employee's, I hope that $9B profit projection is achieved, so they see a decent profit-sharing check next March, after so many weeks of plant shut downs.  Doesn't help the dealers that have had little stock to sell, though.

 

HRG

I think the dealers are affected the most.  Thank goodness they have used car sales to help out.

[jasonj80]

23 minutes ago, akirby said:

I think the dealers are affected the most.  Thank goodness they have used car sales to help out.

Also selling cars at or above sticker helps too. Dealers I have talked to hope this order thing sticks, it helps cut down on their overhead costs as they won’t have to stock so many vehicles. 
 

[slemke]

2 hours ago, rmc523 said:

Here are colors:

 

GT and heavy trucks are up about 20%…. We knew this was coming as Ford just didn’t have chips due to the plant fire. Production should start ramping up.  It will be interesting to see how quickly sales recover.  From the quarterly earnings report, it appears they are doing fairly well to make the best of the situation.

[slemke]

1 hour ago, akirby said:

I think the dealers are affected the most.  Thank goodness they have used car sales to help out.

I think the salespeople are the ones that have it the hardest.  Dealer has parts and service to bring in revenue.  With fewer vehicles available, people are likely to keep their vehicles longer and spend money fixing it up rather than trade it in on something they aren’t completely happy with whether that be new or used.

[rperez817]

17 hours ago, akirby said:

losing market share with huge rebates and low or no profit and they had no new products coming out.

 

That's the position Ford was in for much of the 2000s and 2010s. Jim Hackett's fitness initiatives are finally paying off at Ford. Changes such making product development processes more efficient, reducing fleet sales, and embracing "design thinking" for products and services are a direct result of Hackett's actions when he was Ford CEO.