New Ford Inventory at 75 Days' Supply in June 2023

[ice-capades]

New Ford Inventory at 75 Days' Supply in June 2023

https://fordauthority.com/2023/07/new-ford-inventory-at-75-days-supply-in-june-2023/

 

 

New Ford inventory levels have remained at or near record low levels for the past several years, a direct result of supply chain issues and other complications stemming from the pandemic. In fact, new Ford inventory stood at just a 19 days’ supply as of Q3 2022, though that number swelled to 70 days in December as constraints began to ease. Now, new vehicle inventory in general continues to improve, with all-electric vehicles actually surpassing ICE models in that regard – which doesn’t concern Blue Oval brass, it seems. Regardless, in terms of overall new Ford inventory levels, those have improved in recent months as well, according to new data from Cox Automotive.

 

New Ford inventory levels swelled to a 75 days’ supply in June, which was the 11^th most in the industry, behind only Jaguar, Lincoln, Infiniti, Buick, Ram, Chrysler, Dodge, Audi, Mini, and Jeep. Ford also had more inventory at the conclusion of last month than Genesis, Mercedes-Benz, GMC, Porsche, Mitsubishi, Nissan, Acura, Mazda, Chevy, Land Rover, Hyundai, Volkswagen, Cadillac, Subaru, BMW, Lexus, Kia, Honda, and Toyota.

 

While Jaguar, Lincoln, Infiniti, and Buick all had more than 100 days’ supply of inventory at the end of June, Toyota, Honda, and Kia finished the month with around a 30 days’ supply, which paints a sharp contrast between these brands. In terms of segments, high-end luxury cars and EVs had the highest inventory levels, while small and mid-size cars were at the bottom of the heap.

 

In terms of price ranges, the $50,000-$60,000 segment closed out June with the highest inventory levels with 72 days’ supply, followed by the $60,000-$80,000 category at 71 days’ supply, and the $80,000-plus segment at 62 days’ supply. The lower-price segments had the lowest inventory, with the under $20,000 group at a mere 31 days’ supply.

Edited July 21, 2023 by ice-capades
Additional Content

[akirby]

Full size trucks totally skew this metric for ford GM and Ram.

[jpd80]

With enough inventory, Ford might actually stand a good chance of selling close to 80,000 F Series this month…

[rperez817]

On 7/21/2023 at 12:31 PM, akirby said:

Full size trucks totally skew this metric for ford GM and Ram.

 

Ford and Stellantis (Ram) for sure. Both those companies have been overproducing full size pickups (other than F-150 Lightning) like crazy over the past few months.

 

GM has been more disciplined matching production of its trucks (and other vehicles) to actual customer demand. Chevrolet had about 50 days inventory and GMC a bit over 60 days according to the Cox Automotive data.

 

[akirby]

1 hour ago, rperez817 said:

 

Ford and Stellantis (Ram) for sure. Both those companies have been overproducing full size pickups (other than F-150 Lightning) like crazy over the past few months.

 

GM has been more disciplined matching production of its trucks (and other vehicles) to actual customer demand. Chevrolet had about 50 days inventory and GMC a bit over 60 days according to the Cox Automotive data.

They aren’t necessarily overproducing.  You clearly don’t understand full sized trucks.  When you sell that many trucks with that many models and options you need 2-3 times the inventory of other vehicles.  Maybe more.

[mackinaw]

2 hours ago, rperez817 said:

.....Ford and Stellantis (Ram) for sure. Both those companies have been overproducing full size pickups (other than F-150 Lightning) like crazy over the past few months.....

 

Stellantis is  getting ready for a strike.  They're overproducing everything.  The new UAW guy has nothing good to say about the company and Stellantis will probably be the first strike target.

 

Considering how well the F-series is selling, a 75 day supply of trucks is right where it should be.  

[rperez817]

5 minutes ago, mackinaw said:

Considering how well the F-series is selling, a 75 day supply of trucks is right where it should be.  

 

The 75 day figure is for Ford brand overall. Cox Automotive said that supply for all F-Series pickups specifically was "above 100 days".

[tbone]

My dealer told me he prefers to have trucks on the lot in addition to the retail orders, to cover the spur of the moment buyers verses the people who order.  He feels it covers the his market better.  

[akirby]

10 minutes ago, tbone said:

My dealer told me he prefers to have trucks on the lot in addition to the retail orders, to cover the spur of the moment buyers verses the people who order.  He feels it covers the his market better.  

Even at the height of Covid retail orders were never higher than 50% of the order bank/production.  Dealers need a lot of trucks in stock.  I’d say somewhere between 100 and 120 is iideal.

Edited July 25, 2023 by akirby

[tbone]

29 minutes ago, akirby said:

Even at the height of Covid retail orders were never higher than 50% of the order bank/production.  Dealers need a lot of trucks in stock.  I’d say somewhere between 100 and 120 is iideal.

He lamented the fact that during Covid they had very few on the lot, and considered a problematic.

[rperez817]

2 hours ago, tbone said:

My dealer told me he prefers to have trucks on the lot in addition to the retail orders, to cover the spur of the moment buyers verses the people who order.  He feels it covers the his market better.  

 

That's sad to hear. Looks like Jim Farley still has his work cut out for him convincing Ford corporate and Ford dealers alike to fully embrace the build to order paradigm that he spoke about many times over the past couple years. Ford CEO Jim Farley Says Build To Order Paradigm Is Company's Future (fordauthority.com)

 

We are really committed to going to an order-based system and keeping inventories at 50 to 60 days’ supply. I know we are wasting money on incentives.

[rmc523]

6 minutes ago, rperez817 said:

 

That's sad to hear. Looks like Jim Farley still has his work cut out for him convincing Ford corporate and Ford dealers alike to fully embrace the build to order paradigm that he spoke about many times over the past couple years. Ford CEO Jim Farley Says Build To Order Paradigm Is Company's Future (fordauthority.com)

 

 

 

 

Customers fall back into old habits, and you have to follow customers.

 

This is especially important if Ford' can't get retail orders produced in a timely manner, they'll lose sales.

[jpd80]

27 minutes ago, rperez817 said:

 

That's sad to hear. Looks like Jim Farley still has his work cut out for him convincing Ford corporate and Ford dealers alike to fully embrace the build to order paradigm that he spoke about many times over the past couple years. Ford CEO Jim Farley Says Build To Order Paradigm Is Company's Future (fordauthority.com)

Farley can say what he likes, the problem with going to a full customer ordering build profile is that long term parts supply contracts normally has defined supply types and quantities locked in at the start of the contract with only minor changes tolerated during that period. So the trick is knowing what those customers are going to be ordering, that’s no always possible and some stock to dealers is necessary to cover walk ins.

 

Ford and it’s dealers know that with F Series sales, they have to have enough customer orders and walk in stock at dealers in order to get that +70,000/mth sales figures they crave, it’s literally money for jam to have around 200k inventory for F Series.

Edited July 25, 2023 by jpd80

[fuzzymoomoo]

15 hours ago, jpd80 said:

Farley can say what he likes, the problem with going to a full customer ordering build profile is that long term parts supply contracts normally has defined supply types and quantities locked in at the start of the contract with only minor changes tolerated during that period.

Which is why there won’t be any meaningful change until new program contracts are locked into place, which should have already been starting with all the launches happening this year. 

[akirby]

I don’t see it being 100% orders.  Even Tesla keeps stock at the factory for quick delivery.  Especially work trucks.

 

What should happen is they limit dealer stock to just a few models and trim packages (far less than what they tried to do previously).  So for Explorer have a low end, mid and high end version in a few colors each.  Then give more options for orders.

[grbeck]

20 hours ago, rperez817 said:

 

That's sad to hear. Looks like Jim Farley still has his work cut out for him convincing Ford corporate and Ford dealers alike to fully embrace the build to order paradigm that he spoke about many times over the past couple years. Ford CEO Jim Farley Says Build To Order Paradigm Is Company's Future (fordauthority.com)

 

 

 

 

I've been hearing variations of this prediction since I discovered this site in 2000. 

[ice-capades]

1 hour ago, akirby said:

What should happen is they limit dealer stock to just a few models and trim packages (far less than what they tried to do previously).  So for Explorer have a low end, mid and high end version in a few colors each.  Then give more options for orders.

 

Ford started doing this in January 2022 with reduced trim and equipment packages available for stock orders, as well as greatly reduced and specific option availability.

 

Inventory Reframing Launch - January 11, 2022

 

ACTION REQUESTED
• Review Inventory Reframing Dealer & Field Manual
• Ensure Dealership staff that are responsible for ordering new vehicles is familiar with your Region’s Stock Order Guide
 

SUMMARY
We are pleased to launch Inventory Reframing, which we first announced to the Dealers at the 2021 Grassroots Meeting in Dallas.
 

Inventory Reframing is a Region-specific approach to reducing stock order complexity and stocking inventory based on the highest selling configurations in each Region. By limiting our stock inventory to the highest selling and fastest turning configurations in each Region, we expect to achieve several significant benefits both in the near term and long term for our Dealers, Ford and for our customers.
 

BENEFITS TO DEALERS

• Faster Days to Turn
• Reduced Aged Inventory
• Lower Floorplan Expense / Improved Profitability
• More Predictable Forecasting / Easier Inventory Management

 

STOCK ORDER GUIDES
Regional Stock Order Guides are a new addendum to the traditional Order Guides that you are familiar with. Stock Order Guides are unique to each Region and were developed based on Regional sales analysis and with input from Dealers that served on an Inventory Reframing Dealer Committee in each Region.

• With the launch of Inventory Reframing, we are maintaining broad sales coverage while limiting stock orders in each Region to the configurations listed in the Stock Order Guide
• All configurations on all vehicles will remain available as an option for customers that want to place a retail order
• The traditional Order Guides will still exist as a main source of content detail on each vehicle, and to serve as a resource for retail orders
• Stock Order Guides will be posted the week of 1/10/22 to a new link in the WBDO Dashboard, following the close of the January wholesale.

 

VEHICLES INCLUDED / LAUNCH TIMING
Effective with the late January / early February wholesale allocation, Stock Order configurations are being reduced on average between 70% - 80% from the total amount of configurations available on the vehicle lines listed below:

• Bronco Sport
• Escape
• Edge
• Explorer
• Expedition
• Ranger
• F-150
• Super Duty
  • F-250 pick-ups ONLY (Chassis cabs, F-350’s and above will have no stock restrictions)
• Mustang

 

Vehicles not listed above are not currently included in Inventory Reframing and will not have any changes to the orderable configurations available for stock.

 

WBDO / ORDERING PROCESS

WBDO will have the same appearance and process flow for ordering vehicles. The key change will be based on your Region, you will only be able to select the available configurations for stock orders that are published in your Region’s Stock Order Guide.

 

On February 2/7/22, following the close of the late January/early February wholesale cycle, WBDO will update to only display the available configurations in your Region’s Stock Order Guide for stock orders on both OTD and non-OTD vehicles included in Inventory Reframing. (WBDO will also update to show available options you can add to your stock configurations.)

 

Fleet orders are not impacted by Inventory Reframing. All configurations remain available on all Retail order types, including A/X/Z/D.

 

Edited July 26, 2023 by ice-capades

[rperez817]

1 hour ago, grbeck said:

I've been hearing variations of this prediction since I discovered this site in 2000. 

 

Former Ford CEO, President, and VP Jacques Nasser "believed the future of buying a new vehicle was in for some big changes as well, with a shift toward build-to-order and more customizable features" back in the late 1990s, according to a Ford Authority article. Former VP Accurately Predicted Modern Ford Practices (fordauthority.com)

 

It's unfortunate that a quarter century later, Jim Farley is still having difficulty getting Ford and its franchised dealerships to implement that approach across the board in the U.S. market.

[akirby]

1 hour ago, ice-capades said:

 

Ford started doing this in January 2022 with reduced trim and equipment packages available for stock orders, as well as greatly reduced and specific option availability.

 

Inventory Reframing Launch - January 11, 2022

 

ACTION REQUESTED
• Review Inventory Reframing Dealer & Field Manual
• Ensure Dealership staff that are responsible for ordering new vehicles is familiar with your Region’s Stock Order Guide
 

SUMMARY
We are pleased to launch Inventory Reframing, which we first announced to the Dealers at the 2021 Grassroots Meeting in Dallas.
 

Inventory Reframing is a Region-specific approach to reducing stock order complexity and stocking inventory based on the highest selling configurations in each Region. By limiting our stock inventory to the highest selling and fastest turning configurations in each Region, we expect to achieve several significant benefits both in the near term and long term for our Dealers, Ford and for our customers.
 

BENEFITS TO DEALERS

• Faster Days to Turn
• Reduced Aged Inventory
• Lower Floorplan Expense / Improved Profitability
• More Predictable Forecasting / Easier Inventory Management

 

STOCK ORDER GUIDES
Regional Stock Order Guides are a new addendum to the traditional Order Guides that you are familiar with. Stock Order Guides are unique to each Region and were developed based on Regional sales analysis and with input from Dealers that served on an Inventory Reframing Dealer Committee in each Region.

• With the launch of Inventory Reframing, we are maintaining broad sales coverage while limiting stock orders in each Region to the configurations listed in the Stock Order Guide
• All configurations on all vehicles will remain available as an option for customers that want to place a retail order
• The traditional Order Guides will still exist as a main source of content detail on each vehicle, and to serve as a resource for retail orders
• Stock Order Guides will be posted the week of 1/10/22 to a new link in the WBDO Dashboard, following the close of the January wholesale.

 

VEHICLES INCLUDED / LAUNCH TIMING
Effective with the late January / early February wholesale allocation, Stock Order configurations are being reduced on average between 70% - 80% from the total amount of configurations available on the vehicle lines listed below:

• Bronco Sport
• Escape
• Edge
• Explorer
• Expedition
• Ranger
• F-150
• Super Duty
  • F-250 pick-ups ONLY (Chassis cabs, F-350’s and above will have no stock restrictions)
• Mustang

 

Vehicles not listed above are not currently included in Inventory Reframing and will not have any changes to the orderable configurations available for stock.

 

WBDO / ORDERING PROCESS

WBDO will have the same appearance and process flow for ordering vehicles. The key change will be based on your Region, you will only be able to select the available configurations for stock orders that are published in your Region’s Stock Order Guide.

 

On February 2/7/22, following the close of the late January/early February wholesale cycle, WBDO will update to only display the available configurations in your Region’s Stock Order Guide for stock orders on both OTD and non-OTD vehicles included in Inventory Reframing. (WBDO will also update to show available options you can add to your stock configurations.)

 

Fleet orders are not impacted by Inventory Reframing. All configurations remain available on all Retail order types, including A/X/Z/D.

 

 

That’s what I meant when I said those didn’t go far enough.   There should only be 2 of each trim - one with everything and one with 2 or 3 options.  That’s 7 including a base model.  Not 21.

[ice-capades]

17 minutes ago, akirby said:

 

That’s what I meant when I said those didn’t go far enough.   There should only be 2 of each trim - one with everything and one with 2 or 3 options.  That’s 7 including a base model.  Not 21.

 

Agreed that the Stock Order Guide Addendum doesn't go far enough in reducing the number of stock order configurations. Ford should also publish these stock order configurations as an actual order guide instead of just an addendum that has to be located and downloaded separately at the FMCDealer.com portal. Most Dealers are too lazy to search and download the updated Stock Order Addendum lists and just rely on notices in the WBDO (Web Based Dealer Ordering) system. Instead, most Dealers no longer bother ordering their own stock orders and simply accept the Ford generated "SIMS" orders.  

Edited July 26, 2023 by ice-capades
Revised

[grbeck]

1 hour ago, rperez817 said:

 

Former Ford CEO, President, and VP Jacques Nasser "believed the future of buying a new vehicle was in for some big changes as well, with a shift toward build-to-order and more customizable features" back in the late 1990s, according to a Ford Authority article. Former VP Accurately Predicted Modern Ford Practices (fordauthority.com)

 

It's unfortunate that a quarter century later, Jim Farley is still having difficulty getting Ford and its franchised dealerships to implement that approach across the board in the U.S. market.

Ford and other manufacturers are up against state franchise laws, which have long been tilted in favor of the dealer. 

[jpd80]

2 hours ago, rperez817 said:

 

Former Ford CEO, President, and VP Jacques Nasser "believed the future of buying a new vehicle was in for some big changes as well, with a shift toward build-to-order and more customizable features" back in the late 1990s, according to a Ford Authority article. Former VP Accurately Predicted Modern Ford Practices (fordauthority.com)

 

It's unfortunate that a quarter century later, Jim Farley is still having difficulty getting Ford and its franchised dealerships to implement that approach across the board in the U.S. market.

The real issue Ford has is that dealerships know their customers better than Ford does, especially the highly profitable F Series. Ford needs to pander to the whims of the last 10,000 or 15,000 sales a month in order to get that 70,000 or 80,000 sales a month cherry on top profit.

[rperez817]

On 7/25/2023 at 4:10 PM, rmc523 said:

This is especially important if Ford' can't get retail orders produced in a timely manner, they'll lose sales.

 

That could potentially result in a cycle of doom for Ford amid the ongoing revolution in the automotive industry. 

1. Ford takes too long to get retail sold orders produced and shipped to customers
2. Ford's sales decline as customers go elsewhere
3. Ford goes back to its bad habit of overproducing dealer stock vehicles to make up for the sales decline
4. Ford's business weakens further as a result of sales quantity > sales quality
5. Ford is less capable of addressing the issues that resulted in retail sold orders taking too long to get produced in the first place
6. Repeat Steps 1 - 5

Edited July 26, 2023 by rperez817

[tbone]

10 hours ago, rperez817 said:

 

Former Ford CEO, President, and VP Jacques Nasser "believed the future of buying a new vehicle was in for some big changes as well, with a shift toward build-to-order and more customizable features" back in the late 1990s, according to a Ford Authority article. Former VP Accurately Predicted Modern Ford Practices (fordauthority.com)

 

It's unfortunate that a quarter century later, Jim Farley is still having difficulty getting Ford and its franchised dealerships to implement that approach across the board in the U.S. market.

Do you ever consider what the customer might actually want?   Some people don’t want to wait to purchase anything.  Until every manufacturer goes to build-to-order, those customers will just go to whomever has something available to buy. Until there are no other option available, or Ford can deliver a vehicle in a week or so, things aren’t changing anytime soon, unless they plan on loosing a bunch of sales.  

[akirby]

There will always be a need for “grab and go” vehicle sales.  Especially work vehicles.  
 

For ordering to work as a large percentage of sales the order needs to be scheduled immediately for the next available slot without regard to allocation (which obviously assumes parts are available).  And allow the consumer to do it online and pick the delivering dealer (also assumes preset pricing although dealers could offer their own rebates).   This should result in 3-4 week lead times for most vehicle orders plus shipping.