Ford CFO Says Inventory Levels Will Remain Disciplined

[ice-capades]

Ford CFO Says Inventory Levels Will Remain Disciplined

https://fordauthority.com/2024/04/ford-cfo-says-inventory-levels-will-remain-disciplined/

 

 

For several years following the pandemic, automakers struggled to build new vehicles amid numerous supply chain shortages and other macroeconomic issues. However, those same companies have since turned the proverbial corner, and inventory levels have quickly risen back to normal – and in some cases, higher-than-normal levels. This has prompted automakers like Ford to consider strategically scaling back production to keep inventory levels in check, and that’s a trend that CFO John Lawler said will continue while speaking at the 2024 Bank of America Automotive Summit.

 

 

“I think that we’re still being disciplined with day supply. We know that when you get into a heavy push environment, then that erodes pricing really quickly,” Lawler said. “So I think we still have that in the industry. Everybody’s remained disciplined. I think the other thing, John, is there’s always that risk that it could become less disciplined, but so far we haven’t seen that this year. It’s going quite well. Last year a lot of people were predicting that we’d see a collapse in pricing and it didn’t happen. So I see market factors remaining relatively strong through the first quarter, and we’ll see how that goes through the rest of the year but I’m optimistic.”

 

Ford has certainly dealt with its fair share of inventory issues as of late. In fact, last November, FoMoCo had the highest inventory levels of any mass market brand, and it remained above the industry average at the conclusion of 2023 as well. That didn’t change much as we kicked off the new year in January either, as new Ford inventory levels closed out the month at a 104 days’ supply, which was the eighth highest in the industry at the time, as well as far higher than the national average of 80 days’ supply. However, this situation did improve in February, as strong sales helped drive that down to a a 91 days’ supply.

 

 

As for Ford’s luxury brand – Lincoln – it has been struggling with high inventory levels to an even higher degree, closing out Q3 2023 at levels that were more than double the national average before ending December at more than a 90 days’ supply – the eighth most of any brand – which was also more than double the overall average in the U.S. That trend continued in January before finally easing up somewhat in February, though Lincoln’s inventory levels still remained at an incredibly high 133 days’ supply versus the national average of just 76 days. On the bright side, these swelling inventory levels are expected to help reduce new vehicle pricing somewhat in 2024, as Lawler previously stated.

Edited April 1 by ice-capades
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I'll believe it when I see it regarding inventory levels being disciplined. Time will tell!