Ford CFO John Lawler Concerned About Rising Inventory

[ice-capades]

Ford CFO John Lawler Concerned About Rising Inventory

https://fordauthority.com/2024/06/ford-cfo-john-lawler-concerned-about-rising-inventory/

 

 

For years, new vehicle inventory levels hovered near or at record lows following the onset of the pandemic, but have recently shifted dramatically in the other direction. In that regard, Ford Motor Company currently has one of the higher inventory levels in the business, which is cause for at least a little bit of alarm. Just a few weeks ago, Ford CFO John Lawler stated that the automaker was being “disciplined” with its inventory levels, and even said that they had improved early last month. Now, however, the executive seems to be changing his tune.

 

 

“It worries me that the stocks are building. We haven’t seen that impact us so far, but we’re watching it very closely,” Lawler said while speaking at the recent Deutsche Bank Global Auto Industry Conference. “I think when you look at what happened across the industry, one of the pitfalls you can run into is if you’re pushing product out that isn’t necessarily what the consumer wants, it’s really tough to move them.”

 

“Within Ford, we call those the ones with pink polka dots, in that they’re not spec’d right and it’s really hard to move them and it takes a significant amount of consumer incentives to move them forward. And so, when you look at that and if you get into the situation where you have a lot of vehicles that we call the pink polka dots, you’re going to run into trouble. So, we’re watching it closely. It hasn’t been a contagion onto us yet. We’re still seeing strength. And I think primarily because much of our product is new.”

 

Lawler certainly has reason for concern after Ford inventory levels stood at a 100 days’ supply at the end of April, which was the highest since January and once again far above the industry average, which was 76 days’ over the same timeframe. The Lincoln brand fared even worse at a 144 days’ supply, which was also among the highest among all automotive brands. Though some of this build-up was apparently intentional, FoMoCo has also introduced a number of incentives in an effort to move older inventory as of late, too.

Edited June 12, 2024 by ice-capades
Additional Content

[akirby]

So stop making pink polka dots.  Geez this isn’t rocket science.

[rmc523]

16 hours ago, akirby said:

So stop making pink polka dots.  Geez this isn’t rocket science.

 

Yeah, don't force weird combos on dealers, and have reasonable pricing, and people will buy.

[ice-capades]

17 hours ago, akirby said:

So stop making pink polka dots.  Geez this isn’t rocket science.

 

I don't have the latest updates to the stock order specifications that Ford starting requiring Dealers to use a few years ago, but the last I saw, there were still far too many order and option combinations available for stock orders. As @akirby stated, it's not rocket science!  

[rmc523]

19 minutes ago, ice-capades said:

 

I don't have the latest updates to the stock order specifications that Ford starting requiring Dealers to use a few years ago, but the last I saw, there were still far too many order and option combinations available for stock orders. As @akirby stated, it's not rocket science!  

 

Easier said than done I'm sure, but here's my idea - make stock orders for most models to cover all types of buyers:

 

1. a mid-equipped base trim (Active, XLT, etc) - the less expensive buyers with a decently equipped low trim (it's unlikely most buyers would want a complete bare-bones model)
2. a mid-equipped middle trim (Limited, Lariat, etc) - the middle buyer that wants some options but doesn't need everything
3. a loaded top trim (Titanium, Platinum, etc) - then the buyer that wants everything and the kitchen sink

 

The "mid" model would be the highest percentage of stock, and then the "base" and "top" model percentages would vary depending on market based on past sales (i.e. more affluent areas get more loaded models, less affluent get more base models).  That way you cover just about everyone.  And stock them in the inevitable 50 shades of gray that is sadly common these days.

 

If you want any other combo, you order and wait a few weeks.

Edited June 13, 2024 by rmc523

[akirby]

17 minutes ago, rmc523 said:

 

Easier said than done I'm sure, but here's my idea - make stock orders for most models to cover all types of buyers:

 

1. a mid-equipped base trim (Active, XLT, etc) - the less expensive buyers with a decently equipped low trim (it's unlikely most buyers would want a complete bare-bones model)
2. a mid-equipped middle trim (Limited, Lariat, etc) - the middle buyer that wants some options but doesn't need everything
3. a loaded top trim (Titanium, Platinum, etc) - then the buyer that wants everything and the kitchen sink

 

The "mid" model would be the highest percentage of stock, and then the "base" and "top" model percentages would vary depending on market based on past sales (i.e. more affluent areas get more loaded models, less affluent get more base models).  That way you cover just about everyone.  And stock them in the inevitable 50 shades of gray that is sadly common these days.

 

If you want any other combo, you order and wait a few weeks.

I’ve been saying that for years.  Back in the 90s you could buy 3 Honda Accords. - DX, LX, EX with one or two dealer installed options.

 

Look at Escape with multiple ST-Line configs.  3 configurations would cover 80% of buyers.  People don’t mind paying a little more for extra options if it means they can find what they want color wise in stock somewhere.  

[HotRunrGuy]

23 minutes ago, akirby said:

People don’t mind paying a little more for extra options if it means they can find what they want color wise in stock somewhere.  

 

Maybe some people, not me.  Thanks to Ford's search inventory feature, I was able to find the exact Edge we just bought for my wife, rather than pay more locally for options I don't find value in.  Not to mention finding a new dealer that would easily accept my Z-Plan, plus give a strong trade-in allowance for the Escape we were getting rid of.

 

HRG

[Deanh]

2 hours ago, rmc523 said:

 

Yeah, don't force weird combos on dealers, and have reasonable pricing, and people will buy.

we just caught an order put ion by Ford for us on 2025 Explorers....every one had the $6000 painted black roof....that option is a flooring red flag ( Icecapades will understand that statement )

[Deanh]

34 minutes ago, akirby said:

I’ve been saying that for years.  Back in the 90s you could buy 3 Honda Accords. - DX, LX, EX with one or two dealer installed options.

 

Look at Escape with multiple ST-Line configs.  3 configurations would cover 80% of buyers.  People don’t mind paying a little more for extra options if it means they can find what they want color wise in stock somewhere.  

that said some of Fords simplification wont help their numbers...no more F150 Supercab Long beds, no more normally aspirated V6 engines, no more Ranger Supercabs, crecab with a small bed or nothing and a $37k starting price baqsically....some true head scratchers...and then you have the Escape...absolute smorgasboard of total mayhem as mentioned...?????????????????

[akirby]

39 minutes ago, Deanh said:

that said some of Fords simplification wont help their numbers...no more F150 Supercab Long beds, no more normally aspirated V6 engines, no more Ranger Supercabs, crecab with a small bed or nothing and a $37k starting price baqsically....some true head scratchers...and then you have the Escape...absolute smorgasboard of total mayhem as mentioned...?????????????????

Well that’s a little different not offering certain things at all.  I was just referring to dealer stock option packages.  You could still allow special orders for more unique combinations.

[akirby]

55 minutes ago, HotRunrGuy said:

 

Maybe some people, not me.  Thanks to Ford's search inventory feature, I was able to find the exact Edge we just bought for my wife, rather than pay more locally for options I don't find value in.  Not to mention finding a new dealer that would easily accept my Z-Plan, plus give a strong trade-in allowance for the Escape we were getting rid of.

 

HRG

Then you’re in the 20% who would just do a special order.  The chances of finding exactly what you want in the colors you want is pretty rare given all the combinations.

 

I had the opposite problem on our last two MKX/Nautilus.  Nobody had what we wanted in stock within 500 miles with everything we wanted which was a loaded reserve model.  First one we compromised on the engine, wheels and skipped the technology package to take what was in stock.  On the current one we only compromised on the engine getting the 2.0L rather than the 2.7L but I’m ok with that.  
 

It just seems silly that you can get a high end reserve model Lincoln and still be missing options.

[Deanh]

33 minutes ago, akirby said:

Well that’s a little different not offering certain things at all.  I was just referring to dealer stock option packages.  You could still allow special orders for more unique combinations.

Just ODD decisons as Ive outlined before...its definitely costing us Ranger sales for sure...as for the Escapes, insane, AND confusing...odd now given theres so many variables since they are at the end of their cycle....chassis just sitting around perhaps? Would not surprize me in the slightest if they become the Fleet Courtesy Deliverity mainstays...

[Andrew L]

1 hour ago, akirby said:

Then you’re in the 20% who would just do a special order.  The chances of finding exactly what you want in the colors you want is pretty rare given all the combinations.

 

I had the opposite problem on our last two MKX/Nautilus.  Nobody had what we wanted in stock within 500 miles with everything we wanted which was a loaded reserve model.  First one we compromised on the engine, wheels and skipped the technology package to take what was in stock.  On the current one we only compromised on the engine getting the 2.0L rather than the 2.7L but I’m ok with that.  
 

It just seems silly that you can get a high end reserve model Lincoln and still be missing options.

 

My 2013 MKZ was a Reserve and somehow didn't have a sunroof.  It drove me crazy since every car I owned before had one.

 

My 2017 MKZ Black Label has everything except the technology package so no self-parking, radar cruise, or lane keep assist.  I am OK not having that package since it had the real big features I wanted like the "smart" LED headlights, Reval Ultima system, heated/cooled front seats and heated rear seats, and rain sensing wipers.  I got the pano roof in my 2017 also which I was not crazy about I wanted just a regular sunroof but the pano has grown on me.

Edited June 13, 2024 by Andrew L

[rmc523]

2 hours ago, HotRunrGuy said:

 

Maybe some people, not me.  Thanks to Ford's search inventory feature, I was able to find the exact Edge we just bought for my wife, rather than pay more locally for options I don't find value in.  Not to mention finding a new dealer that would easily accept my Z-Plan, plus give a strong trade-in allowance for the Escape we were getting rid of.

 

HRG

 

that's not what I said, though.  I said, there'd be leeway for different combos of vehicles still....so another dealer may still have what you wanted.  OR, you just order it with the dealer you like the best (i.e. the one accepting Z-plan, and high trade value).

 

2 hours ago, Deanh said:

we just caught an order put ion by Ford for us on 2025 Explorers....every one had the $6000 painted black roof....that option is a flooring red flag ( Icecapades will understand that statement )

 

That's a crazy price for that, IMO, even if it does look great.

[ice-capades]

2 hours ago, akirby said:

Well that’s a little different not offering certain things at all.  I was just referring to dealer stock option packages.  You could still allow special orders for more unique combinations.

 

The Dealer stock orders have restricted specifications. Retail orders can be placed per the specifications in the regular order guide. 

[Deanh]

37 minutes ago, ice-capades said:

 

The Dealer stock orders have restricted specifications. Retail orders can be placed per the specifications in the regular order guide. 

as long as you dont mind waiting...I have several retail orders in that still have no VINS after 6 months......have to say I missthe good old days of stating 8 weeks from order date..... 

[DeluxeStang]

22 hours ago, akirby said:

So stop making pink polka dots.  Geez this isn’t rocket science.

There should be taste makers at Ford if there aren't already. Car people who know what looks good, and what's desirable, and oversees vehicle production. Those odd, ugly specs should be speciality order only. 

[akirby]

24 minutes ago, DeluxeStang said:

There should be taste makers at Ford if there aren't already. Car people who know what looks good, and what's desirable, and oversees vehicle production. Those odd, ugly specs should be speciality order only. 

They did that to some degree I just don’t think they went far enough with the restrictions.  

[ice-capades]

43 minutes ago, Deanh said:

as long as you dont mind waiting...I have several retail orders in that still have no VINS after 6 months......have to say I missthe good old days of stating 8 weeks from order date..... 

 

I once had 50 1986 Thunderbirds delivered OTD in 3 weeks! The regional office had extra production available going into Balance Out and offered the extra units to us because we were one of the top 10 Thunderbird Dealers in the country. I placed the orders (mix of T'Bird models including Turbo Coupes, powertrains and options) within 2 hours. I called the regional office as soon as the orders were submitted and they scheduled them instantly for production the following week. Those were the days! 

[rmc523]

17 hours ago, ice-capades said:

 

The Dealer stock orders have restricted specifications. Retail orders can be placed per the specifications in the regular order guide. 

 

I remember they pared it down recently, but sounds like it's not gone far enough and/or the wrong combos are being ordered.

 

16 hours ago, Deanh said:

as long as you dont mind waiting...I have several retail orders in that still have no VINS after 6 months......have to say I missthe good old days of stating 8 weeks from order date..... 

 

I thought they were prioritizing orders over stock?  Or did they switch back?

[akirby]

7 minutes ago, rmc523 said:

 

I thought they were prioritizing orders over stock?  Or did they switch back?

They are but some models/options are still limited supply.

[ice-capades]

1 hour ago, rmc523 said:

 

I remember they pared it down recently, but sounds like it's not gone far enough and/or the wrong combos are being ordered.

 

 

I thought they were prioritizing orders over stock?  Or did they switch back?

 

Retail orders always have priority over stock orders via the priority codes. 

[akirby]

43 minutes ago, ice-capades said:

 

Retail orders always have priority over stock orders via the priority codes. 

If the dealer sets them properly.

[Deanh]

2 hours ago, akirby said:

They are but some models/options are still limited supply.

like seemingly everyone of Deans orders....lol...Im not kidding...Ive been cursed....

[Deanh]

26 minutes ago, akirby said:

If the dealer sets them properly.

and sometimes we dont have a choice....they get changed dfrom outside sources ( Ford ) quite often...may/ may not be to do with commodity issues...my OWN Bronco orders priority codes were a bloody roller coaster and were NOT changed by our Dealer principle whom is in control of that....