Ford CFO John Lawler Concerned About Rising Inventory

[Deanh]

On 6/17/2024 at 9:23 AM, ice-capades said:

 

It's up to the dealership to order stock vehicles that satisfy their market demand. 

dont forget stock orders are effected by commodity issues...all fine and dandy getting inventory...only to find its missing a really popular option....Hardtop anyone?...Sasquatch anyone? V6 engine anyone....

Edited June 18, 2024 by Deanh

[fuzzymoomoo]

6 hours ago, silvrsvt said:

 

Why not plan ahead and special order it so you have it at the end of the lease?

It was after the order bank for 2023 closed and I didn’t want a 24. 

[HotRunrGuy]

1 hour ago, akirby said:

I just looked and could not find a single 2wd F150 XLT within 100 miles.

 

I paid $37K for my loaded (back then) 2wd XLT Supercab 3.5l ecoboost.  Due strictly to inflation that’s $46K today.  Add back the $10k I got in rebates and discounts and you’re at $56K.  It’s a combination of more features, less or no discounts and simple inflation.

 

I find that the "search inventory" feature isn't working when drilling-down options. If you go to Build & Price, build a XLT 2WD, there's over 100 within 20 miles of 30114.

 

https://shop.ford.com/inventory/f150/results?fromPopularBuild=false&zipcode=30114&Radius=20&modeltrim=F-150_F24-XLT&Order=Distance&altleadsource=fbc&fromDetails=true&intcmp=fv-fbc-sum-cta-si-f-150

 

Every one I've clicked on has been a 4x2.

 

HRG

[jpd80]

Even though F Series inventory is climbing, Ford is getting decent monthly sales,

perhaps this is a case of wanting enough stock on hand to entice walk in buyers?

but that would mean stuffing dealers with stock…

 

I guess time will tell if Ford needs to pause truck production but I have a hunch

that it would prefer to have plenty of inventory on hand over the summer to get

as many sales as possible, even with some incentives. 
 

What do you guys think……

[akirby]

28 minutes ago, HotRunrGuy said:

 

I find that the "search inventory" feature isn't working when drilling-down options. If you go to Build & Price, build a XLT 2WD, there's over 100 within 20 miles of 30114.

 

https://shop.ford.com/inventory/f150/results?fromPopularBuild=false&zipcode=30114&Radius=20&modeltrim=F-150_F24-XLT&Order=Distance&altleadsource=fbc&fromDetails=true&intcmp=fv-fbc-sum-cta-si-f-150

 

Every one I've clicked on has been a 4x2.

 

HRG

Stupid web developers.  Looks like a roughly $4K increase from 2018 pricing after accounting for inflation.  Which roughly matches the difference in rebates ($2500 now vs  $7K then)

[akirby]

14 minutes ago, jpd80 said:

Even though F Series inventory is climbing, Ford is getting decent monthly sales,

perhaps this is a case of wanting enough stock on hand to entice walk in buyers?

but that would mean stuffing dealers with stock…

 

I guess time will tell if Ford needs to pause truck production but I have a hunch

that it would prefer to have plenty of inventory on hand over the summer to get

as many sales as possible, even with some incentives. 
 

What do you guys think……

I think people get too hung up on days inventory and should be looking at sales vs production.  For something like F Series with so many versions and options it pays to have more inventory.  As long as inventory doesn’t continue to grow and doesn’t require big rebates then it’s a non issue.

[Deanh]

1 hour ago, akirby said:

I think people get too hung up on days inventory and should be looking at sales vs production.  For something like F Series with so many versions and options it pays to have more inventory.  As long as inventory doesn’t continue to grow and doesn’t require big rebates then it’s a non issue.

Problem is flooring, with todays interest rates the flooring charges are downright terrifying if a Dealer has a large inventory.......

[ice-capades]

9 hours ago, Chrisgb said:

We had that with 2dr Aspires. I was at my dealer the other day for a Works Package, and wandering the lot, I saw that they had eight Broncos; seven were softops w/o insulation. Interestingly, among the compulsory million F150s, they had over a dozen XL 4X4 SuperCabs, all under or right around $50k. Courtesy vehicles? Fleet bubble?

 

Fleet vehicles can be identified with 5B and other codes as the Order Type. Retail orders are order type 1, stock orders are type 2.  The Retaiol orders also have green window stickers for easy identification. 

Edited June 18, 2024 by ice-capades
Additional Content

[morgan20]

1 hour ago, akirby said:

I think people get too hung up on days inventory and should be looking at sales vs production.  For something like F Series with so many versions and options it pays to have more inventory.  As long as inventory doesn’t continue to grow and doesn’t require big rebates then it’s a non issue.

 

 

1 hour ago, jpd80 said:

Even though F Series inventory is climbing, Ford is getting decent monthly sales,

perhaps this is a case of wanting enough stock on hand to entice walk in buyers?

but that would mean stuffing dealers with stock…

 

I guess time will tell if Ford needs to pause truck production but I have a hunch

that it would prefer to have plenty of inventory on hand over the summer to get

as many sales as possible, even with some incentives. 
 

What do you guys think……

 

Ford has too much inventory. The Ford CEO's goal is 50 to 60 days inventory. Last month Ford was at 101 days and Lincoln at 145.

 

 

 

[Chrisgb]

15 minutes ago, ice-capades said:

 

Fleet vehicles can be identified with 5B and other codes as the Order Type. Retail orders are order type 1, stock orders are type 2.  The Retaiol orders also have green window stickers for easy identification. 

Thanks! It was difficult to read any of the Moroneys as they are affixed to the rear quarter window, which these days is smoke tinted on almost every vehicle. Why not put a QR code on the serial number plate? Nearly everyone carries a QR-capable phone.

 

Thread hijack over.

[Deanh]

17 hours ago, ice-capades said:

 

Fleet vehicles can be identified with 5B and other codes as the Order Type. Retail orders are order type 1, stock orders are type 2.  The Retaiol orders also have green window stickers for easy identification. 

annoyingly...even our 5B orders are downloaded onto our website making it look like we have additional inventory for sales...and GOOD inventory ie R1C's......* Transit 148 inch midroofs...the phone calls are relentless..

[ice-capades]

19 minutes ago, Deanh said:

annoyingly...even our 5B orders are downloaded onto our website making it look like we have additional inventory for sales...and GOOD inventory ie R1C's......* Transit 148 inch midroofs...the phone calls are relentless..

 

It used to be possible to have the retail and fleet orders filtered out so that they weren't displayed on the dealership sites. I don't know if that's changed as certain dealership site elements are controlled by Ford. I recently did a major refresh of a Ford dealership site and updated every page of the site except for the inventory search pages which someone changed about a year ago and are a mess.  

[Andrew L]

On 6/14/2024 at 10:36 PM, 2005Explorer said:

Product mix can be blamed all day long, but the fact that new vehicle prices have increased on average $10,000 since 2020 coupled with high interest rates might also play a part in inventory sitting on dealers lots.

 

I have to agree sticker shock is a real thing...

 

However does it seem like dealerships, and not just Ford, but in general have not really kept up with the right product mix?  I remember when growing up and going to the dealership with my parents and they always seemed to have exactly what they were looking for on the lot.  Now a days not so much.  My dad for what ever reason bought a Chrysler Pacifica Hybrid a few years ago and he had a very hard time finding one that had all the features he wanted, premium sound system being the biggest thing for him which is hilarious since he's basically deaf and really needs hearing aids but refuses to get them.  It took him a few months to find one with everything he wanted.  He almost settled on an S but I told him not to do it because the seats were more sporty with more aggressive bolstering and I knew he would hate them in the long term.

[Sherminator98]

1 hour ago, Andrew L said:

However does it seem like dealerships, and not just Ford, but in general have not really kept up with the right product mix?  I remember when growing up and going to the dealership with my parents and they always seemed to have exactly what they were looking for on the lot.  Now a days not so much.

 

I think much of the issue that everyone was used to cheap/free money when it came to financing and with rates going up so much over the past two years, people are re-evaluating their purchasing habits. So dealerships just assumed that people would go to the next trim/expensive vehicle because it was such a small increase in a monthly payment, where as it makes a difference of say $100-200 a month. 

I think the other issue is with packaging of options-entry level cars have what was luxury grade safety features and scope creep has hurt vehicles (look at the last gen Escape for that-my wife's 2017 SE was actually better equipped them my parents 2013 Titanium they had and my parents newish 2022 Escape is actually a downgrade vs both of them, outside of the safety features) because makers thought they needed to add new features.

 

I ran into this with my Bronco to a lesser degree-I was going between a Big Bend and Outer Banks-I wasn't planning on off roading much, but I also didn't want to pay the extra $5000 in options that I could get with the Outer Banks that where just nice to haves like the 12in display or 365 degree cameras.  

[Deanh]

14 hours ago, silvrsvt said:

 

I think much of the issue that everyone was used to cheap/free money when it came to financing and with rates going up so much over the past two years, people are re-evaluating their purchasing habits. So dealerships just assumed that people would go to the next trim/expensive vehicle because it was such a small increase in a monthly payment, where as it makes a difference of say $100-200 a month. 

I think the other issue is with packaging of options-entry level cars have what was luxury grade safety features and scope creep has hurt vehicles (look at the last gen Escape for that-my wife's 2017 SE was actually better equipped them my parents 2013 Titanium they had and my parents newish 2022 Escape is actually a downgrade vs both of them, outside of the safety features) because makers thought they needed to add new features.

 

I ran into this with my Bronco to a lesser degree-I was going between a Big Bend and Outer Banks-I wasn't planning on off roading much, but I also didn't want to pay the extra $5000 in options that I could get with the Outer Banks that where just nice to haves like the 12in display or 365 degree cameras.  

still out there...just took a phone call..."Hey I saw your high roof Transit on your website...what are you guys doing, I can get 10-11k off on a Sprinter......................"....its 9.35, and already time for a Gin and Tonic...

[mackinaw]

Here's how Ford will address its excess supply of vehicles.  Go to the 6:21 mark.  Maybe Dean can explain what this will do.

 

https://www.autoline.tv/daily/ad-3837-dealers-profit-4500-per-car-xpeng-claims-best-ev-aerodynamics-tesla-batteries-easily-last-200k-miles/

[akirby]

28 minutes ago, mackinaw said:

Here's how Ford will address its excess supply of vehicles.  Go to the 6:21 mark.  Maybe Dean can explain what this will do.

 

https://www.autoline.tv/daily/ad-3837-dealers-profit-4500-per-car-xpeng-claims-best-ev-aerodynamics-tesla-batteries-easily-last-200k-miles/

I don’t see how that will help reduce inventories.

[fordmantpw]

20 hours ago, akirby said:

I don’t see how that will help reduce inventories.

 

Ford won't cover the floorplan interest anymore, so dealers are going to be more proactive (ie better deals) to move stock.

[Deanh]

1 hour ago, fordmantpw said:

 

Ford won't cover the floorplan interest anymore, so dealers are going to be more proactive (ie better deals) to move stock.

Thats Fords theory/ thinking for sure...leverage.....kinds pisses me off to tell the truth, you cant order vehicles for stock you want, so you compromise and they sit, rewarding Ford with flooring...meanwhile retail orders for customers are taking 6 months or more....and then theres fleet orders getting completly ignored....I had 4 Transits on order for one company, all ordered same day, 3 arrived, 4th arrived 137 days later, client has a Purchase order for all 4 at once, so we paid flooring whilst waiting for the last unit....conspircy theory in there somewhere

[jpd80]

7 hours ago, Deanh said:

Thats Fords theory/ thinking for sure...leverage.....kinds pisses me off to tell the truth, you cant order vehicles for stock you want, so you compromise and they sit, rewarding Ford with flooring...meanwhile retail orders for customers are taking 6 months or more....and then theres fleet orders getting completly ignored....I had 4 Transits on order for one company, all ordered same day, 3 arrived, 4th arrived 137 days later, client has a Purchase order for all 4 at once, so we paid flooring whilst waiting for the last unit....conspircy theory in there somewhere

So let me get this right,

Ford dictates which vehicles and options dealers get to sell but if they sit like wallflowers, it gets to charge dealers more interest the longer they stay on the floor…..hmm, kind of a sneaky way to hide their build profile mistakes. They basically charge you to take on their F*** ups.

 

Why do you think Ford builds so many harder to sell vehicles, is it because they take a punt on forward ordering of various options packs from suppliers and then realise retail is not buying them as much as they thought?

Edited June 21, 2024 by jpd80

[GearheadGrrrl]

Haven't posted much lately, hopefully this post won't get me banned again- It's just my opinion and most of the folks here are pretty knowledgeable and have a right to their's too. I suspect that having to order instead of buy a vehicle off the lot for the last few years has made us better at speccing. Like many, I ordered my Transit Connect "A La Carte" by starting with an XL model and adding what I actually wanted instead of simply accepting an XLT or Titanium from dealer inventory. I saved hundreds if not thousands of dollars, found some less than hundred dollar options that added a lot of value, and avoided a few items in the XLT and Titanium trims that are for me liabilities rather than assets. 

 

After ordering mine I noticed a clever dealer had ordered a near identical one for stock, talked to them and in similar manner they'd "deconstructed" the options and packages to pick the same useful combination. I've been seeing this a lot with XLs and XLTs specced up A La Carte with the best options of the more expensive trims. As for Ford pushing back by speccing vehicles the traditional way by trim levels and packages, probably not a conspiracy but simply going back to "the way we've always done it".

[akirby]

Just stop trolling with completely inaccurate statements and you’ll be fine.

[fuzzymoomoo]

2 hours ago, GearheadGrrrl said:

simply going back to "the way we've always done it".

That’s the way this company operates. A fresh mind comes in up top and makes a bunch of changes then as soon as that group is gone it’s back to the status quo. The time between Mullaly leaving and now is a great example of this. It’s about a 10 year cycle. 

[HotRunrGuy]

2 hours ago, GearheadGrrrl said:

Haven't posted much lately, hopefully this post won't get me banned again- It's just my opinion and most of the folks here are pretty knowledgeable and have a right to their's too. I suspect that having to order instead of buy a vehicle off the lot for the last few years has made us better at speccing. Like many, I ordered my Transit Connect "A La Carte" by starting with an XL model and adding what I actually wanted instead of simply accepting an XLT or Titanium from dealer inventory. I saved hundreds if not thousands of dollars, found some less than hundred dollar options that added a lot of value, and avoided a few items in the XLT and Titanium trims that are for me liabilities rather than assets. 

 

 

That's been a common thought among low-end Maverick buyers, unfortunately, the base XL's are way over-ordered, and certainly there are some features that just aren't possible to add-on after the fact.

 

Welcome back, HRG

[rmc523]

Ford Dealership Floorplan Program Updated Based On Feedback (fordauthority.com)

 

Those changes pertain to the Ford Dealership Floorplan Assistance Program, according to Automotive News, which hasn’t been updated in a little over two years. Starting July 1^st, Ford will begin giving dealers an upfront credit that’s worth one percent of the sticker price on most of its retail vehicles, though there are some exceptions. Previously, dealers were paid 1.5 percent, but in 2022, Ford changed that to a reimbursement program with interest charges based on how many days a vehicle remained in stock, up to 75 days max. Floorplanning is a type of inventory financing used for big-ticket items, as dealers don’t purchase or own new vehicles on lots outright.