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Ford Inventory Levels Will Not Return To Pre-Pandemic Highs

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It’s no secret that new Ford inventory levels have reached new lows as the semiconductor chip shortage has forced the automaker to slash production and idle most of its plants. Recently, Ford CEO Jim Farley warned dealers that they won’t be receiving any meaningful amount of new vehicle inventory until August, though many experts believe the crisis could endure for years. Regardless, Kumar Galhotra, FoMoCo’s president of the Americas and International Markets Group, doesn’t see Ford inventory levels ever returning to their pre-pandemic highs.

“It will definitely be lower,” Galhotra told Automotive News in a recent interview. “I think it‘s too soon to say it will be ‘X’ days’ supply lower, but we’re studying that very carefully. Both us and our dealers have learned how to turn over the inventory faster. I’m sure every one of our competitors has a key measurement of velocity, how many days between a vehicle landing at a dealership and a vehicle being in a customer’s hands.”

“You can maintain your production and wholesales at a level you want with a leaner inventory if you can have a faster velocity, if you can turn it faster as it reaches the dealership. Dealers have been really creative managing this crisis. That velocity is the fastest I’ve seen in my 32-year career. I’ve never seen anything like this.”

Ford dealers have indeed managed to turn record profits in recent months, in spite of the chip shortage. This can be largely attributed to the fact that certified pre-owned vehicle sales are also reaching all-time highs, while dealers have been able to reap those benefits thanks to Ford’s new Blue Advantage program.

Ford isn’t the only automaker aiming to slim down its inventory levels, either. In an exclusive interview with GM Authority last fall, Chevrolet’s senior marketing manager for SUVs, Brad Franz admitted that “we will just have to live in an environment where we get a little more comfortable running lean.”

We’ll have more on Ford’s future strategy soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

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Written by Brett Foote

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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13 Comments

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  1. No product we will go to other makes! The price increases in the past few months are nuts. That electric truck will be the next Edsel do you see Toyota going full electic, hybrid is the only way till confidence grows in the publics interest!

    • Yes, Toyota has full electric vehicles now.

      So, were you saying “do you see Toyota going with turbo 6s?” at the EcoBoost
      F-150 debut years ago? Now they’re following Ford’s lead and the next gen Tundra has a 3.5L twin turbo V-6. Sound familiar? Wasn’t the EcoBoost F-150 gonna be the next edsel? Nobody would buy it? Certainly won’t cause other automakers to do the same, or sell very well, or spawn other variants, nope it was all doom and gloom about how Ford screwed up.

      Btw, Ford offers more choices in Hybrids, now including two trucks. Do you see Hybrid pickups from Toyota? Do you see a Toyota selling a million units a year like F-series?

      So, make that vein pop outta your head just a little farther with more thoughts about how Ford should follow instead of lead. If you’re scared, go get you a 3 speed automatic used Corolla and STFU.

    • All electric trucks are a natural evolution and one of the big 4 had to be first. Ford has received 100,000 pre-orders for the Lightning. I’d say that reflects both an interest and confidence in full electrification.

  2. I think it will be logistically easier for the manufacturers and dealers to deal with moving less inventory while simultaneously maintaining the high-profit margin they have been enjoying for so many months. They’ll justify the lack of incentives and markdowns by simply pointing out the lower inventory/supply.

  3. ” Ford isn’t the only automaker aiming to slim down its inventory levels ”

    I’d say that has more to do with orders not being filled than anything else. Social engineering should be illegal.

  4. All they will be doing is pushing customers to other manufacturers who have plenty of inventory. No Escapes available? No problem, I will get a new 2022 Mitsubishi Outlander for a similar price and with a better warranty. Ford needs to really be careful that they don’t alienate customers in their quest to eliminate incentives, reduce inventory, and focus on pure profit.

    Also, they will have literally no excuses for any lingering quality issues. If they are going to constrain supply, those units they do make had better be near perfect. You can’t reduce output and still expect consumers to tolerate issues. Especially if prices are up and people are paying full price. There is no value in that. It may be a seller’s market, but the buyer still needs to see their money was well spent

    • Enjoy that MitsuNissan, you’re gonna need that warranty.

      I’m pretty sure nobody said they want to keep things the way they are, just that instead of being stuck with 160 of last year’s Escapes that have to be incentivized to hell to get them out of the way for new models, they’ll more closely align inventory with demand.

      But yeah. You should get a Mitsubishi, a company not concerned with profit (since they haven’t seen one in so long). Enjoy the shark salespeople and the amazing resale value. I’ll think of you fondly every time I see a 5 year old Mitsubishi on craigslist for under $5k.

  5. Despite all the Biden hoopla yesterday, all this funding to remedy the chip shortage won’t happen for at least 18 more months, if not years. Plants have to be built, after gov’t studies. Automakers need to find a way around this, like GM is doing by omitting unwanted features like stop/start, lower prices and dramatically increase inventory. If Ford isn’t willing to do that, sales will go to those that do. You see the South Koreans beginning to do that already. You’re toast, Ford.

  6. Does this mean Ford is going to pull all their abandoned brand new vehicles out of those forgotten ghost lots all over the country and finally sell them off? Wouldnt mind getting a brand new 2016 with 0 miles and a window sticker still on. LOL

  7. Ive been trying to trade my 2018 platinum f150 for a new F250 lariat. The dealers are jerking me around and some even trying to charge over sticker. It’s a shell game. Looks like they have lost a repeat customer. Sold my Ford stock and looks like another manufacturer will be selling me a 70,000 dollar truck. I won’t look back and I won’t be driving a Ford.

  8. “Ford dealers have indeed managed to turn record profits in recent months, in spite of the chip shortage. This can be largely attributed to the fact that certified pre-owned vehicle sales are also reaching all-time highs, while dealers have been able to reap those benefits thanks to Ford’s new Blue Advantage program.”

    No, just NO. This is simple supply/demand scenario. Because dealers are scaring customers that they just won’t get cars in, they’re charging MSRP or higher as justification and customers are just accepting it. This is a dealer’s dream market. Justification for high prices and no negotiation and raking in profit with the ability to justify it by blaming low supply.

    F*ck Ford sometimes I swear

  9. I ordered an F-250 in early March and I STILL have NO truck. What is extremely annoying to me is that dealerships are charging a “Market Adjustment” to the vehicles they have on their lots. As a reminder, Toyota makes some great trucks in both the Tacoma and Tundra. They are time proven to be excellent choices in trucks. I have already made my downpayment and waited 4.5 months for the truck, so I will just wait it out. Ford decided to slap their customer with the $1,000 incentive for orders placed since April 1st, what about the customers that placed their orders in March…and still don’t have the &$%** vehicle? Oh, and allowing dealerships to screw customers over with the “Market Adjustment.” This is the last Ford I will ever purchase. We should all remember that it is Ford’s own ineptness that got them into this situation for not properly managing their supply chain and diversifying their available suppliers.

    Ford and their dealerships should remember that screwing their customers over is not a good long term strategy. Some customer such as I, have long memories. Many other manufactures such as Toyota are not having the same level of issues, oh and the dealerships are not screwing the customer at every chance.

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