With new vehicle inventory dwindling on dealer lots because of the ongoing semiconductor chip shortage and subsequent production cuts, dealers and automakers have little to sell at the moment. Thus, Ford has decided to ramp up its vehicle incentives on models that are currently out of stock in an effort to drum up sales, according to a letter sent to dealers that was seen by Cars Direct.
The vehicle incentives in question are what the automaker calls its Retail Order Bonus Cash Certificate, which is good for $1,000 off most new vehicle orders now through July 6th. Previously, Ford offered a $500 incentive through its Retail Order Incentive Program to customers who placed an order for a new vehicle.
The deal is retroactive for orders placed from April 1st forward, while the automaker has also been giving dealers $250 for each vehicle order placed, which will continue through June. This larger incentive doesn’t apply to all Ford vehicles, however, as it excludes both the Ford Bronco and Ford Mustang Mach-E. However, it does apply to the Ford F-150 and Ford Bronco Sport.
What this essentially means is that Ford is paying customers to wait for their vehicles. How long they will wait, however, is currently unclear. The automaker recently said that it may be forced to cut up to 50 percent of its Q2 production as the chip shortage rages on, and recently lost nearly 100,000 units in one week.
Opinions on when the chip shortage might actually end vary greatly. Some think that inventory will start to improve as soon as Q3, while others believe it will take years for things to return to normal levels. Regardless, in the meantime, automakers including Ford must figure out how to circumvent the problem, which includes making changes to the design of certain components and securing chips from manufacturers themselves rather than via third-party suppliers.