As a number of global supply chain constraints continue to hamper automotive production, Ford has announced its intentions to move toward more of a build-to-order business model moving forward. The automaker will maintain a lower level of inventory on dealer lots as well, and those vehicles will be limited in terms of configurations. This will in turn cut down on incentive spending and improve profitability, which benefits the automaker tremendously. And thus far, it seems to be working, as the automaker’s February sales report revealed that around one-third of new Ford sales have come from customer orders over the past seven months.
In February, Ford took a grand total of 72,000 new vehicle orders, which is up from 54,000 one year ago, while 33 percent of new Ford sales came from previously-placed retail orders. As those numbers continue to grow, month after month, it’s only having a positive effect on profitability, while also driving Ford’s average transaction prices higher as well.
In fact, last month, Ford’s average transaction price hit yet another record high at $48,000, which is $4,100 more than one year ago. Across the entire industry, average new car transaction prices surpassed $47k for the very first time in January, while Ford’s average transaction prices rose 9 percent in 2021 and continue to climb.
The ongoing chip shortage and other supply chain issues have prompted Ford to make big changes to not only the way it does business but are also ushering in a new era for dealers. As Ford Authority reported earlier today, dealers will also be asked to specialize in the automaker’s new Model e EV division, the ICE-focused Ford Blue, or Ford Pro, the automaker’s commercial business moving forward.