The Chip Shortage May Change The Way Ford Does Business Forever

[peterk9]

https://fordauthority.com/2021/12/the-chip-shortage-may-change-the-way-ford-does-business-forever/

 

[Dale5403]

I read that this morning. Makes it sound like vehicle prices will stay higher because of it.

 

[peterk9]

If the bulk of sales are going to be customer orders, I sure hope that they are able to get the build/delivery times back to the 8 - 10 weeks as it was not long ago. Of course a lot of that will again depend on the availability of parts.
Happy New Year Dale.

Peter

 

[Dale5403]

If the bulk of sales are going to be customer orders, I sure hope that they are able to get the build/delivery times back to the 8 - 10 weeks as it was not long ago. Of course a lot of that will again depend on the availability of parts.
Happy New Year Dale.

Peter

And Happy New Year to you Peter. And a big thank you for all that you and the others moderators do to make this such a great forum.

 

[cwescapexlt4x4]

While building customer orders is great, life events happen (impulse buys, accidents, upgrades, etc...) and units need to be on the lots.
We all know this and of course Ford knows this but time is ticking and customers/consumers are growing tired of these shortages.

 

[DoraAExplorer]

I am thinking this is the way all dealerships will operate moving forward. Ford dealers are the only ones that still somewhat resemble new auto dealers. Toyota, Chevrolet, Subaru all look like used car lots than they do the actual vehicles for what they sell.

 

[steweod]

I would be happy to just buy direct from Ford....If that means we pay what dealers pay. Invoice-hold back. Corporate makes plenty of money selling at that price. Dealers are the ones that are jacking up prices. I read somewhere that is why the Ford started adding some incentives back on some vehicles. To cut down how much the dealers were sticking it to people.

 

[peterk9]

I would be happy to just buy direct from Ford....If that means we pay what dealers pay. Invoice-hold back. Corporate makes plenty of money selling at that price. Dealers are the ones that are jacking up prices. I read somewhere that is why the Ford started adding some incentives back on some vehicles. To cut down how much the dealers were sticking it to people.

Just read that one dealer added $30k to the MRSP of a Lightning. Ford was not happy.

Peter

 

[Dale5403]

Just read that one dealer added $30k to the MRSP of a Lightning. Ford was not happy.

Peter

I read this morning that buyers of the new Lighting will be required by Ford to keep it at least 1 year from original date of sale.

 

[peterk9]

I read this morning that buyers of the new Lighting will be required by Ford to keep it at least 1 year from original date of sale.

Hey Dale. I guess we are subscribed to the same Ford newsletter.

Peter

 

[Dale5403]

Hey Dale. I guess we are subscribed to the same Ford newsletter.

Peter

Yup, they have some good articles. I enjoy most of them. I'll never catch up with you though Peter.

 

[EXFAN]

I would be happy to just buy direct from Ford....If that means we pay what dealers pay. Invoice-hold back. Corporate makes plenty of money selling at that price. Dealers are the ones that are jacking up prices. I read somewhere that is why the Ford started adding some incentives back on some vehicles. To cut down how much the dealers were sticking it to people.

Makes sense.
I've purchased more than a few new cars. My experiences with dealers (and Ford products) is that when factory incentives/rebates are available, dealers usually discount less or not at all depending on the amount of the rebate. Many consumers don't realize this and are happy with receiving a rebate lowering the MSRP. On a $40k vehicle, a $3k rebate is substantial to some but less than 10%. In the past Fords buyers on this forum have gotten up to and even over 20% off MSRP without rebates. With my purchases, I negotiated an MSRP discount plus any rebates. I explain to the dealer in these terms: "I want the "MY rebate money" and "your money" - the MSRP discount. In most cases they would have discounted the MSRP or at least have the "room" to do if no rebates were available. Of course, holdbacks and "back-door" incentives can affect how much they can discount but if a person can't get 10% off MSRP, I say go home. But as we know, times are different today but may improve some. I do agree with the article that it may not go back to pre-Covid times. But...

MSRP discounts may be gone for a while but this is a cut-throat business with no loyalty to colleagues or customers. That said, because a dealer needs to sell vehicles to maintain their allotment to receive the same (or increase) inventory, they will discount MSRP. Move Metal as they say. A nice selection in inventory is proven to sell more and convert lookers into buyers. The dealer will make it up from the Used Car Department and Service. I would think the smaller independent "family" dealers with single locations will do more of this "pivoting" as they've been struggling to compete with the conglomerates such as Penske, Sonic, etc.

The chip shortage is real and I mostly agree with the article - but not totally buying the chip shortage as being the cause for Ford's action.

As interest rates rise as in our current inflationary period, prices rise, people save, and unemployment will rise too. Less people will have money to spend and qualify for loans - hence less demand. I assume Ford speculates this by adjusting to a 50 day inventory from 75. Lower auto production will cause factory layoffs too. The dollar will be stronger outside the U.S. so, for many companies or suppliers, production will slow as its cheaper to manufacture or purchase products from overseas. More layoffs.

Speaking of Ford only, I'm curious to see what incentives will be offered for next month's President's Day Sale. Its one of the best times of the year historically to buy a Ford as well as other major holidays including 4th of July, Memorial Day and Labor Day weekends.

These are tough times today, inflation is basically a cut to our paychecks. Just spent $150 at the grocery store for items that used to cost a little over $100 last year. Nobody seems to really know what will happen next especially with Covid still here and in flux. I'm just happy I bought my new Explorer last May and don't need to buy a vehicle.