Sales are falling at Ford, but that shouldn’t come as much of a surprise considering the environment we have in the auto industry.
Every time we turn around, it seems another challenge faces this industry, creating slowdowns in production, reduced vehicle output, and a loss of sales and revenue. Automakers are looking for ways to bounce back after the pandemic of two years ago shut everything down for several weeks. Since that time, nothing has gone smoothly or like normal, which means we have no idea when automakers will have full dealership lots again or when we can stop reporting on losses in this market.
From Incredible Highs to the Lows We See Today
During the previous decade, automakers lived with the fear that the market would suddenly collapse, much the same way it did in 2008 when a global economic crisis crippled the auto industry. The entire decade of the 2010s showed improvements in sales with year-over-year growth for nearly every company. There was a ceiling predicted that was never quite reached, but something caused this bubble to pop unnaturally. The COVID-19 pandemic struck in the early part of 2020, creating a forced reduction in production.
The Supply Shortages Continue to Worsen
Ford will lose sales this year simply because it can’t build enough vehicles to sell more models than last year. This loss of sales is entirely due to the lack of deliveries from suppliers. While Ford didn’t reveal which supplies aren’t making it to the assembly plants, we know that semiconductors continue to be among them. This supply bottleneck is at a level now that Ford predicts a 12 percent drop in sales compared to last year. This is a significant number considering 2021 was the first year out of the pandemic.
Dealers Struggle to Sell More Vehicles
The surge of used vehicle prices that hit the market last summer might raise its ugly head once again. During this time, the prices of many used cars rose to a level that caused pre-owned models to be more expensive than when they were new. With Ford unable to send dealers any new-vehicle retail allocations until the end of May, sales will likely drop, and used models will be where customers turn. Its possible dealers could bring in more of these pre-owned models to fill the void and give these sales locations a chance at keeping their company afloat.
What are the Delivery Numbers?
Last year, Ford delivered 1.9 million vehicles to dealers around the United States. After reports of these new supply chain delays arose, the projection of delivers for this year is now 1.66 million vehicles for this brand. So far this year, Ford has lost 100,000 units of production because 37 different suppliers failed to provide parts as scheduled. This is a problem that’s much more widespread than the simplicity of semiconductor chips that aren’t making it to the assembly plants. When will the supply chain normalize again? That’s the question that must be answered unless we want to see automakers such as Ford lose ground with continued loss of sales each year.
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