There Will Likely Be A Limited Supply Of Mavericks At The Dealer

Jim Oaks

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It looks like there may be a limited supply of Mavericks available on the dealer lots when the Maverick goes in to production. Ford CEO Jim Farley says that the automaker will shift to more of a build to order approach. “We are really committed to going to an order-based system and keeping inventories at 50 to 60 days’ supply,” Farley said during Ford’s Q2 2021 earnings call with investors. “I know we are wasting money on incentives.”

Ford would end up with excessive inventory and require incentives to move them. The chip shortage, has forced Ford to slash production, leading to record-low inventory on dealer lots. This crisis has also forced Ford to focus on producing its higher-margin products, which revenue by nearly $5,000 per vehicle in Q2 and added $1.5 billion to the automaker’s operating profit. Additionally, average transaction prices increased by approximately $6,400 in June, year-over-year, at $47,800 per vehicle.

In the case of the 2022 Ford Maverick, Ford plans to offer higher-end trims on dealership lots. The base model trims and hybrid trims will likely not see a dealership floor unless specifically ordered. That means if you were looking for the base model 2022 Ford Maverick for $19,995, you might have to order it. Ford anticipated most people would buy the 2.0L 250 hp Ford Maverick priced at $22,575. The automaker also expects the all-wheel drive option priced at $24,795 will be a big seller. Ford estimated that the sales of these options would account for 65% of production during the first run between those two trim options. That leaves around 35% of production for the cheaper hybrid model.

The build-to-order process is how most companies in Europe function.
 

sgtsandman

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Not unexpected with the chip shortage. There are pluses and minuses with the order option being the primary option but with the issue with chip availability, it might be the best one so that they go to what is being bought instead of what is sitting on the lot.
 

snoranger

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Made to order is a horrible idea... people are more willing to settle for want they don’t want right now over waiting for exactly what they want in 2-4 months.

That will also have an impact on lease turn ins. If I try to turn in another manufacturers lease and buy a Ford, I’d have to plan ahead. Most people don’t plan ahead, they lease what’s on the lot. If there isn’t anything I want available, I’ll go somewhere else.
If I place an order for another Ford, I can extend my lease on a month to month basis until my new one arrives. I can’t extend my Chevy lease because I have a Ford on order. I’d have to turn my Chevy in and not have a car until my Ford arrives. That’s not going to happen. (Hypothetically, I don’t actually own a Chevy.) Most customers will just go to another dealer that’s loaded with stock... and if I was Chevy, GMC, or Ram, I’d flood my dealerships with as much stock as I could to drive Ford into ruins.
A lot of people shop for new cars based off the current incentives. They don’t want to pay retail, they want a better deal. If Ford does away with dealer stock and rebates/ incentives, they’re basically telling people “don’t shop here”. Everyone loves a good deal.

This sounds like a great plan to lose customers.
 

rubydist

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Well then, they are apparently learning their lesson. They are struggling to build Broncos in large part because the take rate for the 2.7 is over 2x what they expected, and the take rate for the higher trim levels is way over what they expected. So they will build some lower trim level Broncos for dealer stock sometime this fall because of this poor planning.

snoranger, when was the last time you went to the Apple store because of a "good deal"? People go buy what they want and pay the price. If they want Ford products, they will buy them with or without incentives. And btw, almost all brands will allow you to extend the end of your lease without having to explain why. I have more than one client waiting for a Bronco Sport who has extended their brand x lease to wait for it.
 
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