https://fordauthority.com/2024/06/ford-cfo-john-lawler-concerned-about-rising-inventory/
For years, new vehicle inventory levels hovered near or at record lows following the onset of the pandemic, but have recently shifted dramatically in the other direction. In that regard, Ford Motor Company currently has one of the higher inventory levels in the business, which is cause for at least a little bit of alarm. Just a few weeks ago, Ford CFO John Lawler stated that the automaker was being “disciplined” with its inventory levels, and even said that they had improved early last month. Now, however, the executive seems to be changing his tune.
“It worries me that the stocks are building. We haven’t seen that impact us so far, but we’re watching it very closely,” Lawler said while speaking at the recent Deutsche Bank Global Auto Industry Conference. “I think when you look at what happened across the industry, one of the pitfalls you can run into is if you’re pushing product out that isn’t necessarily what the consumer wants, it’s really tough to move them.”
“Within Ford, we call those the ones with pink polka dots, in that they’re not spec’d right and it’s really hard to move them and it takes a significant amount of consumer incentives to move them forward. And so, when you look at that and if you get into the situation where you have a lot of vehicles that we call the pink polka dots, you’re going to run into trouble. So, we’re watching it closely. It hasn’t been a contagion onto us yet. We’re still seeing strength. And I think primarily because much of our product is new.”
Lawler certainly has reason for concern after Ford inventory levels stood at a 100 days’ supply at the end of April, which was the highest since January and once again far above the industry average, which was 76 days’ over the same timeframe. The Lincoln brand fared even worse at a 144 days’ supply, which was also among the highest among all automotive brands. Though some of this build-up was apparently intentional, FoMoCo has also introduced a number of incentives in an effort to move older inventory as of late, too.
We’ll have more on Ford’s inventory levels soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
Many of us had been noticing dealer lots being full and now the company is starting to acknowledge and admit it. Ominous. You know what comes next......