By Jordyn Grzelewski
From The Detroit Information
Ford Motor Co.’s U.S. sales plunged by one-third in August in comparison with the earlier yr amid an industrywide slide pushed by a semiconductor scarcity that has dragged on since late final yr and pushed new-vehicle inventories to historic lows.
Ford bought 124,176 new autos within the U.S. final month, down 33.1 p.c from August 2020. Truck gross sales dropped 29.4 p.c whereas SUV gross sales fell 25.3 p.c, in line with outcomes the automaker launched Thursday.
Gross sales of Ford-branded SUVs had been down 24.4 p.c year-over-year, with across-the-board decreases for nameplates that had been on sale final yr. EcoSport was off 64.4 p.c. Escape gross sales had been down 32.6 p.c. Edge gross sales fell 39.2 p.c. Gross sales of the Explorer and Expedition, respectively, dropped 56.9 p.c and 12.4 p.c.
The brand new full-size Bronco SUV had 2,730 gross sales, down from 3,277 in July, whereas the smaller Bronco Sport SUV posted 6,698 gross sales, up from 2,306 in July.
In the meantime, Ford bought 57,321 items from its F-Collection truck franchise, the corporate’s revenue driver. That was down 22.5 p.c from August 2020. Gross sales of the Ranger, Transit, Transit Join, and heavy vans additionally had been down, whereas E-Collection vans eked out a 4 Percemt achieve.
Ford’s electrified automobile gross sales—which embody hybrids—had been 8,756, up 67.3 p.c over final yr. The all-electric Mustang Mach-E SUV posted 1,448 gross sales in August, down from 2,854 in July.
Mustang gross sales of two,263 autos had been off 51.1 p.c. Lincoln model autos had been down 44.3 p.c. 12 months-to-date, Ford’s gross sales are down 5.4 p.c.
Nonetheless, some Ford sellers are shrugging off the gross sales droop. Jim Seavitt, proprietor of Village Ford in Dearborn, stated August was a strong month for the dealership. As Ford managed to ramp up manufacturing in August, he noticed deliveries enhance towards the top of the month and is optimistic about September.
“We did effectively, with 140 new automobiles and 100 used (bought), and that’s fairly doggone good for the chip disaster,” he stated.
Gone are the times of conserving upwards of 500 autos on his lot, he stated. As an alternative, his salespeople are getting used to ordering autos after which promoting them as quickly as they’re delivered to the dealership. Within the meantime, they’re working with prospects to increase their leases if wanted.
In response to manufacturing information reported by the corporate, output improved from July to August. Amid widespread manufacturing cuts as a result of chip scarcity, Ford’s North American vegetation produced 125,736 autos in July. In August, that rose to 226,065. The corporate’s gross automobile inventory stood at 214,500 on the finish of the month.
In the meantime, Ford highlighted progress in its retail orders, noting it introduced in 41,000 orders in August, up 4 instances from a yr in the past.
Ford executives say the automaker will rely extra closely on an order financial institution system going ahead, which means prospects reserve their autos upfront. The automaker reported that 30 p.c of its retail gross sales in August had been instantly filling buyer orders, up from 6 p.c final yr. The corporate had 52,000 autos in its order financial institution as of the top of the month.
Reservations for the forthcoming battery-electric F-150 Lightning truck reached 130,000, the automaker reported. And the brand new Maverick compact pickup truck now has generated greater than 100,000 reservations.
Whereas Ford’s gross sales droop was extra dramatic than that skilled by a few of its rivals, it was not alone. American Honda gross sales, for instance, had been down 15.6 p.c year-over-year. Toyota Motor North America gross sales fell 2 p.c. And Hyundai Motor America gross sales had been off 4 p.c..
Forward of the discharge of August gross sales numbers, analysts and forecasters projected a month of latest information characterised by low gross sales, stock ranges and incentive spending, however excessive pricing and demand.
“The month of August is traditionally a peak promoting month as producers launch promotional occasions to clear inventories of outgoing model-year autos and start gross sales of the brand new mannequin yr,” Thomas King, president of the info and analytics division at J.D. Energy, stated in a press release. “This yr, nevertheless, the trade has inadequate stock at dealerships to fulfill sturdy client demand.”
J.D. Energy reported that sellers within the U.S. had about 942,000 autos in stock out there for retail sale in August, down from 3 million two years in the past.
“Though stock is arriving at sellers every day, it’s merely changing the autos being bought, stopping sellers from rising inventories to a degree essential to assist the next gross sales tempo,” stated King. “This implies the gross sales tempo is being dictated by manufacturing ranges somewhat than precise client demand.”
Sellers are promoting autos as shortly as they get them in inventory. Final month, greater than 49 p.c. of autos had been slated to be bought inside 10 days of arriving at a dealership, in line with J.D. Energy, up from simply 26 p.c in August 2019. And the agency projected that the typical variety of days a brand new automobile sits on the lot earlier than being bought would fall to a file low of 26 days, the primary time on file beneath 30 days and down from 62 days a yr in the past.
In the meantime, J.D. Energy projected one other new file in August: an all-time excessive common transaction value for the trade of $41,378, the primary time the determine was above $41,000. Retailer revenue per unit, too, was slated for an all-time excessive of $4,430.
Ford reported that its common transaction value in August hit a brand new file of roughly $50,800 per automobile, a $9,700 enhance over final yr.
In the meantime, analysts anticipate the constrained circumstances to persist within the brief time period, with the chip scarcity anticipated to stretch into 2022.
“Ongoing provide chain points and up to date bulletins of additional manufacturing cuts by a number of producers imply that the mixture stock state of affairs is unlikely to meaningfully enhance in September,” stated King. “In some situations, it’ll deteriorate.”
For automobile consumers, this implies a a lot totally different Labor Day weekend than regular, specialists say.
“Buyers accustomed to Labor Day promotional occasions with giant reductions on outgoing model-year autos will seemingly be disenchanted by the dearth of reductions and selection of autos,” stated King. “However as August demonstrates, there are many consumers prepared and in a position to purchase at greater costs with much less selection.”
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