Cost of Production continue to Rise. Automakers will be forced to Respond.

[ReimundKrohn]

I am involved in the production and sales of Industrial Equipment. That is in fact what I have been doing for 22 years now. 2021 has been a roller coaster like no other: with prices of steel and copper and aluminum and freight and electronics jumping in price monthly. This is absolutely unprecedented in my lifetime, and most people don’t seem to understand exactly where this could be heading.

Ford is in trouble, but they’re not the only ones. Everybody is demanding price protection on their unbuilt orders, but what most folks don’t seem to consider is that Ford doesn’t have price protection themselves. They buy parts and materials on the open market and even if they have supply contracts, those contracts have clauses to cover vendors from selling at a loss.

Chip manufacturers are now talking about a 20% price increase for their semiconductors. Those higher prices are going to be passed on to consumers, believe it. If your build is at your max budget, and you don’t have a believable build date yet, take time to consider what the cost might be when you finally get the call that your build is in.

Some people are saying now is NOT the time to buy a new or used vehicle, prices have risen too dramatically this year. That is smart advice… if this trend is going to reverse itself. Right now, it doesn’t look like it will…. Not for a year or two or three. If you are approaching end of lease, or are reliant on an unreliable automobile, you might want to start investigating your options.


https://www.autocar.co.uk/car-news/...d-manufacturing/world’s-largest-semiconductor

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[PrepVet]

Same here. Our commodities availability has been all over the place and our costs have sky rocketed. We’ve had to raise prices several times, luckily I am not in sales nor finance so I just have to worry about running one of the shops. lol

 

[IfIHMadeA2021Scout]

We ordered a Bronco Sport in March at X-Plan. Ford increased the price $400 on the sticker when we took delivery in July.

I think what you write has merit.

 

[OrlandoBroncos]

Yep. Every industry is impacted.

https://gizmodo.com/get-ready-to-pay-more-for-the-iphone-13-1847564294

 

[Lilj4425]

So is Ford going to be taking a loss on each Bronco sold this year and next then due to the price guarantee?

 

[Drex]

So is Ford going to be taking a loss on each Bronco sold this year and next then due to the price guarantee?

Maybe on the base, the others will just make less. I can envision them raising the invoice price for everyone to damn close to MSRP, then holding MSRP for the price protection, knowing full well the dealers will just add more over and the invoice deals will automatically jump, but they will have kept their promise of holding MSRP.

 

[PSUTE]

Inflation rears its ugly head. For you who have not lived through it, it sucks. Grocery prices rising week to week. Housing through the roof, vehicles with 4X year MSRP increases. Interest rates quadrupling to control it. Good times!!!... ...

 

[ReimundKrohn]

So is Ford going to be taking a loss on each Bronco sold this year and next then due to the price guarantee?

Given Ford’s track record on keeping promises, coupled with how dire the situation is… draw your own conclusions.

In the end, MSRP is just that / Manufacturers Suggested Retail Price. There are a lot of charges that get piled on top of MSRP when it comes to sale price, not all of them from the dealer. In other words, the promise made doesn’t even mean what people think it means.

 

[BroncoAZ]

If the price protection is gone I will walk away. I ordered a 2021 model Bronco after reserving a year prior. If they delivered by truck this year they wouldn’t have to worry about price protection and possibly just breaking even on it. I’m interested to see how much everything goes up when the 2022 build and price opens. I have a sale document for my 2021 order at MSRP from my dealer, I will demand the same with the price protection numbers in writing for my 2022 order.

I understand the commodities, chip shortages, etc, and am generally sympathetic. One of the vendors I use called me about an 18% price increase on a work trailer I ordered in March 2021, the manufacturer adjusted the price three times in the 5 months between me placing an order and them building it. They should’ve purchased the materials when I placed the order and fixed my price at that point, but they didn’t apparently. It’s a weird market and I agree it’s only going to get worse. It’s certainly not just cars. Boat manufacturers are currently selling out their 2023 build slots, outboard engines are a year out, shit is getting real. I have twenty 2022 Chevy trucks ordered for the business, I honestly have no idea how many will show up or when.

 

[ReimundKrohn]

 

[Val916]

We ordered a Bronco Sport in March at X-Plan. Ford increased the price $400 on the sticker when we took delivery in July.

I think what you write has merit.

You let them change the price on you after you had a signed agreement?? I think thats actually against the law in some states

 

[airishfan]

You let them change the price on you after you had a signed agreement?? I think thats actually against the law in some states

you dont sigh papers tell it comes in and you take delivery ,he order at one price and when it came in it was at a other price there is nothing you can do . There is nothing saying that vehicle has to be sold to you I have heard from people who orders vehicle that the dealer sold it before they came in .

 

[Razorbak86]

People were saying the same thing about lumber prices in the spring, but they peaked and then plummeted in recent months.

Source: Wood you look at that: Lumber is cheap again

So I’m not entirely convinced that rising commodity prices that are currently affecting the auto industry will stick long term.

I think labor prices are more sticky than commodity prices, because once employers give employees raises, it’s very difficult to take them back without the employees leaving to go work elsewhere.

 

[Val916]

you dont sigh papers tell it comes in and you take delivery ,he order at one price and when it came in it was at a other price there is nothing you can do . There is nothing saying that vehicle has to be sold to you I have heard from people who orders vehicle that the dealer sold it before they came in .

If you have a sales agreement they can‘t sell it to anyone else nor can they change the price on you. Attached is the copy of the sales agreement with private info cropped out. Its paperwork from Ford and says right there the price is agreed upon, they cannot change it once its signed. If someone orders and doesn’t get a signed agreement then they are just straight up dumb.

 

[IfIHMadeA2021Scout]

If you have a sales agreement they can‘t sell it to anyone else nor can they change the price on you. Attached is the copy of the sales agreement with private info cropped out. Its paperwork from Ford and says right there the price is agreed upon, they cannot change it once its signed. If someone orders and doesn’t get a signed agreement then they are just straight up dumb.

There there are a lot of dumb people on this board with deals done at "MSRP" or "X-Plan" or "% under invoice" that are just dumb. Maybe I'm dumb for selecting a dealer for a reservation and agreeing to a price at "MSRP" or "X-Plan" or "% under invoice" before Ford ever finalized pricing. Maybe Ford is dumb for offering "price protection" for people with orders that are "99" or pushed to 2022. Maybe dealers on this board are dumb for offering such plans when Ford did not finalize pricing yet. Maybe we're all dumb for not agreeing to a set number when we did not know what incentives would be available at the time a vehicle will be built months into the unknown future.

Or maybe...........

You just don't understand.

Oh wise one! Please enlighten us how you special ordered your Bronco through the reservation process and had a VIN at the time of the order!

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