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Ford moving to Build-to-Order and away from inventory

ChompSticks

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it would suck if my car was totalled or in an accident and I needed a new replacement right away.
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Well theyā€™ve done a great job with it so far.šŸ˜‚
 
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From The Drive, James Gilboy Ā»

International chip shortages forced all major automakers to dial back production and prioritize only their most profitable products. These emergency measures, however, opened eyes at Ford, whose CEO and resident vintage racer Jim Farley has revealed hopes of changing Ford's manufacturing model to one of building only what it knows it can sellā€”and thus turn a profit from.
Farley told Reuters that Ford has "committed" to moving away from a traditional boom-and-bust cycle of flooding dealers with low-margin vehicles, then leaning on incentives to move inventory, sacrificing profits. This business model, seemingly sidelined by the chip shortage, forced Ford to allocate its limited microchip supply to profitable models. This reportedly came with the benefit of increasing revenue by almost $5,000 per vehicle, according to the publication.
"We are really committed to going to an order-based system and keeping inventories at 50 to 60 days' supply," Farley told Reuters. "I know we are wasting money on incentives. I don't know where."
The rest of the article is here Ā»
 

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The trend in manufacturing is made to order with fewer storage stockpiles. More and more people are purchasing vehicles on the internet without test driving them. Brick and mortar retail stores are going away in favor Amazon and other web based shopping.
 

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604Bronco

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Canā€™t come soon enough. Iā€™ve never ordered from Tesla, but it seems to be an easy, user-friendly experience. I think itā€™ll take some time to make this big shift, however I think itā€™ll be welcome.

Might be a generational thing, where younger customers are more open to this than older, but thatā€™s just sheer speculation.
 

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I am sure lobbists and the government will find some way to stop it and line their pockets.
 

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So who is going to fix it when it breaks? Honor warranty work? While I am not a huge fan of dealers one thing that is lost sight here is the giant dump manufacturers take on them like making them take cars they donā€™t want or need. Cutting their profit margin while increasing theirs. Also where do you think all these people will work if dealers are gone? I hope you are also excited about universal income. You are going to be trading one set of problems for another.
 

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Canā€™t come soon enough. Iā€™ve never ordered from Tesla, but it seems to be an easy, user-friendly experience. I think itā€™ll take some time to make this big shift, however I think itā€™ll be welcome.

Might be a generational thing, where younger customers are more open to this than older, but thatā€™s just sheer speculation.
Tesla also only has limited color choices, typical 5-6 and very few configuration options and no one but tesla can work on your car.
 

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From The Drive, James Gilboy Ā»

International chip shortages forced all major automakers to dial back production and prioritize only their most profitable products. These emergency measures, however, opened eyes at Ford, whose CEO and resident vintage racer Jim Farley has revealed hopes of changing Ford's manufacturing model to one of building only what it knows it can sellā€”and thus turn a profit from.
Farley told Reuters that Ford has "committed" to moving away from a traditional boom-and-bust cycle of flooding dealers with low-margin vehicles, then leaning on incentives to move inventory, sacrificing profits. This business model, seemingly sidelined by the chip shortage, forced Ford to allocate its limited microchip supply to profitable models. This reportedly came with the benefit of increasing revenue by almost $5,000 per vehicle, according to the publication.
"We are really committed to going to an order-based system and keeping inventories at 50 to 60 days' supply," Farley told Reuters. "I know we are wasting money on incentives. I don't know where."
The rest of the article is here Ā»
Well, it's about time.
 

lobbs611

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So who is going to fix it when it breaks? Honor warranty work? While I am not a huge fan of dealers one thing that is lost sight here is the giant dump manufacturers take on them like making them take cars they donā€™t want or need. Cutting their profit margin while increasing theirs. Also where do you think all these people will work if dealers are gone? I hope you are also excited about universal income. You are going to be trading one set of problems for another.
You convert existing dealerships into service centers.... You keep a small fleet for service loaners and demos for test drives. Most of the profit for dealerships is in used car sales and service. Not new car sales. I'd be willing to bet there's a potential for massive savings not having to maintain a huge inventory of new vehicles just sitting around waiting to be bought.
 

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That would be great. But Ford wouldnā€™t let the dealers do that, trust me if given the choice I know my dealer, who is a single make small family owned operation. Just like with this bronco mess. Your reservation stamp is less important than the dealer you ordered through. Small dealers with 5-10 orders will be some of the last to get units. My dealer has people that want to buy raptors, gt500 and heā€™s been told by Ford he isnā€™t allowed to order them. Ford and most manufacturers are big on blaming everyone else for problems they cause
 

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So who is going to fix it when it breaks? Honor warranty work? While I am not a huge fan of dealers one thing that is lost sight here is the giant dump manufacturers take on them like making them take cars they donā€™t want or need. Cutting their profit margin while increasing theirs. Also where do you think all these people will work if dealers are gone? I hope you are also excited about universal income. You are going to be trading one set of problems for another.
My last oil change went up $20 from the previous one and is now close to $80. They will find a way.
 

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So who is going to fix it when it breaks? Honor warranty work? While I am not a huge fan of dealers one thing that is lost sight here is the giant dump manufacturers take on them like making them take cars they donā€™t want or need. Cutting their profit margin while increasing theirs. Also where do you think all these people will work if dealers are gone? I hope you are also excited about universal income. You are going to be trading one set of problems for another.
Dealers get the majority of their revenue from service. So, they will keep servicing, believe me. This new "plan" Farley is talking about would eliminate dealers taking cars they don't want or need so not sure what your argument is there. The cockroaches will find other work. Possibly Amway or Herbalife?? LMAO
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