In a recent video, car enthusiast Brandon dropped a bombshell about the state of the car market, with Ford looking especially rough. The video painted a worrying picture: a massive stockpile of unsold Fords clogging up dealerships across the country which could be a sign of a bigger storm brewing in the auto industry.
Overflowing With Unsold Vehicles
Brandon revealed that dealerships are overflowing with unsold vehicles, particularly the F-150 truck. With a whopping 888,246 Ford F-150s in stock, the day supply of these trucks has spiraled out of control.
The Extent of the Surplus
The video showed the extent of the surplus where F-150s were parked in service department parking lots.
The Reason for the Troubles
The root of Ford’s troubles lies in its financial performance. Despite its efforts to stay afloat, Ford’s net income plummeted by 24%. Brandon shared that the company’s reliance on fleet sales to sustain its operations is indicative of the challenges it faces in the retail market.
The Plummet in Sales
Retail sales to consumers plummeted by a staggering 66% year-over-year, painting a grim picture of Ford’s financial health.
Ford’s EV Division
The video also delved into Ford’s EV division, revealing startling losses of $1.3 billion in a single quarter. With each unit costing Ford approximately $32,000 to produce, the EV venture has proven to be a significant financial burden for the company.
The Bright Spot
Brandon shared that one bright spot amidst Ford’s struggles was its Pro division, primarily catering to fleet vehicles. Sales in this segment surged by 120%, offering a glimmer of hope for the troubled automaker.
What’s in the Inventory
However, Brandon added that the bulk of Ford’s inventory comprises high-margin F-150 trucks, which are piling up on dealership lots, worsening the crisis.
Sales Strategy
Brandon’s analysis highlighted the discrepancy between Ford’s fleet sales strategy and its retail aspirations. While fleet sales thrive, retail sales to consumers falter due to exorbitant prices.
The High Prices
He shared the high Manufacturer’s Suggested Retail Price of Ford vehicles. A base 2024 F-150 starts at $39,500, while a well-equipped model can reach $75,600. Even the cheapest Escape clocks in at $36,780.
Shifting Consumer Preferences
The video highlighted Ford’s failure to adapt to shifting consumer preferences, as evidenced by the scarcity of affordable options like the Ford Maverick.
Not Affordable
Furthermore, the absence of traditional sedan models from Ford’s lineup has alienated a significant segment of consumers seeking affordable and fuel-efficient vehicles. Competitors like Toyota capitalized on this void, offering popular models like the Toyota Tundra that resonate with cost-conscious consumers.
The Bonus Strategy
The video also mentioned dealerships offering bonuses of $750 to $1,500 per truck to boost sales, indicating a struggle to move inventory. However, Brandon shared that the effectiveness of such measures remains questionable, given the underlying challenges plaguing Ford’s retail business.
Potential Car Market Collapse
Concluding the video, Brandon suggested a potential car market collapse, particularly for high-priced trucks. With rising interest rates and inflation, consumers might be hesitant to take on large loans for expensive vehicles. He added that Ford’s overreliance on F-150 sales and lack of variety in their offerings could further intensify their problems.
Share Your Thoughts
So what do you think? Can Ford adapt its strategy to survive this potential downturn?
