Ford only wants orders to reduce wasted sales

Produce and distribute to dealers for sale. This is a common sales method for traditional manufacturers and some luxury brands. This way it ensures that the car is delivered immediately to the consumer who always appears in the store.

However, this program produces goods that do not sell immediately and some models and / or versions take longer than best to leave the store. Then discounts for evacuating factories and shops.

According to Reuters, Ford has admitted to losing a lot of money on discounted new car prices. Damage is even greater as the chip crisis intensifies in the United States, where Dearborn automaker lost less than 700,000 cars in 2021.

So Jim Barley, Ford’s CEO, said the company has decided to change its sales strategy based on a model familiar to Tesla. Despite the increase in operating profit in the first half, the company was only able to sell pickup trucks and SUVs.

Even so, owning one is still beyond the reach of the average person. Thus, car makers decided to stop production for cars and produce only the models ordered by customers.

Thus, Ford will be able to keep the chips needed for production and reduce customer discounts. Jim Foley talks about keeping inventory with supply suppliers for 50 to 60 days, removing them in a timely manner.

As stocks in stores dwindle, Ford and other brands are betting on higher value-added models to compensate for lower production.

The company posted $ 1.5 billion more operating profit in the last quarter, earning nearly $ 5,000 more than the car sold. It is rumored to be close to Ford chip suppliers and stored in semiconductors.

By 2021, Ford expects operating profit (before tax) of between $ 9 billion and $ 10 billion, about $ 3.5 billion more. That is, the American brand gains in the sale of expensive cars, even if it loses in production.