Ford Not Worried by Dwindling Supply of Key Products

DEARBORN, MI – Ford is running low on inventory of several key products, but the dwindling days’ supply of popular vehicles such as the Fusion and Focus cars, and Escape cross/utility vehicle and Explorer SUV is not a problem, a key executive says.

“Inventories of a number of our products are lower than we traditionally would carry, but we still have plenty,” Joe Hinrichs, president-The Americas, tells WardsAuto at a media event here. “We’re at levels where our Japanese competitors used to carry their inventory.”

At the end of May, the Fusion’s days’ supply stood at 39, the Escape was at 46 and the Focus and Explorer were at 33 and 28, respectively, according to WardsAuto data. Auto makers typically consider a 60 days’ supply ideal.

Plans call for added capacity for the Fusion beginning at Ford’s Flat Rock, MI, joint-venture assembly plant later this year, but the auto maker is unable to ramp up production at the other facilities where its other best-sellers are built.

Ford’s Louisville, KY, plant, where the Escape is produced, and Wayne, MI, factory that makes the Focus, are running flat out, seven days a week with 3-crew operations, Hinrichs says, adding he still believes the auto maker will have a sufficient supply.

Ford’s Chicago plant, where the Explorer is built alongside the Taurus sedan, is running at near capacity, but Ford is taking steps to boost the SUV’s output. “We’re increasing our supply base capacity for Explorer,” he says. ‘That’s where the limits are. It’s a very hot product.”

Explorer U.S. sales soared 33.8% through May to 84,646 units, according to WardsAuto data. Focus and Fusion deliveries in the same timeframe increased 1.2% and 21.7%, respectively, while the Escape was up 29.6% to 127,932.

“The key question is when do we get to a point where we have one too few, rather than one too many,” Hinrichs says of Ford’s inventory. “That’s the fine balance we’re trying to have. We don’t want to have one too many. We’ve been there before.”

Hinrichs also says Ford plans to hold steady on the price of its Focus battery-electric vehicle, even as competitors begin offering heavy incentives for the slow-movers.

Focus BEV sales have been stagnant, with just 723 deliveries through May. However, the auto maker’s hybrid deliveries have been better than expected, especially for the Fusion and Lincoln MKZ midsize sedans, Hinrichs says, taking the pressure off the Focus EV. 

“We’ve seen a lot of movement on price on electric vehicles because the consumer demand isn’t to the levels probably people were forecasting,” he says. “But you manage your fuel economy in many different ways, and with our growing portfolio of small (and hybrid) cars, we’re making a lot of progress on overall fleet fuel economy.”

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