The supply of core pickups is recovering at an accelerated pace! Ford Motor Company (F.US) F-150 monthly production hit a two-year high; new car sales in August were still under pressure

The Zhitong Finance App learned that Ford Motor Company (F.US) said on Wednesday that after a fire at an aluminum supplier had a serious impact on the production of F series pickups, the company is continuing to increase the production of this core model. It is expected that more pickups will arrive at dealers in the coming weeks and months. However, as the supply side is gradually returning to normal, Ford's sales in the US market are still under pressure. New car sales fell 10.3% year on year in August, showing a year-on-year decline for the eighth month in a row.

“We are increasing production,” said Rob Kaffl, Ford's head of sales in the US. Over the next 30, 60, and 90 days, dealers will begin to see increased supply due to increased production. The number of vehicles currently in transit and throughout the sales system is at a healthy level.”

According to data released by Ford on Wednesday, production of F series pickups, including the F-150 and other large models, has increased month by month since this year, and has now returned to near historical normal levels, and in some months it is even slightly higher than historical levels. Among them, Ford produced a total of 57,504 F-150s in August, the highest monthly production in the past two years.

Kaffl said that as production continues to resume, the overall supply of products available to Ford dealers is gradually returning to normal levels.

The F series pickup truck is one of Ford's most important product lines and a key source of the company's profitability. Over the past year, production of this core model was severely impacted by an upstream supply chain incident.

Ford aluminum supplier Novelis had two fires last year at its plant in New York State, which interrupted plant operations for a while and directly affected Ford F-Series pickup truck production. Ford expects this supply chain incident to cost the company about 1.5 billion US dollars this year. In order to make up for lost production and meet the backlog of demand, Ford has been increasing production levels this year. Currently, some production has exceeded the same period last year.

Although production is rapidly recovering, Ford dealers' current F-Series pickup inventory is still below normal. Currently, dealers have about 40 days of pickup truck inventory, which is only about half of what the automotive industry used to think is healthy.

Kaffl reiterated that Ford hopes to increase F-series pickup truck inventory to 50 to 60 days at this stage, which is still below the 75-90 day level normally maintained by the industry in the past. This means that Ford is speeding up the replenishment of dealer inventory, but it is not planning to simply return to the higher inventory levels in the past, but rather wants to bring production closer to actual market demand.

“We are being very targeted to ensure that production matches demand,” Kaffl said. As production increases, Ford expects more F series pickups to arrive at US dealers in the next few months to support sales previously limited by insufficient supply.

However, the recovery in F Series production capacity has yet to translate into an improvement in Ford's overall sales volume.

According to data released by Ford on Wednesday, the company's new car sales in the US fell 10.3% year on year in August. This is the eighth month in a row that there has been a year-on-year decline. Sales of the F series pickup itself have also yet to return to last year's level. In the first eight months of this year, F series sales volume fell 10.9% year on year, with August falling 1.2% year on year.

In addition to the previous insufficient supply of the F series, Ford said that this year's year-on-year sales performance was also affected by other factors.

The company discontinued production of two models earlier this year, making this year's sales face a higher base compared to the same period last year; at the same time, Ford also took the initiative to reduce fleet sales to Japanese car rental companies, which also depressed overall sales.

Calendar factors also had an impact on sales data for August. Labor Day weekend in the US has always been an important promotion point for car sales, but this year's Labor Day fell in September, while last year fell in August, so August last year had an additional holiday sales boost, which also made the same period of this year more difficult.

The slowdown in Ford sales is not an isolated phenomenon; overall demand in the US automobile market is also cooling down. The company expects the overall sales volume of new cars in the US auto industry to drop by about 6% year on year in August.

Against the backdrop of weakening industry demand, Ford, on the one hand, needs to make up for the loss of production capacity caused by supply chain accidents by increasing F series production, and on the other hand, it also needs to avoid excessive production at a time when market demand is slowing down, so as to re-accumulate excessive inventory.

This is also an important reason why the company limited its F-Series target inventory to 50 to 60 days instead of returning to the level of the past 75 to 90 days.

For Ford, the key over the next few months will be whether the F-Series supply recovery will help the company improve sales performance. F-150 production reached a two-year high in August, which means that the supply problems that previously limited this core product line are being mitigated; however, with Ford's US sales falling year on year for eight consecutive months and demand in the automotive industry as a whole cools down at the same time, it remains to be seen to what extent the recovery in production capacity will eventually translate into an increase in sales.