Once again, automotive is building inventory dues to parts shortages. Semiconductors appear to be an issue again or the issue never went away. Much of this is due to automotive OEMs trying to drive parts cost down to the tiers. Many of them are running tight budgets due to the OEMs. They will not hold inventory unless the OEMs commit to it. The other side of this being Ford splitting it business into two parts, traditional fuel vehicles and Electric vehicles. While Electric vehicles may be a small part right now, for sure they are into the semiconductors the same as the older business. Just a lesser amount of them
“Unfinished Ford Trucks Keep Piling Up in Massive Lots Visible From Space” (thedrive.com), Caleb Jacobs
Blue Oval Ford has made use of Kentucky Speedway’s many lots to store inventory waiting on components. Note the growth in parked inventory from August to September. Inventory laying around costs more than labor.
If you thought parts shortages couldn’t get any worse for the auto industry than they did last year, then it’s time to hit reset. We’ve seen multiple car companies, including international giants like Honda and Toyota, struggle to deliver vehicles simply because they can’t source the components they need. The same is true with Ford, which announced this week that up to 45,000 vehicles will be held in its inventory this quarter until they receive essential parts—mainly chips.
The Blue Oval has made use of Kentucky Speedway’s many lots to store its many trucks until they can be sent to dealers. We reported on this in May 2021, and while Ford eventually worked its way through that stockpile, more started flooding in toward the end of August. Nearly a month later, the situation has gotten visibly worse.
You can see that the auxiliary lots to the east of Kentucky Speedway were just the beginning. Now, the race track is surrounded by thousands of Super Duty pickups that have never even been titled. It’s a clear representation of what Ford and many others, both domestic and international, continue to face as demand far outpaces production capacity.
Pat Brindley Roeder, a Kentucky local who also witnessed the influx in parked trucks last year, says this is just one of the locations Ford is using for storage. She tells me that many more are being held at a former ammunition plant in Charlestown, Indiana, which is about 25 minutes from the Super Duty plant.
In a press release on Monday, Ford noted that inflation-related supplier costs are trending $1 billion higher than originally projected. That’s the last thing anyone wants to hear, especially consumers who will almost certainly shoulder these increases. It’s how business goes and as long as people continue to pay, it’s doubtful we’ll see MSRPs drop much, if at all.
Ford is revealing its next-generation Super Duty on Tuesday, Sept. 27. Of course, it won’t be the company’s first new truck unveiled amidst this manufacturing crisis. One thing you can count on is Ford and every other automaker prioritizing high-margin vehicle production, which definitely includes high-trimmed F-250s and F-350s.
“Global Manufacturing of Semiconductors,” Angry Bear, (angrybearblog.com)