Ford Temporarily Shuts Down Mustang Production To Decrease Inventory Before Winter Doldrums
Update: Added official statement from Ford.
Ford Motor Company is briefly shutting down production of the Ford Mustang at the car’s Flat Rock, Michigan, factory in a quest to avoid ballooning inventory ahead of the winter months, Bloomberg reports.
Year-over-year, U.S. sales of the Ford Mustang tumbled 32 percent in September 2016 in response to rapidly elevating incentives on the Chevrolet Camaro. As the Camaro outsold the Mustang for the first time since October 2014, Mustang sales fell to a 23-month low, causing inventory at the end of September 2016 to rise to an 89-day supply, up from 71 days of supply one month earlier.
The temporary idling at Ford’s Flat Rock facility will allow Ford to bring U.S. Mustang inventory down to more appropriate levels. 60 days of inventory is considered normal.
Traditionally, Ford gleans only 45 percent of the company’s annual Mustang volume over the October-March period, as sales in northern climes dwindle during winter months. Thus, an 89-day supply heading into October is much more troubling than it would be heading into April.
Ford expected Mustang sales to decrease somewhat in calendar year 2016 as 2015’s eight-year high was partly the result of pent-up demand and excitement for the all-new sixth-generation Mustang.
One year later, after sliding 6 percent through the first seven months of 2016, Mustang volume took a 17-percent dive in August before the Mustang lost 3,027 sales in September.
Ford Motor Company’s quick October response to excessive supply stands in stark contrast to GM’s strategy with the Camaro. Chevrolet tripled Camaro incentives from August to September after Camaro inventory had exploded to a 139-day supply at August’s end, but the U.S. sales results of that MY2016 clearout weren’t exactly explosive.
Year-over-year, GM’s pony car posted a 25-percent improvement, but the Chevrolet Camaro only outsold the Ford Mustang (which saw incentives decrease about 10 percent in September) by only 148 units last month.
By no means was September’s Camaro performance successful in dramatically reducing Camaro supply. At month’s end, Chevrolet still had 120 days of Camaro supply, more than double the industry norm.
GM is on track to sell around 70,000 Camaros in the United States in 2016, which would become the lowest-volume year for the nameplate since the fifth-gen’s abbreviated introductory year of 2009.
Ford is still on track to sell more than 110,000 Mustangs in 2016. Prior to 2015, Ford hadn’t crested the 100K marker since 2007.
Mustang production will begin anew on Monday, October 17. “We continue to match production with demand,” Ford’s Kelli Felker told TTAC this morning. “Mustang remains the top seller in its segment in total and retail sales.”
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