By on May 3, 2021

If you want to buy a Ford, you might have to hurry.

The microchip shortage could leave at least some Ford dealers short on inventory until perhaps August, according to Automotive News.

One dealership in Michigan even created an emergency fund that its salespeople can draw from.

“We know for sure there’s going to be three months of heartache and hand-wringing,” Mark O’Brien, chairman of Roy O’Brien Ford, told AN. “We don’t want our people having concerns about where the next meal’s coming from.”

The chip shortage could cut Ford’s production output by half this quarter. While there’s never a good time to have production slashed by a component shortage, it’s particularly a bad time as consumer demand for new cars surges as America slowly digs itself out of the coronavirus pandemic.

Not to mention that Ford in the midst of the product cadence of launching a slew of new or redesigned models, including the redesigned F-150, the Bronco and Bronco Sport, and the Mustang Mach-E.

Oh, and did we mention that Ford has also spent several years restructuring in order to impress investors?

Initial predictions suggested the chip shortage would only hurt production at a small level — perhaps a few hundred thousand units. Now, Ford will lose production of 1.1 million vehicles and incur a financial hit of $2.5 billion. Indeed, the company expects to make less money in the final nine months of 2021 than it did in the first quarter of the year.

Ford’s first-quarter net profit was $3.3 billion if you’re wondering. Predictably, its stock dropped 10 percent after this news.

Obviously, Ford isn’t alone when it comes to production shutdowns caused by chip shortages. Volkswagen, Honda, Nissan, and BMW all had halts to production last week.

But Ford does face a challenge that others don’t — nine of Ford’s Tier 1 suppliers use chips from Japanese company Renesas. Renesas suffered a fire in March and isn’t expected to be back to full capacity until July.

Ford said it has a 33-day supply of vehicles right now, and it expects that number to tighten. About 22,000 vehicles, including F-150s, are in a partial state of assembly, waiting for chips.

It’s safe to say things are getting a bit … chippy. Thanks, folks, I’ll be here all week.

[Image © 2020/2021 Chris Tonn for TTAC]

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28 Comments on “Chip Shortage Forces Ford Into Inventory Shortage...”

  • avatar

    Sometimes you just can’t catch a freakin’ break.

  • avatar

    I had lunch with someone from Michigan two weeks ago who claimed to have “friends at GM”. They were supposedly told its not going back to normal for the next three years.

    I’m curious, how is the ostensible shortage impacting Tesla or EV production in general?

    • 0 avatar

      Or pinch tradition ICE suppliers to force them to supply EV, change to non-automotive, or just close their doors.

      • 0 avatar

        A lot of the parts that use chips are the same and there are electric motors on both types of vehicles. Body electronics are mostly the same.

        The shortages I’m experiencing myself is on the chips used in optical sensors like cameras. I have a 6 month wait on those. I’ve been warned about potential shortages with the chips used for solid-state storage device controllers (I love Phison controllers!). I’m also waiting for a new supercomputer that should have shipped the 21st of April and hasn’t moved yet. That could be for a lot of reasons. A smaller milspec supercomputer from another manufacturer arrived the week before without a problem even though it had hard to find NVidia GPUs inside. The one I’m waiting on doesn’t use NVidia or AMD GPUs, so go figure. Although, it’s a much more powerful machine. Next week will probably order some electric motor electronic speed controllers and a quick check shows no problem there.

        • 0 avatar

          Thanks, I figured as such but will be following Tesla sales. I’d be interested to see if they increase amid everyone else’s going down due to lack of production.

        • 0 avatar

          I read that Blackberry QNX has become the go to operating system in cars and commercial trucks. IIRC 68% of vehicles run on it. I’m surprised TTAC hasn’t covered it.

          • 0 avatar

            I’ve heard of that, I was told some years back some of the Westinghouse nuclear equipment used QNX.

      • 0 avatar

        “just close their doors”

        Did you eat a lot of paint chips when you were a kid?

  • avatar

    In my small NW Florida town, the local Chevy dealer has less than 25 new cars on the lot to sell, the much larger Ford dealer down the street has only 10-20 new trucks where they usually have well over 100 in inventory. The Stellantis dealer seems in better shape with lots of RAM’s and Jeeps ready to go. A friend who’s a fleet buyer of trucks has said they’re waiting until next year to buy new vehicles as the demand for supply/demand for retail units as well as daily rental company’s orders has pushed fleet pricing up, reduced incentives and extended delivery dates until fall. I’d guess there are some anxious days in the Ford and GM supply chain offices.

    • 0 avatar

      They likely couldn’t order trucks if they wanted, ok order trucks that they actually want. From my state’s vehicle contract menu.

      Ford cut off orders for 2021 Super Dutys in January and the 2022 order book closed at the end of March. So yeah sold out until 2023. Some Rangers and F-150’s are on order for stock with no expected delivery dates, but new orders have been closed. They did have 1 F-150 regular cab in-stock as of 4/19

      Chevrolet closed their order books by the end of 2020 but the dealer does say they have a few Colorados, 1500s and 2500s in-stock and on order.

      Ram closed the books on the 2021 3/4 and 1 tons as of 3/1 while the new 1500 cut off was 4/7, but hey if you want 2020 1500 classics they have those in-stock.

      Nissan is the only one with order books still open, for both the Titan and Frontier and they have 2020 Frontiers in-stock.

      If you step up to Cab and Chassis the situation is very similar. Order books closed for all but Isuzu and BYD with just a few 3500 and 4500 Rams in-stock.

      • 0 avatar

        My in laws are shopping for a new 3/4ton, to haul their 5th wheel. After finding disappointing inventory levels and deciding used are too pricey right now they are looking at ordering a 2022. They have quotes from Ford Chevy GMC and Ram. They didn’t tell me what Ford was saying on delivery but I gather they couldn’t get the options they wanted at the price they wanted on the Ford(something about not being able to get high enough towing on a gas Lariat)
        Ram and Chevy/GMC told them they can still put orders in, delivery would be Nov Dec, as of right now.

      • 0 avatar

        My local Chevy dealer lot is almost empty. Most of the vehicles there are on the fleet side waiting for delivery. The Ford dealer is about 1/2 of normal. Probably 40-50 pickups. The Chrysler dealer is probably 1/2 of normal too.
        I’m interested in a ZR2 Colorado but right now they are rare all over.

    • 0 avatar
      SCE to AUX

      My local Toyota lot looks noticeably lean right now. They’ve resorted to the same pufferfish space-them-out trick used in the early days of the pandemic.

      Will this raise prices due to scarcity, or lower prices due to dealer eagerness to move product?

      • 0 avatar

        Prices are headed up.

        • 0 avatar

          I was looking at Camaro, Chargers, and Challengers yesterday and things are listed $3K-$5K higher than in 2019.
          Truck incentives and advertised discounts also seem way down compared to a few years ago.

        • 0 avatar

          @mopar4wd – I don’t think prices will go up much. We’ll see a drop in manufacturer rebates. Last year I was seeing 12-14k on carryover models. This year, the rebates were at least 1/2 of last year.

          • 0 avatar

            So far yeah it’s mostly just the discounts going away. My inlaws are getting prices 1-2k under MSRP on 3/4 tons.
            But certain vehicles like Wranglers Gladiators, Tacomas and oddly enough kia Tellurides all seem to be selling for over MSRP near me. Local Toyota dealer has been wiped of truck and SUV inventory for a months now (plenty of Corollas thou)

    • 0 avatar
      Funky D

      “In my small NW Florida town, the local Chevy dealer has less than 25 new cars on the lot to sell, the much larger Ford dealer down the street has only 10-20 new trucks where they usually have well over 100 in inventory.”

      OK, I just had to see this for myself and all I can say is, WOW!

      I counted just 9 Rangers at the Ford dealer. And the Chevy dealer was indeed a desert. Even the used car section was only about half full. Glad I am not going to be in the market for another year or 2. Just hope I don’t have any electronic part failures this year!

  • avatar

    I just read a blurb from Bloomberg saying the rental car companies are buying used cars at auction now to fill inventory.

  • avatar

    It currently takes 3 *months* to get an appointment at the Nevada DMV. Maybe if they quit selling cars for a few months, the DMV can catch up on the backlog!

  • avatar

    It’s basically a Toyota way of life. But for now “Big 3” pickup buyers will also lose selection, get options they don’t want and pay full MSRP for the pleasure too. Add missing base trucks and what’s the Big 3 really losing?

  • avatar

    Can confirm. There’s a Ford dealer near the freeway overpass. You can see they have maybe 1/3 the usual full lot. I was surprised, not immediately remembering the chip shortage.

  • avatar

    The biggest losers in Fords shortage are the tow truck drivers and service centers. They are going to feel this for a while. No Fords on the road, many fewer vehicles to tow and fix.

  • avatar

    When supply chains go bad! The moment when “JIT” becomes “Oh $#!&!”.

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