Ford Motor Company’s (NYSE: F) full-size truck line Ford F-Series, outsold by Ram and Chevrolet, fell from the top of the sales charts to the third position in the 2Q2021. The last time The Ford F-Series lost its number Uno position in the sales chart was May 2008, triggered by a downfall in the economy and soaring gas prices, when several car models outperformed it. Otherwise, Ford’s full-size truck has been the best-selling vehicle in the U.S. for nearly four decades.
The company attributed the downfall in production and sales to the ongoing semiconductor shortage. The supply-side issues in inventories resulted in the production of 45,008 units of all F-Series models in June’21, suggesting a steep decline from monthly-high for FY2021 reported with the production of 94,305 units in Mar’21. Though the company reported a marginal 1.5% decline in sales through 1H2021.
Production hit by the semiconductor shortage
Ford reported that its production lines continue to manufacture some trucks without all of the required chips. However, such trucks will bulk up their inventory as they will be out for delivery only when all the required parts become available. Erich Merkle, Ford’s U.S. sales analyst, recently confirmed that its top priority is to get chips into F-Series trucks and get them out for delivery. And also mentioned that the inventories are likely to improve during 2H2021. Sam Fiorani, Vice President at AutoForecast Solutions, noted that such inventory issues, triggered by a semiconductor shortage, haven’t happened to the Ford F-Series over the last many years of its sales dominance. However, the ongoing issues with the supply chain may force the company to witness a dramatic hit to its bottom line.
Ford’s plans for a production cut
The company has announced cutbacks throughout July and August, including production halt and shift reductions, at eight facilities. Ford has also planned a four-week idling of the Chicago Assembly Plant, which will likely affect approximately 6,000 workers, who will continue to receive 75-80% of their pay plus unemployment benefits. The Chicago plan manufactures the police and consumer versions of the Lincoln Aviator and Explorer. In addition, Ford has reported that stocks of all of its key models are at historic lows, and it may take several weeks to return to normalcy.