Digging into the Ford sales fraudI have recently posted links to videos about how the parking lots of legacy truck dealers are filling up.
I have also posted how about how US auto sales in 2022 were 13.8 million, made up of 2.9 million cars and 10.9 millon light trucks.
The inclusion of the word "fraud" in the title of this post may be a bit overdramatic but not really. Ford isn't committing fraud, but the way they keep score is sketchy imo. Ford records a wholesale sale to its dealers when the vehicle rolls out of one of their plants despite the fact that there is no end buyer. Ford has been using its 3,400 dealers in Canada and the USA as inventory dumps since the beginning of dealerships. BTW, the same practices are used by GM and Stellantis.
During Covid, every vehicle that was made got snapped up by customers at grossly inflated prices due to shortages, so the practice of counting wholesale sales to dealers was not a big deal. As a result, Ford posted fantastic numbers in 2022 and again in Q1 2023.
Today, things are very different for Ford. The $70,000 sticker prices for a basic truck or $100,000 sticker prices for upscale models are sitting and sitting and sitting on dealer lots. It has gotten to the point where dealers don't have any more room to store them. So what is going to happen? Either Ford starts slashing prices to get rid of inventory, or, Ford has to cut prodution like GM did recently.
Bottom line is that I think trucks are going to get a lot cheaper in a hurry. Otherwise, US legacy auto makers are going to have to slash production. The legacy boys need to get rid of that inventory before Telsa drops the CyberTruck bombshell on the industry by the end of Q3. Even though Tesla won't start producing in volume until 2024, if the Cybertruck gets priced around $60,000 Fords and GMC's and Rams better sitting on lots to be in trouble.
I used to own a construction company. Tradesmen love their trucks but they are also notoriously cheap when it comes to expenses. If they can buy a CyberTruck for the same price as a F150 or GMC or Ram, that they can operate at about 1/10 the cost, guess what they are going to do.
The salvation for the legacy auto makers is that it is going to take a few yeaers for Tesla and other EV makers to ramp up production of light trucks. But when they do, it is all over for ICE vehicles. When it is all over for ICE, Suncor better have an alternative plan in place.
Below is a link to a video talking about how the Days of Inventory on Ford lots (in New Jersey and Washington....the locations don't matter as the same thing is happening all over America). I suggest starting at the 1:40 mark and watching to the 3:00 mark to see the actual data (the rest is vloggers doing their blah blah blah)