Ford announced a series of plant and production scheduling actions aimed at reducing mounting inventories for the company’s midsize and full-size, full-frame trucks due to a sharply lower demand in light of surging fuel prices and overall economic weakness. Ford’s actions also reflect a significantly weaker light-vehicle US sales outlook for 2008, now ranging from 14.4 to 14.9 million units.
Many actions were anticipated ahead of the announcement and are reflected in the June forecast, however, Ford will now delay the launch of the redesigned F-series [P415] by about two months as it works to clear inventory of the current F-series [P221]. The launch will occur in August at Kansas City #2, followed by a September start of production at Dearborn Truck after an extended shut down idling output for most of 3Q 2008.
The launch delay contributes to sharply lower 3Q 2008 production levels as Ford cut its production guidance by 50,000 units. The estimated volume impact to the June North American production forecast setting amounts to ~50,000 units and aligns closely with Ford’s revised figures. The June forecast remains in line with Ford’s restated 4Q 2008 settings, yet, it will depend on the company’s ability to sell down units in inventory within the weak market environment. Per Autodata, US inventory at the end of May for both F-Series [P221] and Super Duty [P356] accounted for 226,000 units or a 142 day supply.
While production settings for full-size truck entries is weaker, the June production forecast already reflects a stronger outlook for more fuel-efficient entries including Focus, Fusion, Escape and Edge. Though the impact at Ford is significant, all manufacturers active in full-frame truck segments are being materially impacted by weaker demand.
Announced plant and product actions are detailed below and we will continue to monitor events and provide additional updates as warranted.
For questions, please contact:
Joe Langley
Senior Analyst, North American Vehicle Forecasts
at joelangley@csmauto.com or +1 248 465 2832
Mike Jackson
Director, North American Vehicle Forecasts
at mikejackson@csmauto.com or +1 248 465 2833
