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Ford Plans Move Toward Build-to-Order Vehicles

On a conference call with reporters, Ford Motor Company CEO Jim Farley said the automaker would begin shifting away from loading dealerships up with inventory in favor of a build-to-order system like that commonly employed outside the U.S.

Reuters quoted Farley as saying, “We are really committed to going to an order-based system.”

Farley didn’t rule out keeping some inventory of cars for sale immediately on dealer lots, but he said Ford would aim to have fewer cars available.

In Europe, automakers typically keep a few demonstrator cars at dealers. Consumers then order the exact specification they want and then wait for it to be delivered. Here, dealers see car buyers as more impulsive, so dealers have long sought to sell and deliver vehicles to their new owners as quickly as possible.

At least in Europe, the upside to this is that automakers tend to offer far more trim and equipment combinations than they do in the U.S., where costly packages group numerous options together in an attempt to please as broad an audience as possible. It’s unclear if moving to a custom order system will prompt Ford to make additional combinations available.

The ongoing new-car shortage is caused mainly by an inability to secure microchips essential to vehicle production, which has some automakers seeking to change the way they stock dealers with vehicles. Large dealer inventories mean plenty of extra costs involved in storing and insuring vehicles, and in turn, automakers tend to offer spiffs to help dealers offset those profit-eaters. See Ford models for sale

Andrew Ganz
Andrew Ganz is an author specializing in helping in-market consumers get the most bang for their buck -- and the best car, while they're at it. When not virtually shopping for new and used cars, Andrew can probably be found under the hood of a vintage classic that's rapidly losing fluids.

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