Ford dealers are running out of the new Explorer.
With its share growing, even as the U.S. automotive market shows stronger signs of recovery, Ford Motor Co. says it will upping production for the rest of the quarter – and is anticipating further increases later in the year.
The Detroit maker says it is struggling to meet demand for some of its newest models, notably the Ford Explorer, the completely-redesigned sport-utility vehicle that was voted North American Truck of the Year, last month, by a jury of 49 U.S. and Canadian automotive journalists.
Ford says it will now roll out 13% more vehicles than it had originally projected, during the first quarter of 2011, for a total of 555,000 cars, trucks and crossovers.
“We are running flat out right now,” Ken Czubay, Ford’s head of sales, service and marketing, told reporters following a meeting with the company’s retailers, at the annual convention of the National Automobile Dealers Association.
Significantly, the number of Ford dealers now in the black has risen to 80%, a trend echoed by other makers, including Detroit’s Big Three. The Detroit News reports 90% of General Motors retailers are currently profitable – up from 40% a year ago – while 80% of Chrysler’s dealers are turning a profit.
That trend is considered likely to continue as long as automotive sales momentum remains positive. The domestic market pushed above 11 million, last year, a double-digit increase, and analysts such as J.D. Power and Associates are forecasting combined retail and fleet volumes will push into the mid-12 million range for all of 2011.
January sales, though down sharply from December’s torrid pace, are still tracking above 12 million on a seasonally-adjusted basis. And, if anything, that is posing problems for a number of makers.
Ford, for example, has been struggling to keep up with demand for the all-new Explorer, which was shifted from a conventional body-on-frame, truck-based platform to a car-based crossover design with the 2011 remake. The new design earned in the Car of the Year designation, among other kudos. And, more significantly, it has built such strong demand for Ford currently has just a 10-day supply of Explorers on dealer lots. The industry considers a 60-day supply the norm.
Ford’s Czubay told reporters, “You should expect to see continued increases (in production) as the year goes on.”
The maker isn’t alone. General Motors has already upped output at a number of plants in both the U.S. and Canada, while Chrysler is boosting production at some of its facilities. That notably includes the Jefferson Ave. North plant, in Detroit, producing the Jeep Grand Cherokee and Dodge Dakota crossover/SUVs.
Both were finalists in the North American Truck of the Year balloting, and the Grand Cherokee was just named finalist by the World Car of the Year nominating committee. Explorer did not make that cut.
Detroit industry officials have been cautious when it comes to outlining future production plans, in part because of a seemingly new-found discipline that puts the emphasis on pull, rather than push-based marketing. Makers are hoping to avoid the massive build-up in inventories that occurred prior to the 2008-09 market meltdown. Even as sales collapsed, companies like Chrysler were forced to lay out billions in excess incentives to clear dealer lots.
Overall, industry incentives remained flat to slightly down, last month, though General Motors – along with Toyota – ordered big increases to bump up start-of-the-year-sales.
Ford has been more cautious, but the maker did tell dealers, in San Francisco, that it would introduce a $50 bonus for each car sold with the voice-activated Sync infotainment systems. The figure jumps to $75 for each equipped with Ford’s MyFordTouch, a more complex, touchscreen and voice-controlled technology.