The Ford Motor Company has decided to switch its focus to made-to-order deliveries over the rest of this year, compared with maintaining big inventories.
In the automaker’s Q2 2021 earnings call, James Farley, chief executive officer, said that the company will make this move to deal with the continuing shortage of semiconductor chips. In doing so, the company will utilize chips for current orders, instead of assembling vehicles that will lie on dealership floors for weeks.
Ford is banking on customers ordering vehicles online, which will give them easier access as well as shorter delivery times, Farley added. The carmaker is also providing its dealership network with a model-specific sales forecast to maintain the necessary inventories.
Farley noted that this strategy will benefit both the company and its customers. He also pointed out that Ford is working with LG Chem and will enter a joint venture with SK Innovation to strengthen the supply of electric vehicle batteries for models like the F-150 Lightning and the Maverick.
John Lawler, the chief financial officer, indicated that Ford continues to allocate its resources in the best way possible to mitigate supply chain risks and expects a 30pc increase in production volumes by the end of the year, leading to a strong early-2022 performance.