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post #1 of 3 (permalink) Old 06-25-2007, 11:12 AM Thread Starter
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Seeking Alpha. Ford's Inventory Mix:What the Heck is a Crossover



Ford's Inventory Mix: What the Heck is a 'Crossover' Vehicle?
Monday June 25, 4:16 am ET

Jerry Marks (AutoRetailStocks.com) submits:
The world ain't all sunshine and rainbows. It is a very mean and nasty place It will beat you to your knees and keep you there permanently if you let it. You, me or nobody is going to hit as hard as life. But it ain't about how hard you hit, it is about how hard you can get hit and keep moving forward, how much can you take and keep moving forward. That's how winning is done!
Source: Memorable Quotes for the movie Rocky Balboa (2006), Imdb.com

Ford's Inventory Mix

As you may recall, earlier this month I said that based on data provided on Ford's May sales conference call, Ford dealers might be stocked with too many trucks and not enough cars.

I articulated this concern because the mix of car sales were over 50%, but dealer inventories seemed disproportionately weighted toward trucks.

Earlier this week, Mr. Pipas (Ford's head of sales analysis) emailed me and explained some of the confusion:

Your comment reminded how I can get myself into trouble going back and forth between traditional views of the business (i.e., cars and trucks) and more contemporary views (car based products vs. truck based products). Thank you.

The inventories provided on the call were based on the traditional view. 160,000 cars represented 29% of ending May stocks. As you noted, there is a big disconnect between 29% inventory and 52% sales. It would have been helpful had I noted some of the truck inventory were crossovers. In fact, 74,000 units of the truck inventory was crossover. (Escape, Mariner, Taurus X -- the product formerly known as Freestyle -- Edge and Lincoln MKX). So, that would make a total car/crossover inventory of 234,000 accounting for 42% of total inventory. Closer to 52% but still shy of our May sales mix. By the way, I think June sales mix of cars/crossovers will be higher than 50% as well.

Another subtle adjustment would be to tell everybody what the retail inventory is -- since the 52% referred to retail sales. For your information, Ford inventory includes all inventory including units ordered for fleet customers. In addition, it includes "in transit" inventory (generally worth about two weeks of production). . .

However, using retail only inventory shows the same picture 42% is cars/crossovers.

Source: George Pipas, head of sales analysis, Ford Motor Company

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post #2 of 3 (permalink) Old 06-26-2007, 12:54 PM
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Re: Seeking Alpha. Ford's Inventory Mix:What the Heck is a Crossover

Crossovers are not Trucks


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post #3 of 3 (permalink) Old 06-26-2007, 01:28 PM Thread Starter
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Re: Seeking Alpha. Ford's Inventory Mix:What the Heck is a Crossover

Quote:
Originally Posted by Mbukukanyau View Post
Crossovers are not Trucks
Not at least in the light of those who say that trucks are not selling anymore. The whole idea is that CUVs offer you the best of both worlds, all the versatility of an SUV and the drivability of a car. This may seem confusing to the common folk that is not into cars the way we are here. That is pretty much the point of the article.

I give credit to this analyst that is ready to admit in public when he blew it.





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