Ford Suffers Under Inflation, and That's Affecting Buyers
Ford and other companies are still reeling from the effects of the global pandemic.
Written by Andrew Kidd
Reviewed by Kathleen Flear
In a gut punch to people still hoping for their new vehicle orders to be filled,
Ford
recently indicated that things probably aren't returning to normal anytime soon.Ford has stated that the supply-chain issues impeding many businesses—especially automakers—still haven't been completely resolved.
Lingering effects of the pandemic
As reported by
The Street
, these issues were both sparked by and made worse by the COVID-19 pandemic, which compelled. automakers to stop production at plants in some areas due to lockdowns intended to stop the virus's spread. Automakers also had to contend with a semiconductor shortage, which saw a work stoppage because several models couldn't be built without them.
After Russia invaded Ukraine earlier in 2022, raw material costs skyrocketed, adding some challenging hurdles to sourcing these materials, especially for electric cars.
Both Russia and Ukraine are key suppliers of the raw minerals used to make electric vehicles.
Many hoped the supply scarcity would improve with the reopening of the different economies, especially with reports of a drop in demand for semiconductors, which led some to believe the industry had cleared the chip shortage nightmare.
Unfortunately, it seems Ford is still feeling the hurt thanks to the lingering effects of the pandemic.
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Shortages still affecting automakers
Ford recently revealed that between 40,000 and 45,000 automobiles are now being partially produced; the automaker notes that since it lacks all the necessary components, it will not be able to complete production on them by the end of the third quarter.
That means dealerships that were planning to sell these cars in the third quarter won't get them when they expected it—and that the wait is being passed on to consumers.
It doesn't stop there, either. Ford predicted that it would have more "vehicles on wheels" than anticipated in its inventory waiting for necessary parts due to supply bottlenecks.
Deliveries expected by end of year
The automaker expects that the majority of those vehicles—the automaker's high-margin trucks and SUVs—will be finished and sold to dealers during the fourth quarter.
Per The Street, semiconductors nor other technological components are missing from these vehicles, and Ford hasn't said which parts are missing or which cars are affected.
Ford isn't the only one dealing with supply-chain issues. General Motors warned in July that it has 95,000 incomplete vehicles in its inventory owing to a shortage of components.
Ford also cautioned about a weakened economy and the detrimental effects of rising inflation, which is at its worst level in 40 years.
The company is worried that the economy may enter a recession as the Federal Reserve is expected to raise interest rates.
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