Ford Has Too Many Cars

A new survey by Cox Automotive that covers the supply of cars by brand shows Ford Motor Co. (NYSE: F) has a huge inventory based on an industry yardstick. Often, this is a sign of low demand.

In January, new vehicle sales dropped 25% from the previous month. The cars available for sale measured by “days’ supply of inventory” also increased to an industry average of 96 days. The analysts suggested that weather was a major reason for low sales.

The total national inventory of new cars as of February 3 was 2.92 million. The average list price was $48,637. Six brands made 57% of new car sales during January. They were Toyota, Ford, Chevrolet, Honda, Kia, and Hyundai.

Among major brands, Ford and Buick had the most days’ supply of inventory. Each posted a number of 138. The report says, “While most brands sit on an average supply of prior model year vehicles, Ford is weighed down by 63% of model year 2024 in inventory.” Ford’s inventory has a high number of pickups, which can post high numbers because of multiple configurations.

In contrast to the Ford numbers, the brand with the fewest days’ supply inventory was Lexus at 39. It is the luxury brand of Toyota. The Toyota brand also has an usually low figure at 40. No other brands had a number below 50.

In the latest Consumer Reports study of new car reliability, Lexus ranked second behind Subaru, which had a score of 68. The Lexus number was 65. The Toyota brand ranked third in the study with a score of 62. Ford ranked 13th with a score of 44.

It is hard to know for certain whether car brand sales are based on reliability and the data from large research studies, but a body of evidence supports this thesis.

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