Higher prices on profitable models including large pickups and SUVs have helped increase revenue and operating profit in North America, even while the global chip shortage cost it market share, the company said during an analyst call. That has contributed to Ford boosting its 2021 profit forecast along with attempting to reduce excessive dealer inventory. Jim Farley, Ford CEO, said the OEM was intent on moving away from making vehicles that wind up stockpiled on dealer lots, shifting instead to a build to order model. “We are really committed to going to an order-based system and keeping inventories at 50 to 60 days’ supply” Farley said in the call. The shift would allow for the reduction in incentives associated with moving excess vehicles.  The move to a build to order approach has been an aspirational goal for many OEMs over the years, only to succumb to allowing inventories to build, requiring incentive money to move. “I know we are wasting money on incentives, I don’t know where.” Farley said.

For more: https://www.reuters.com/business/autos-transportation/ford-raises-full-year-profit-outlook-after-stronger-than-expected-quarter-2021-07-28/

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