Ford to Implement Incentives as Semiconductor Chip Shortage Starts to Cool

by Jim Peplinski   Posted on Thursday, March 9, 2023

The economic turmoil of the past couple of years has had an unprecedented impact on virtually every sector, and the automotive industry has been no exception. After production shut down for a few weeks, new vehicle inventory steadily declined, leaving automakers unable to build enough vehicles to meet demand. This has caused new vehicle prices to remain at record levels for the past few years, leaving Ford and other automakers scrambling to manage supply chain issues as best they can.

However, Ford CEO Jim Farley believes that prices will begin to cool off this year, as dealer margins begin to drop, and industry-wide transaction prices should fall back around 5 percent in the near term. As these problems ease and Ford works to manage their various supply chain issues, many industry analysts are hoping that we’ll see prices beginning to come down with the start of the new year.

“Coming back to the U.S., as we said, a 15 million unit industry, we think transaction prices will fall about 5 percent,” Farley said while speaking during the automaker’s recent Q4 earnings call with investors.

Just a few weeks ago, Ford Pro CEO Ted Cannis proclaimed that he thinks the semiconductor chip shortage – which has been a problem for almost three years – will start to subside. Ford CEO Jim Farley, however, was not quite as optimistic and noted that these supply chain issues may not be coming to an end anytime soon, and the automaker is doing its best to handle these shortages as best as it can.

While things aren’t just magically jumping back to the pre-pandemic baseline for vehicle supply, it does seem there is an end to the escalation which could potentially impact prices going forward.

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