DETROIT -- Ford Motor Co. says it will end February with its inventory of 2011 Explorers at only 60 percent of what it had expected.
"The sales levels are not letting us get the inventory up," said George Pipas, Ford's chief sales analyst, during a media briefing today as the industry prepares to release February U.S. sales results on Tuesday.
Ford had expected to end February with about 5,000 Explorers in stock, Pipas said, adding: "I'll be lucky if we have 3,000 in stock at the end of February."
That's about a 14-day supply, he said.
Ford began building the 2011 Explorer in December at its Chicago Assembly Plant. The redesigned crossover went on sale later that month. In January, Ford idled the Chicago plant for a week because of a shortage of an engine part, Pipas said. That contributed to a production delay.
Ford sold 7,351 Explorers in January -- a 73 percent increase over January 2010. And some dealers are struggling to get stock of the redesigned vehicle to meet demand.
No models in stock
At McRee Ford of Dickinson, Texas, owner Mitchell Dale has sold 25 Explorers in the past two months. Some of those were 2010 models.
Dale has no 2011 models in stock.
"I have eight that are coming in the next 30 to 35 days. Six of those are already sold. We've taken deposits on them," Dale said. His dealership sells about 1,500 new vehicles annually.
"They are flying out as fast as you go," Dale said. "Unless Ford adds some additional production, I don't see us having availability much at all for the next six months or so."
To increase Explorer inventory, Pipas said, Ford has shifted its production mix at its Chicago plant away from the Ford Taurus and Lincoln MKS sedans and toward the Explorer. He declined to be more specific.
No boosts in incentives
Meanwhile, Pipas said Ford does not intend to boost incentive spending on any products despite incentives by some competitors.
General Motors Co. is offering to waive the last three or four monthly payments on existing GM vehicle leases held by Ally Financial Inc. if holders lease or buy new vehicles. Ally Financial is the largest U.S. new-vehicle lender. It started as a GM unit and still receives most of its business through GM and Chrysler dealers.
GM's nationwide program is for any GM customer whose lease ends in the next six months.
Ford's average incentives in February were about $3,300 per vehicle, Pipas said. That's about equal to its January spending. He said Ford does not feel pressured to raise incentives because its average transaction prices are rising and it has gained a small percentage of market share in nearly every region of the country.
Average transaction prices on Ford vehicles in January and February are up by about $700 to $800 per unit, Pipas said. And except for the 2011 Explorer, inventory remains in line with demand.
"So what is Ford going to do? Ford's going to keep doing what's been doing," Pipas said.
Dealer Dale agrees Ford's incentives are about right. But he worries that rising fuel prices could push the automaker to offer heftier incentives on some larger vehicles.
"I don't blame the company for not playing the incentive game anymore," Dale said. "I just want to make sure that we keep the day supply at this pace in the event something blows up in the Middle East. I think they're taking a smart business approach. We lived a long time with a propped up false market."