Superconductor shortages have hit the Ford and the automotive industry hard. Few automakers have been as deeply affected as Ford. The brand has cut more models from production than any other automaker. Now, Ford has announced it will be raising prices on 11 models and cutting all buyer incentives. This announcement comes just days after buyer incentives had been raised.
Ford cuts incentives days after raising them
To drum up sales, Ford recently doubled its Retail Order Incentive Program from $500 to $1000. This program rewards buyers for ordering out-of-stock vehicles with a cash-back offer. The incentive was retroactive, covering all new orders placed after April first, 2021.
The Retail Order Incentive Program essentially paid Ford customers for their patience. How long that patience will have to extend is largely anyone’s guess. Some industry experts have estimated that the chip shortage will take years to resolve fully. Others have been more optimistic and feel the market my normalize early next year. This promotion was slated to last through July sixth.
In a dealer letter delivered June second, Ford announced the end of nearly every buyer incentive program. A selection of APR offerings, all incentives based on trim level, package or series, FMCC Bonus Cash, Select Inventory Cash, Retail Bonus Cash, Retail Customer Cash, and more were canceled, effective immediately. These incentives will be replaced with a simplified and more consistent program, but further details have yet to be released.
Prices rise on a list of models
Ford has announced the details of price increases on most of its models. The Edge will go up $500 in price on all trim levels. All trim levels of EcoSPort will see a $400 increase. The Escape’s S trim will go up $670. Mustang Mach 1 buyers will see a $680 rise. Ford Bronco Sport pricing will go up $540 on both the Outer Banks and Badlands trim levels.
All trim levels of Explorer will see a $250 increase in price. The Expedition will increase $600 on all trim levels. The Ford Ranger will increase by $250 on all trims, as will the Super Duty. The Transit and Transit Connect will both go up $250 on all trim levels as well.
Several Lincoln models will receive similar price hikes. The greatest increase will hit the 2022 Lincoln Aviator Reserve, which will see a $905 increase. Price increases will likely look similar to those applied to specific Ford models and follow similar patterns.
New incentives will focus on trade-ins
Moving forward, Ford will be focusing its incentive efforts on Trade-in Assistance Incentive. This program focuses on getting Ford buyers the most trade-in value toward the purchase price of certain 2021 F-150, Ranger, Mustang, Expedition, Edge, Explorer, Bronco Sport, Escape, and EcoSport models.
Chip shortages have had a catastrophic effect on new car inventories. Many companies have been forced to slash production, Ford among them. Some estimate the brand may cut production up to 50% by the end of the year. These sudden changes to existing Ford incentive programs are a response to these dire shortages. It’s likely incentive programs will become more robust when the chip shortage ends.