Ford Halts Mustang Production In The Wake Of Growing Inventory
Dropping demand also contributed in the decision to stop productionby Kirby Garlitos, on
The Ford Mustang may still be dominating the pony car battle in the US, but a combination of rising inventory and falling demand for the ’Stang has forced Ford halt production of the muscle car to get its supply and inventory back up to healthy figures. According to The Detroit News, Ford’s inventory of the Mustang stands at 89 days at the end of the September, which basically means that Ford has enough models to sell for that duration if production stopped permanently.
The number is significantly higher than the company’s target of having a 60-day supply, so Ford is taking the step of thinning down its inventory before re-starting the production of the Mustang. The closure of the Mustang’s production shouldn’t take long since Ford is still selling a healthy amount of the muscle car with 6,429 units sold in September 2016 to bring its year-to-date total to 87,258 units through the first nine months of the year. On the other hand, sales of the Mustang has dropped significantly with the September sales numbers representing a huge drop from the 8,299 units it sold in the previous month. Year-to-year, the Mustang’s sales numbers through September is 9.3 percent down from its sales figures from January to September 2015.
The drop in demand and the rise in inventory has forced Ford’s hand to stop production of the muscle car until the supply and demand evens out, or at least goes back to sustainable numbers.
Continue after the jump to read the full story.
Sign of things to come for Ford and the Mustang?
The headlines are worrisome when you take it at face value. “Ford is stopping production of the Mustang” screams confusion and alarm but the glass-half-full view of this decision is that Ford is simply thinning the Mustang models that it has already built. That’s a smart decision, not only because it gives the facility enough time to focus its work on other items that may or may not be related to the Mustang. Stopping production doesn’t necessarily mean that the Mustang is going to be in trouble of getting axed like what happened to the Dodge Viper. You might even say that this could be a short-term move that will allow the company to move its existing models without adding new ones to the mix.
On the other hand, there’s also the glass-half-empty approach to this decision, which is tied into the slumping sales numbers of the Mustang. While it’s true that the ‘Stang is still poised to finish on top of the sales and market shares chart among the three muscle cars, the fact that the Mustang’s momentum is slowing down is a reason to be concerned about the model.
If sales continue to decline, Ford will likely hold off longer than it wants before resuming production of the car. I don’t know how that’s going to mess up the car’s production table, but I can tell you that it’s not something that Ford wants to to have in place longer than it’s necessary to do it.
Read our full review on the 2016 Ford Mustang here.
Source: Detroit News