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IPFS News Link • Transportation

Paying People to Not Buy What Sells

•, By eric

Some have been waiting more than a year for a Bronco – which Ford revived for the 2021 model year (my review can be found here). It has been a hugely successful vehicle for Ford. It is – clearly – the kind of vehicle lots of people want to buy.

No subsidies – or mandates – needed.

In the old normal, Ford would build more Broncos to meet the market demand for them. The whole point of being in the car business once-upon-a-time being to sell as many vehicles as people wanted to buy. But we live in the New Abnormal. It is characterized by – among other things – the building of vehicles for which there isn't market demand, because government requires them to be built.

Irrespective of whether they can be sold at a profit.

The first one is 39,458. This is the number of Mach-e "Mustangs" (my review of this one can be found here) that Ford sold last year (2022). The second number is 94,031. That is the number of Broncos Ford sold during the same time period. In other words, Ford sold more than twice as many Broncos as Mach-e "Mustangs" – and could have sold many more had there been more Broncos to sell.

That is to say, if Ford had built more Broncos.

Which Ford could probably have done, had it not devoted manufacturing capacity and raw materials etc., to the building of Mach-e "Mustangs," for which there is much less demand – and probably no profit, as the Mach-e is an EV and these have an established track record of being so expensive to build they must be sold at a loss.