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How new car shortages may impact your buying experience

If you want further proof that the auto industry is bouncing back, look no further than the empty lots and forecourts of your local dealership. According to a story by The Wall Street Journal, continued high demand for mainstream cars is overtaxing automakers' ability to produce enough models. Several dealers interviewed for the story are reporting two-week supplies as opposed to the typical two-month allocations.
With sales expected to hit 1.4 million units when August numbers arrive shortly and incentive spending down to its lowest amount since January, these limited supplies are pushing prices even higher. For example, according to the WSJ, the average price of a Ford Fusion is up past $26,000. Unfortunately, it's difficult for manufacturers to increase production quickly. If it invests in its facilities, as many manufacturers have done, it risks wasting cash if growth suddenly slows. At the same time, the momentum gained over the past several years could be short lived if vehicle supplies continue to dwindle. "Manufacturers are in a precarious situation," notes Karl Brauer, a senior director at Kelley Blue Book.
Low interest rates and a wealth of desirable features are also allowing customers to purchase more expensive vehicles while justifying their higher overall price tags, a situation that is compounding supply shortages. Even now, during the annual end-of-summer clearance season, deals on new vehicles are remarkably difficult to come by. According to the report, the Toyota Corolla is in a self-inflicted state of shortage, as Toyota clears out inventory in anticipation of the new 2014 generation arriving in dealers. Ford's supplies should rebound as Fusion production comes on line at its Flat Rock, Michigan factory. The Chevrolet Impala, Honda Odyssey, Civic, and Accord and Subaru Forester are also facing shortages.

Ford halves summer shutdown, ramps SUV production

For the third consecutive year, Ford is reducing the length of its summer shutdown for several factories to keep up with high demand for some models. This year, the decision means 40,000 more units of popular trucks and crossovers like the F-Series, Edge, Escape, and Explorer. Rather than the normal two-week break, workers at the Chicago, Dearborn Truck, Kansas City, Kentucky Truck, Louisville, and Oakville factories will only get a week off starting on June 29. Additionally, 10 plants for producing components to support these assembly lines will also have the shorter vacation. The rest of the Blue Oval's manufacturing locations will shutdown from June 29 to July 10 for maintenance and retooling. According to Ford, the decision comes because of low inventories and high demand on some of its popular models. The 2015 F-150 is lasting around 20 days at dealers, and the Edge spends an average of 10 days before being sold. Ford is hardly alone in deciding to keep locations open during the normal summer break, though. FCA recently made the decision not to shutdown four assembly plants and all of its factories for components to keep up with demand for models like the Jeep Cherokee, Grand Cherokee, and Dodge Durango. Related Video: FORD REDUCES SUMMER SHUTDOWN TO MEET DEMAND FOR FORD F-SERIES TRUCKS, EDGE, ESCAPE AND EXPLORER JUN 2, 2015 | DEARBORN, MICH. In response to increased customer demand, Ford will add capacity this summer to produce its most popular trucks and utilities Ford will shorten its summer shutdown from the traditional two-week summer shutdown to one week for a majority of North American assembly plants, increasing production by close to 40,000 units In April, Ford F-150 was turning at just 20 days on dealer lots, Edge sales were up 78 percent, and Escape and Explorer remained in tight supply. 2016 Explorers are now hitting dealer lots In response to customer demand for Ford's newest products, the company this year will produce close to 40,000 extra units by idling select plants for only one week during what has been the traditional two-week summer shutdown.. "To meet surging customer demand for our top-selling trucks and utilities, we are continuing to run our North American facilities during the traditional two-week summer shutdown in order to add close to 40,000 units," said Bruce Hettle, Ford vice president, North America Manufacturing.

GM already raising prices on 2014 Silverado and Sierra pickups

General Motors must be pretty pleased with sales of its two newest pickups, the GMC Sierra and Chevrolet Silverado, as it's announced price hikes for both models, as part of a planned price tweak.
Prices will be bumped by as much as $1,500, although weirdly, they'll be offset by as much as $1,500 in cash-back offers through the end of October. Fox Business reports that GM spokesman Jim Cain said of the price hike, "With the sell down of the '13 models nearly complete, this price adjustment was planned and is a normal part of business."
The move, as Fox is quick to point out, is an interesting one, as sales of the twin pickups struggled last month relative to the Ford F-Series, while both of GM's crosstown competitors have been aggressively undercutting Silverado and Sierra prices. The F-150 starts at $24,070 and the Ram 1500 comes in at $23,600, not counting any cash on the hood. A base Silverado, meanwhile, retails at $25,575.