Automakers are seeing improvements in their supply of computer chips, but shortages continue to disrupt production.
The latest reading on the situation came from Ford Motor Company on Wednesday, Earnings rose nearly 20% in the second quarter A year ago, a global chip shortage hit the business seriously.
The automaker posted a profit of $667 million, up from $561 million a year ago. Revenues increased significantly from $ 26.8 billion to $ 40.2 billion, thanks to higher vehicle sales and higher prices.
Globally, Ford sold just over one million vehicles in the last quarter, a surge from 764,000 in 2021.
“Demand is being boosted and dealers are selling vehicles as soon as possible,” Ford Chief Financial Officer John Lawler said on a conference call.
However, most of these numbers are still below what is considered normal. In his pre-pandemic 2018 and his 2019, Ford’s Q2 sales exceeded his 1.4 million units, even on a weaker model line than its current model line.
Over the past two years, Ford has redesigned the F-150 Pickup and added several much-talked-about vehicles, including the new Bronco Sport Utility Vehicle, the electric Mustang Mach E, and the electric F-150 Lightning. It also stopped making cars for the US market, with the exception of the Mustang Coupe.
On Tuesday, General Motors also reported higher earnings, helped by an increase in chip supply. But the company, too, has been unable to get as many chips as it would like and is unable to sell as many cars as its customers would like to buy.
GM said this month it has 95,000 cars built without specific electronic components affected by chip shortages. The company plans to complete them and ship them to dealers by the end of the year.
On Wednesday, Ford said it has 53,000 vehicles awaiting final electronic components before shipping.
Automakers such as Ford and GM are benefiting from rising new car prices. That’s one reason Ford’s second-quarter earnings were up his nearly 50%. But at the same time inflation is driving up the cost of raw materials and parts. Ford said he expects a $4 billion increase in materials costs this year.
GM said costs would increase by about $5 billion. Second-quarter earnings were down 40% to $1.7 billion for him, largely due to higher costs.
Ford’s chief financial officer, Lawler, said Ford is well prepared if the economy hits a recession. He said he has plenty of cash, low dealer inventory and a large order bank for Broncos and other vehicles.
“We are in a much better position for a potential recession than we ever thought possible,” Lawler added.
He also said Ford is reshaping nearly every aspect of the company. .
“When new skills are needed, old skills are no longer needed, and there can be a shift in the types of skills the company has,” he said.
This year, Ford split its business into two divisions. One is focused on electric vehicles, which are expected to grow rapidly and require significant investment in new technologies and factories. The other focuses on the production of gasoline models and focuses on controlling costs and generating profits.
