Tuesday, Apr. 11, 2017, 05:20 PM UPDATED 2:41 PMBy Joe Overby
NEW YORK -
Ford executive Joe Hinrichs isn’t fretting over off-lease volumes hitting the auto market, but it is something he is watching.
The off-lease volumes — particularly in the car segments, where supply and demand aren't exactly matching these days — isn’t necessarily going to dramatically change the way Ford runs its business, he said.
That said, it is something the Blue Oval is going to monitor “pretty carefully.”
In a Q&A on Tuesday at the 2017 Automotive Forum in New York — a portion of which was livestreamed by NADA, including this session viewed by Auto Remarketing remotely — Hinrichs was asked by Automotive News publisher Jason Stein if the off-lease volume surge “worried” him.
“Maybe worried’s too strong, but concerned,” said Hinrichs, who is the automaker's president of the Americas. “But also this is a natural reaction to demand and supply.”
Three to four years ago, Hinrichs said, cars held a larger slice of the new-vehicle sales pie, with SUV sales seeing a more dramatic increase in the last five years. And during the economic downturn, there wasn’t a whole lot of leasing. But of course that soon changed.
Leasing picked up. And more cars were being leased, Hinrichs said, including at Ford.
“And so what’s happening is, as a percentage of the vehicles coming back, more cars are coming back than is matching up with demand,” he said. “So there is a lot of pressure on used cars, because of the mismatch between what’s coming back to the auctions and what the demand is.
“That should settle down. Maybe after this year. There’s a lot coming back this year, too,” he said. “And it should settle down a bit because in the last couple of years, we’ve been doing more SUVs that would match up with demand presumably in the future.”