The second largest U.S. automaker Ford (F, Financial) posted a U.S. sales decline of 3.1% for July year on year to 194,026 vehicles. The company’s year-to-date sales were down 2% to 1,471,717 units.
The results weren’t shocking given the portfolio of cars that the company currently has. In fact, it is believed that sales would be on the rise once new models start arriving over the coming two years.
Snapshot of the month
While the Blue Oval witnessed a 25.7% gain in fleet sales, its retail sales plummeted a mammoth 10.4% to 142,842 units as sales of Ford Focus were disappointing (dropping 50% year on year). The company had stopped producing the Focus in May, but the dealers are selling down the remaining inventory. Mark LaNeve, Ford vice president, U.S. Marketing, Sales and Service, optimistically said:
"Ford pickups and vans dominated last month, with overall trucks posting an increase of 10%. Combined, pickup, van and SUVs totaled 153,402 vehicle sales, for a 4.8% gain. We have now sold more than 1.1 million trucks and SUVs this year.”
Ford EcoSport sales in July came in at 5,354 units. Escape and Edge sales Plunged 25.57% and 9.02%, respectively. Further, Explorer sales totaled 20,243 vehicles, which grew approximately 8%. However, that could not offset the decline witnessed by other models.
Lincoln sales dropped 11% to 7,898 units. The drop was attributable to decline in the sales of the MKX, MKZ and MKC. In contrast, Navigator was in huge demand in every region of the country, up 62.7% to 1,191 units.
F-Series shows strength
F-Series sales for the month of July amounted to 70,949 units that reflect a 2.13% gain from the same period last year. This marked its 15th successive month of year-over-year sales growth. F-Series continues its dominance in the U.S. regardless of the company’s struggle to revive sales of other brands.
F-Series’ average transaction price for the month soared $1,500 per truck to $46,200.
Dearth of fresh products
Ford’s inability to grow its sales in the U.S. can be attributable to the lack of new and redesigned models in its portfolio. For instance, Ford Escape urgently calls for a redesigning as its current version hit the market six years ago. Ford Explorer also hasn’t had any invigoration or redesigning for a long time. This can be very critical as both Escape and Explorer make up roughly 40% of the company’s non-truck and van sales volume.
Last word
In the short run, the company will continue witnessing sales declines, as the company’s major roll outs will happen in 2019 and 2020. In 2019, the company will introduce a fresh and redesigned Escape and Explorer. Further, the company will reintroduce a Ranger midsize pickup in 2019. In 2020, the company will roll out a Ford Bronco off-road SUV. However, as far as 2018 is concerned, the company will unsurprisingly face sales a decline.
Disclosure: I do not hold any position in the stock mentioned in this article.
