Ford's 1st-Quarter Sales Drop in the US

Company to add more SUVs and trucks to its lineup

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Apr 04, 2019
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Ford Motor Co. (F, Financial) released its first-quarter sales results on Thursday. On the back of changing consumer tastes, the automaker plans to adjust its lineup in favor of pickup trucks and SUVs as they, along with vans, accounted for 83% of the company’s total quarterly deliveries.

The Michigan-based automaker no longer reports monthly sales.

About the quarter

Ford’s first-quarter U.S. sales fell 1.6% to 590,429 units as robust demand for SUVs, vans and pickups could not offset the decline in passenger cars.

Car sales plummeted 23.7% to 98,265 units, while sales surged 5% to 213,086 units for SUVs and 4.1% to 278,898 units for trucks.

In a statement, Mark LaNeve, vice president of U.S. marketing, sales and service, said first-quarter sales were "solid."

"Our winning portfolio continues to deliver," he said. "F-Series expanded our leadership position while others slugged it out for second place. We have a close connection with our customers, allowing us to deliver what they need in their trucks. It can also be seen in our record sales of Ford SUVs as well as Lincoln’s significant growth."

Key highlights

The F-Series pickup truck had an astounding quarter as its sales volume surpassed its nearest competitor by 95,585 units. The brand had an average transaction price of $47,454. In addition, incentive spending for the F-Series was the lowest among all major full-size pickups.

Ranger sales totaled 9,421 units, while sales of the Transit Connect climbed 34.7% year over year.

Lincoln brand sales rose 11.2% in the first quarter thanks to robust sales of its SUV lineup. In contrast, Focus sales plunged more than 70%. Expedition sales amounted to 21,773 vehicles, up 61.9% on a year-over-year basis.

Ford to phase out sedans in favor of SUVs and trucks

The second-largest automaker is cutting down on production of sedans. To boost sales, the company will roll out new Explorer and Escape SUVs as well as a new Lincoln Aviator later this year. This is a strategic move considering consumer tastes have transitioned from passenger cars to trucks and SUVs.

Ford believes the upcoming SUV launches will comprehensively offset its exit from the sedan division. It has already begun to see an increase in the average transaction price on account of higher sales of trucks and SUVs as compared to traditional cars.

Disclosure: I do not hold any positions in the stocks mentioned.

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