Ford sales tumble again as product overhaul continues

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Ford Motor Company (F -0.18%) said its U.S. sales fell 1.3% in the fourth quarter as strong truck sales weren’t quite enough to overcome Ford’s decline in SUV and sedan sales.

For the full year, Ford’s US sales were down 3%. This lagged the overall market performance: U.S. light vehicle sales fell about 1% in 2019, according to Automotive News.

Sales of the Ford Transit commercial van increased nearly 12% in 2019. Image source: Ford Motor Company.

Highs and lows of Ford’s 2019 sales report

The strong points :

  • Sales of Ford’s most important product line, the F-Series full-size pickup trucks, rose 1.6% in the fourth quarter. F-Series sales were down 1.4% for the year as Fords lost ground to fresh produce from General Motors and Fiat Chrysler Automobiles, but Ford managed to retain the pickup truck sales crown for the 43rd consecutive year. An all-new F-150 is expected to launch later this year.
  • Sales of Ford’s Transit and Transit Connect minivans rose sharply in the third quarter, up 17.7% and 17.3% respectively, and for the full year (11.7% and 30.3%, respectively) ). It’s bigger than you think: Commercial fleet sales are a significant strength and source of profits for Ford worldwide, and CEO Jim Hackett has made this category a priority for future investment. These results show that the market is reacting well.
  • Ford sold 89,571 midsize Ranger pickup trucks in the US in 2019. That’s good but not great – in line with expectations, but lagging behind major rivals like the Toyota Tacoma and Chevrolet Colorado. But it’s solidly ahead of the 70,832 Rangers Ford sold in 2011, the model’s last full year in the US market.
  • Ford Explorer sales fell 14.6% in the fourth quarter compared to the same period a year ago. But it remains a highlight, as the approximately 48,000 sold were well ahead of the 31,546 delivered in the third quarterwhen the company was working hard to overcome early manufacturing issues with the all-new 2020 model. There’s still room for improvement, but things are looking up: Ford said December was the best month for sales retail of the new Explorer since its launch in June.
  • Two years after a new much improved version Ford Expedition started arriving at US dealerships, buyers are still flocking to the big (and hugely profitable) Ford. Expedition sales increased 71.6% in the fourth quarter (to 24,267) and 58% for the full year.
  • Sales of the luxury brand Lincoln, another key source of profit for Ford, rose 17.8% in the fourth quarter and 8.3% for the full year. Results were driven by strong demand for the new Aviator and Corsair crossovers, as well as the continued success of the Expedition’s luxury sibling, the Lincoln Navigator.
  • ALG, a TrueCar subsidiary that tracks leasing and sales information in the U.S. market, estimates Ford’s average transaction price (ATP) hit a healthy $41,054 in December, with incentives at 11.4% of l ‘ATP – two solid numbers and both improved from November.
A red Ford Expedition, a full-size truck-based SUV.

Ford’s Expedition continued to sell well in the fourth quarter. Image source: Ford Motor Company.

The low points:

  • Ford’s decision to drop most of its sedan and hatchback models in the US will likely lead to improvements over time, but it will cost it a lot of sales in 2019. Sales of the compact Focus fell 89 percent, or more than 100,000 units, in 2019, and the large Taurus sedan’s 65 percent year-over-year decline accounted for nearly 20,000 additional lost sales. Only the tiny Fiesta managed to increase year over year, as Ford offered deep discounts to eliminate dealer inventory.
  • Sales of the Ford Escape compact SUV fell 23.5% in the fourth quarter and 11.3% for the year. That’s not entirely unexpected – Ford was launching an all-new Escape at the start of the quarter – but it’s something to watch as we enter 2020. The Escape is an essential model for Ford, in a hot – and fiercely contested – market segment.

The takeaway for Ford investors

Did Ford do enough in the fourth quarter to deliver on its promises? reduction in forecast for the full year? At least in the United States, I think it does: if ALG’s estimates are correct, Ford’s incentive spending may not have increased as much as the company had expected when it adjusted its guidance in October, and sales of its profitable pickups and pickups remained strong. We’ll know more when Ford releases its fourth-quarter and full-year results in a few weeks.

The raw numbers

Here’s how Ford’s fourth-quarter and full-year U.S. sales results compare to those of its five biggest rivals.

Car manufacturer Fourth quarter 2019 U.S. sales Change compared to Q4 2018 2019 annual sales Change from 2018
General Engines 735 909 (6.3%) 2,887,046 (2.3%)
Ford 601 862 (2.2%) 2,422,698 (3.5%)
Toyota engine 604 017 0.3% 2,383,349 (1.8%)
Fiat Chrysler Automobiles 542 519 (2%) 2,203,663 (1%)
Honda engine
401 961 1% 1,608,170 0.2%
Nissan engine 301 291 (18.4%) 1,345,681 (9.9%)

Data sources: Automobile manufacturers.

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