Ford Down 7.7% in October, Mostly Due to Cars

Ford’s overall vehicle sales were down in October, but the results appear to support the automaker’s decision to phase out several sedans while focusing instead on more profitable and popular trucks, SUVs and CUVs.

Its U.S. car sales for the month were down 20.3% to 414,870 units, while light-truck deliveries fell only 4.1% to 1,601,891, based on the daily sales rate as tracked by Wards Intelligence. There were 26 sales days this October compared with 25 a year ago.

Overall, Ford- and Lincoln-brand deliveries combined for 2,016,761 units through October, down 7.7% daily.

Model segments losing volume for both brands in October compared with year-ago were luxury cars (-34.3%), small cars (-24.6%), midsize cars (-17.4%) and large cars (-8.3%). Even the segments Ford pins its hopes on reflect weakness: Pickup trucks were down 11.2%, while CUVs were off 4.6%.

Van sales were up 0.9% to 17,353 units for the month, while the only segment exhibiting significant growth for Ford was SUVs, up 15.8% on the strength of the recently launched Ford Expedition (+68.0%), Lincoln Navigator (+63.4%) and Ford Explorer (+8.6%). A new Explorer launches next year.

The most luxurious (and most expensive) Black Label versions of the Navigator averaged just 12 days on dealer lots in October, and average transaction prices for the luxury SUV represent gains of $30,300, the automaker says.

The Navigator’s top market remains California, where its sales nearly doubled in October. Explorer deliveries reached 21,935 units for its best October since 2004, the automaker says.

But Ford is preparing for a monumental shift in its product strategy: Both Fiesta and Taurus will end production next spring, while Focus and C-Max has been offline since May as inventory is being cleared out. Fusion will go away in the next few years, after a recent midcycle refresh. The Mustang will remain in the lineup.

At Lincoln, brand managers say there are no plans to discontinue the Continental and MKZ sedans, although October deliveries were down 44.2% and 29.7%, respectively, based on DSR.

Mark LaNeve, Ford vice president-U.S. Marketing, Sales and Service, says the automaker must react to consumer behavior.

“It’s a breathtaking, generational decline that we’ve seen in sedans over the last seven or eight years,” LaNeve says on a phone conference to discuss results with analysts and media.

Four years ago, he says, it appeared sedan sales were leveling off. “It didn’t level off – actually it accelerated in ’16 and ’17, so that was the key driver,” he says, referring to the need to boost overall margins.

“We certainly feel that the portfolio changes that we have talked about and those we haven’t talked about will service and meet not only changing consumer demands but will work positively toward overall margins as well in North America,” he says.

The automaker is counting on all-new models launching next year to feed the bottom line. The cadence calls for the Ranger midsize pickup first, followed by the Explorer, Lincoln Aviator and then the Escape. The highly anticipated return of the Ford Bronco SUV follows in 2020.

Asked if shoppers are beginning to respond negatively to increasing interest rates, LaNeve says he doesn’t sense panic.

“I think you’re seeing good discipline from ourselves and most of the major OEMs not chasing volume with what I would call exuberant or over-ambitious incentive spending,” he says.

Ford U.S. sales analyst Erich Merkle points to overall industry retail sales being down only 1%. “Given the higher interest rates and disciplined incentive spend from automakers, to be down 1% we think is a pretty strong industry still,” Merkle says.