Ford Sales Fall in July Despite Van Surge

Ford sold 210,827 light vehicles in July, down 3.2% on both a volume and daily-selling-rate basis, WardsAuto data shows. July 2016 and July 2015 each had 26 selling days.

Mark LaNeve, vice president-U.S. marketing, sales and service for Ford, blames aggressive deals early last month by General Motors Chevrolet brand for weakness shown by Ford models.

“It wasn’t just pickup trucks, it was across a good majority of their lineup,” LaNeve says of the Chevy promotions, which offered 20% off MSRP of certain cars and 0% financing for 60 months of pickups.

F-Series light-duty sales slipped 1.3% to 61,216. LaNeve notes, that including medium-duty sales, it was the best retail month for the truck this year as well as its best retail volume in 10 years.

LaNeve blames a 10.2% decline in Escape CUV sales and 17.9% drop in Explorer SUV deliveries on the attractive Chevy deals.

However, he notes Ford also adjusted lease pricing upward on those two models, resulting in much lower lease penetration and demonstrating the price sensitivity of U.S. new-vehicle shoppers.

Another reason for low Escape sales: The selldown of the ’16 Escape is commencing, but the ’17 model is not yet flooding the market.

Ford van sales were particularly strong, with the Transit up a whopping 41.2%.

Total Ford-brand sales declined 3.1% in July vs. like-2015, as cars remained weak across the industry. Ford reports its cars were down 9.9%.

Ford’s largest and smallest cars saw the most extreme declines, with the Taurus off 36.0% and the Fiesta sliding 25.5%.

Ford’s best-selling car, the Fusion, slipped 4.4%, while the C-segment Focus declined 17.9%.

The only Ford car in the black was the Mustang, rising 12.8% vs. July 2015 to 9,565.

It wasn’t all bad for CUVs and SUVs, as gains were recorded by the Edge and Expedition.

The Expedition more than doubled sales, rising 118.4% to 5,963 units.

Lincoln-brand deliveries fell 4.6% to 9,098. Ford reports Lincoln had a 3.0% increase on the car side, while its CUV and SUV sales dropped 8.4%.

The car gain can be credited to the MKZ, which gained 12.3% from July 2015 to 2,968. Lincoln’s other sedan, the MKS, plunged 42.5% last month.

Another Lincoln model suffering a big decline was the relatively low-volume MKT, down 56.2%. However a 12.9% loss by Lincoln’s No.2-selling CUV, the small MKC, had a bigger impact on the utility sector’s overall performance.

The MKX was the only Lincoln CUV in the black in July, up 5.4% to 2,656.

Through July, total Ford light-vehicle sales were up 3.0% to 1.53 million, WardsAuto data shows, with the Ford brand rising 2.8% and Lincoln up 10.1%.

Although U.S. economic indicators generally are positive, LaNeve says Ford has tempered its retail sales expectations.

“Last year, the industry really strengthened in Q2 and Q3 and we were anticipating a similar development. We just don’t see the strengthening or the acceleration we saw last year,” LaNeve says, speculating the strength of retail sales from 2010-2015 resulted from a “historically low recession.”

Ford fleet sales rose 6% in July from year-ago to 55,321, with daily-rental deliveries down 7% but government and commercial fleet sales rising 16% and 12%, respectively.

Calendar-year-to-date, fleet accounted for 34% of Ford’s total U.S. light- and medium-duty sales of 1.57 million units, up from 30% in January-July 2015.

On incentives, Ford’s rose slightly July 2016 vs. July 2015, but were down from June 2016, LaNeve says.

He says more aggressive discounting by GM and others is “an indication in a plateauing market the major players are going to protect share.”

He vows Ford will be “disciplined and competitive in our go-to-market plans.”

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