Ford continues its sales momentum with an 8.1% gain in August on a daily-rate basis, and looks to the rest of the year to do even better.
With the average age of vehicles on U.S. roads pushing 11 years, consumers are flocking to showrooms to replace their aging cars. Additionally, most vehicle trade-ins have high mileage, making it an easy choice for car buyers to purchase new rather than used vehicles, Ford sales chief Ken Czubay says.
“When consumers come in (to dealerships), they have the choice of high-mileage used vehicles or new vehicles with low interest rates,” he says during a conference call with analysts and journalists. “We believe that will sustain and build momentum of new-vehicle sales.”
Ford sold 216,017 vehicles in August, with 79% of those deliveries representing retail sales, the highest percentage since 2006, with new-car retail volume up 15%, utilities up 16% and trucks up 30%.
Czubay says retail deliveries of Ford small cars grew most rapidly on the West Coast, up 60%, and jumped 28% on the East Coast.
But while retail sales gained strength in August, fleets posted a decline, accounting for 21% of deliveries, down from 26% year-ago.
The auto maker says the soft fleet sales are cyclical, noting volumes generally pick up early in the year before hitting a lull.
“We’re not concerned about it,” says Erich Merkle, Ford’s top U.S. sales analyst, noting the fleet mix was 30% year-to-date. “We had a great fleet month in June, and it was soft in July and August, but a lot of that is due to the timing of purchases.”
Overall Ford small-car deliveries were up 30%, compared with year-ago, to 30,148 units, with the Fiesta surging 55.7% and Focus rising 3.0%.
Other hot sellers, the Fusion and Explorer, posted increases of 9.6% and 8.7%, respectively. The Fusion’s performance marked its best-ever August with 24,653 deliveries.
Czubay says Focus, Fusion and Explorer sales could have been higher if not for inventory constraints. The same was true for the Escape, which posted an 8.6% decline.
Ford recently began production of the Fusion at its Flat Rock, MI, assembly plant to boost inventories, but Czubay declines to detail what steps the auto maker may take to create capacity for the other top-selling vehicles.
“Our manufacturing team is constantly working on maximizing production,” he says. “You see that in Chicago (assembly plant), where we’re working hard to increase (Explorer) production.
Ford’s F-Series pickup enjoyed another strong month, with sales climbing 18.6%, compared with like-2012, to 66,728 units, a tally Czubay says was mostly made up of retail deliveries.
There were some disappointments in August, including the Mustang, down 11.4%, Edge (down 4.1%) and Expedition (down 4.8%).
Of the vehicles in the Lincoln luxury-vehicle lineup, the MKZ once again was the volume leader with 3,652 deliveries, a 5.8% year-over-year increase. The MKS and Navigator were up 7.3% and 9.3%, respectively, but on low volumes of 1,134 and 675 units. Deliveries of the MKT and MKX fell 12.0% and 16.5%, respectively.
Ford ended August with 535,000 light vehicles in inventory, including 132,000 utility vehicles, 232,000 trucks and 171,000 cars, equating to 65 days’ supply overall.
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