Focus Sales Hampered by Supply Constraints

Ford Focus sales continued their downward spiral in August, as one of the C-car’s top competitors, the Chevrolet Cruze, gained momentum.

In August, Focus sales were off 12.4% from year-ago to 14,093, based on 26 selling days vs. 25 in like-2010, according to WardsAuto data. Cruze deliveries for the month totaled 21,807.

The Focus started out slowly this year, with just 9,014 deliveries in January. Momentum began building in the spring, with sales reaching a high of 22,303 units in May.

But volume began to decline in late summer, and Focus sales failed to top 14,889 last month.

George Pipas, the auto maker’s top U.S. sales analyst, says supply, not demand, remains the issue.

“In the month of July, we had 5,500 Focuses on the ground,” Pipas tells WardsAuto. “That’s a very low inventory position that was exacerbated by our normal (production) shutdown the first two weeks of July.

“By comparison, a year-ago at end of July, we had 27,000 Focuses on the ground,” he says.

Launch of the redesigned model at a new plant – a converted truck operation in Wayne, MI – also has contributed to the supply problems.

Sales of ’12 Focus down 12.4% in August to 14,093.

“In the launch of a new vehicle, there’s always reasons why (there’s a slow ramp-up),” he says, listing parts shortages and process changes among factors.

“It’s all of your suppliers and your materials and a new assembly plant all getting on the same page during launch,” Pipas adds. “It’s that way for everybody.”

In addition, rising gasoline prices sent demand “through the roof,” he says.

Focus inventory at the end of August was 7,500 units, a number expected to increase as the year progresses.

“By the fourth-quarter, we think we’ll get (Focus) inventories up to 25,000-30,000, but some of that depends upon demand,” Pipas says, noting August marked the highest monthly production of the car so far this year.

The Focus continues to play an important role in Ford’s lineup, says Ken Czubay, vice president-U.S. marketing, sales and service.

“One in six Focus sales are to Millennials (18 to 34 years of age), and that’s important,” he says in a conference call with analysts and journalists.

“The average age of Focus buyers is eight years younger than the prior model, and the ’12 Focus customer is more likely to come from California and trade in an import brand than the previous model,” he adds.

Ford avoided supply issues with its other hot-selling small car, the Fiesta, which posted a 69.1% increase in August to 53,258 units.

Pipas says the Fiesta’s situation is opposite from the Focus. Comparisons with year-ago are more favorable because the car was in short supply during its early launch phase in like-2010.

Other hot-selling cars include the aging Ford Crown Victoria, with deliveries jumping 131.5% to 4,879.

A longtime favorite of police and government agencies, Ford recently ceased production of the fullsize sedan, and fleet operators are scrambling to replace their older vehicles.

Coupled with strong Fusion sales, up 21.0% to 17,709, the Crown Victoria helped drive Ford’s overall August light-vehicle sales to 172,607, a 7.0% gain.

On the truck side, sales were mixed. Explorer SUV deliveries soared 284.8% to 9,901, but volume for the bread-and-butter F-150 declined 1.3% to 46,602.

Czubay says the F-150’s results are close to the 50,000-unit range Ford considers a good month for the fullsize pickup.

Demand for the 3.5L direct-injected turbocharged V-6 EcoBoost engine continues to rise among F-150 buyers.

The EcoBoost and 3.7L normally aspirated V-6 also were installed in 57% of all F-150s sold at retail in August, with the EcoBoost accounting for 75% of that total.

“And the incoming (dealer) order rate for V-6s is over 60%,” Pipas says. “So maybe we haven’t seen the high point for (EcoBoost) yet.”

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