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Ford: Quarterly U.S. Sales Growth All From Trucks and Vans

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Ford Motor Co
(F)

During the week of July 3, automakers have reported June or second-quarter sales. Wards has June sales up 19.9% year over year and the month’s seasonally adjusted annualized selling rate at 15.68 million, up from 13.05 million in June 2022. J.D. Power said on June 23 that the month’s incentives were tracking to rise 95.9% from June 2022, albeit off a low base of $918 per vehicle. With J.D. Power putting incentives as a percentage of average transaction price at only 3.7%, we don’t see sales reliant on discounting. Also, the most expensive trim packages continue to be in demand. We expect third-quarter demand to remain healthy amid continued pandemic and chip shortage recovery.

Ford F reported second-quarter sales on July 6 that rose 9.9% versus 17.5% for the industry. We attribute the underperformance to declines from Mustang as well as from certain crossovers and SUVs such as Explorer, Bronco Sport, Bronco, Mustang Mach-E, and the discontinued EcoSport. The new Escape did well, rising 28.7%. The full-size Expedition and Navigator SUVs rose 52.4% and 20.1%, respectively, while the F-150 Lightning electric vehicle more than doubled deliveries to 4,466. We expect continued growth in Ford’s all-electric offerings from Lightning as well as Mach-E now that the latter’s Mexican plant has been retooled to increase production. The retooling is already helping; Mach-E’s June sales rose 110%, far outpacing its 21.1% quarterly decline. Ford’s press release heavily emphasized its pickup truck outperformance versus GM’s full-size and midsize trucks, but we calculate the 3,605-unit beat was due to the Maverick compact pickup, a segment GM does not compete in. F-Series volume rose 34%, with the Lightning 2.1% of F-Series volume. Half of Lightning buyers are new to the Ford brand, and Lightning volume rose 4.1% from the first quarter. Lincoln sales fell 15.2% but the Corsair and Nautilus crossovers’ June sales far outpaced their overall quarterly growth once inventory improved.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

David Whiston

Strategist
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David Whiston, CFA, CPA, CFE, is a strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007.

Before Morningstar, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner. In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011.

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