The Long View On Ford Sales

Ford sales off 48% say the news stories today. But that’s not the whole story.

Last month Ford sold 99,400 vehicles.

In February 2008 Ford sold 192,799 vehicles.

In February 2007 Ford sold 211,150 vehicles.

In February 2006 Ford sold 244,021 vehicles.

So a more accurate headline might be, “Ford sales down 60% in three years.”

From NewMexiKen.

Ford is the only one of the Big Three not in dire immediate need of a federal bailout. And, one can attribute the extent of the February 2009 year on year sales to the financial crisis. But, it was probably looking at mid- to high- single digit sales declines even without the latest economic turmoil.

No amount of balance sheet tinkering can postpone product problems that lead to sales problems indefinitely. And, it doesn't take as many workers to make 99 thousand cars a month as it does to make 244 thousand cars a month, so the short term decline in labor demand is writing on the wall.

There were enough cars sold in the United States in February 2009 for Ford to have sold 244,000 cars. The trouble is, lots of those potential customers bought cars from other companies instead. While the financial crisis is the short term story, the long term story is declining Big Three market share.



UPDATE:

Major automakers' U.S. sales continued their deep slump in February, putting the industry on track for its worst sales month in more than 27 years . . . .

Ford Motor Co.'s U.S. sales fell 48 percent from a year earlier, while Toyota Motor Corp. posted a 40 percent drop . . . February sales could be worse than January's total of 656,976 light vehicles. That was the lowest monthly total since the industry sold 656,310 vehicles in December 1981, according to Autodata Corp. and Ward's AutoInfoBank. . . .

Ford, which hasn't taken any federal assistance, is preparing for sales to remain depressed. The Dearborn company said it plans to produce 425,000 vehicles in the second quarter, down 38 percent from the 685,000 it made in last year's April-June period. . . .

Industrywide, the average incentive per vehicle last month rose 8 percent from January to $2,914 per vehicle sold, Edmunds said. Incentives climbed to an average of 20 percent of the sticker price of a new car, and they topped more than $10,000 on some vehicles. . . .

Edmunds said its data show that 27 percent of people who intended to buy a new car switched to used at the dealership in February . . . .

[Ford] Sales of the F-Series truck, traditionally the best-selling vehicle in the U.S., fell 55 percent, while sales of the Focus small car also dropped, by 39 percent.

Toyota Motor Corp.'s total of 109,583 vehicles came in slightly higher but was down from 182,169 in the same month a year ago.

I haven't found data yet on other major automaker sales in February of 2009. I'd also like to know what the profit or loss per vehicle is at Ford, but don't have time to calcualte the number at the moment.

In 1985, Ford's market share was just under 20%, while GM and Chrysler combined accounted for another 60% of U.S. automobile sales (Chrysler was the smallest of the Big Three even then, IIRC). If Ford had held onto that market share, it would have sold 35,000 more vehicles last month than it actually did. The remaining 59,000 car drop in Ford sales can fairly be attributed to the financial crisis.