Ford Motor Company's Management Hosts Sales Conference Call (Transcript)

Seeking Alpha

Executives

Erich Merkle - US Sales Analyst, Ford Company

Ken Czubay - VP, US Marketing, Sales & Service

Jenny Lin - Senior Economist, Americas, Ford Company

Analyst

John Murphy - Bank of America/Merrill Lynch

Chris Ceraso - Credit Suisse

Patrick K. Archambault - Goldman Sachs & Co.

Colin Langan - UBS

Dee-Ann Durbin - Associated Press

Ben Klayman - Reuters

Todd Lassa - Automobile Magazine

Rebecca Lindland - Rebel Three Media

Greg Keenan - The Globe and Mail

Operator

Good day, ladies and gentlemen, and welcome to the Ford monthly sales conference call. My name is Britney and I will be your operator for today. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, US Sales Analyst Erich Merkle. Please proceed.

Erich Merkle

Thank you, Britney and good morning, ladies and gentlemen. Welcome to Ford’s March 2012 sales call. For the month of March, we estimate that total vehicle sales finished the month at about 1.49 million vehicles, including medium and heavy trucks. This translates into what we believe will be mid to high 15 million total SAAR for the month. Again this would include medium and heavy trucks.

Based on our preliminary estimates, March total vehicle sales are expected to be up approximately 4% versus a year ago levels. This places the first quarter total industry sales results including medium and heavy trucks at about 15.7 million vehicle pace at a 15.7 million vehicle pace which is about 6% better than a year ago levels. We believe the industry retail sales mix was approximately 79% of the overall industry of March. With the month’s retail SAAR operating in the low to mid 12 million vehicle range.

At the segment levels we took a look at the share of small cars which increased sequentially to an estimated 22.8% of the industry, which compares to just less than 22% in February. Much of the sequential move is due to seasonal patterns as we move into time spring car buying season. Compared to last year, the small cars segment is about 1 percentage point lower than March of last year when the segment was slightly more than 24% of the industry. Driven in large part by Ford’s Escape the small utility segment continues to grow. We estimate that the segment accounted for 14.4% of the industry last month, which places it, about four-tenths of a point higher than last year. This segment along with the mid-sized sedan segment will be two to watch this year as the product cycle cadence has been very strong and momentum continues to strengthen.

Full size pickups continue to outpace the industry. This represents a departure from what we have been seeing since the recession. In the first two months of this year, the full size pickup truck segment is up approximately 21%. We anticipate that the segment will outpace the overall industry again this month with a year-over-year increase in the mid to high teens relative to a 4% increase in the overall industry.

We estimate that full size pickup segment represents about 11.6% industry sales in March. While this is lower than the 12.6% in February, it is more than a full point higher than March last year at about 10.5% of the industry. Now to give you a little more flavor, and a little more color as to what's going on at the product level; I am going to turn things over to Ken Czubay. Ken?

Ken Czubay

Good morning everyone and thank you Erich. For March, Ford Motor Company reported a 6% year-over-year increase with 236,160 vehicles sold. Ford Motor Company sold 160,434 retail, giving us a 5% increase and providing us our best March total sales performance in six years and our best monthly sales performance overall since May of 2007.

Our newest product offerings took center stage this month. Fusion had its best sales month ever dating back to its introduction in 2005. Escape also posted its best ever sales month, going back to its introduction in 2000. Sales of our all new Fusion broke through the 30,000 vehicle mark for the first time ever, surpassing its March 2012 all time record sales month by 6%.

Additionally, the first quarter of this year represented record quarterly sales result for Fusion and our first time ever surpassing the 80,000 vehicle threshold in the quarter. In fact, during the first quarter of this year, we surpassed our record first quarter 2011 Fusion sales levels by 24%. Fusion again saw strongest sales increases in Los Angeles and San Francisco, with retail sales in California doubling versus last year.

The Miami region followed up on February’s doubling of sales, with a 59% increase in March. Fusion retail sales in the west, southeast and east lead the way. March retail sales were up 69% in the west, followed by a 33% increase in the southeast, and a 30% increase in the east. Almost 65% of our Fusion retail sales are coming from outside our Great Lakes region, with more growth anticipated in California and the Southeast, a region of growing strength for Ford.

Our fastest turning area in the country for Fusion continues to be California, with Fusion spending just 14 days on dealer lots in Southern California and 16 in San Francisco. Our fastest turning Fusions in the Southern California are Hybrids, spending just nine days on lots.

In Southern Florida Fusions are spending 17 days on dealer lots with the high series titanium spending only 13 days on dealer lots in South Florida. Record customer sales and particularly strong demand in California and Florida will begin to play some constraints on supply starting in the coming months, which is why we are adding Fusion capacity at our flat rock Michigan facility this fall.

Now a little more color on Escape; our all new small utility also added best sales month ever. With 28,934 vehicles sold, Escape were up [20 per 8%] versus last year. Escape has done the best selling utility vehicle in America for the first two months of this year and we expect this to be the case again in March. This would not only make it Escape’s best ever quarterly sales result, but also the best selling utility in America for the first three months of this year, where sales up 25% versus a year ago.

Strength in the Ford utility segment was not the Escape’s alone; Explorer had its best sales month since the current model was introduced in 2010 and it achieved its best March retail sales results since 2005. As Americas best selling mid-size utility last year, Explorer sales of 17,509 in March represented a 33% increase versus year ago levels.

Already America’s best selling mid-size utility; Explorer’s sales keep growing as we continue to meet growing demand out of our Chicago plants. As Erich mentioned earlier, we continue to see full size pick-ups running at a faster rate than the overall industry. We fully expect that this will be the case again in March. Sales of our Ford F-Series were up 16% in February with 67,513 vehicles sold.

For the quarter F-Series totaled 168,843; their best first quarter sales performance since 2007. This now represents our 20th consecutive month of year-over-year sales increases in the full-size pick up segment. We also want to give you an update on Lincoln and MKZ today. As promised in January, we are normalizing our stock position of MKZs. Beginning in April with normal stock levels; we will have a good read on MKZ sales as we move through this month and into the second quarter of this year.

During March, MKZ sales increased as inventory positions improved around the country. The daily sales rate of MKZs doubled in the last third of the month compared to the middle third of the month finishing the month out at 2,360 MKZs sold.

While still lower than a year ago levels, sales markedly improved from February. MKZs are turning fast, spending just 14 days on dealer lots with the hybrid version down to just eight days on dealer lots. With the early sales we are finding about 45% of MKZ buyers are new to the Lincoln brand and that's better than our expected Conquest rate.

54% of MKZ buyers are under the age of 60 and 28% of them are coming from buyers under age 50. We are looking forward to updating everyone on April sales as we begin the month with a much improved stock position. So that's a look at Ford and Lincoln, now I would like to turn things over to Jenny for an update on the economic front. Jenny?

Jenny Lin

Thank you, Ken. Good morning everybody. Since our last monthly sales call in early March, economic indicators are in general positive. The manufacturing sector is expanding with purchasing managers reports in recent months suggesting expansion to continue.

Core capital goods orders returned to levels last seen in mid-2012. Housing sector recovery is in full swing. Employment growth is stable at 1.5% and consumer spending growth about 2% in the first two months of 2013. On net our outlook for the US economy calls for a growth in the range of 2% to 2.5% range this year.

Here are some of the details. After posting in January, manufacturing production grew 0.8% in February. Although March’s manufacturing purchasing managers’ indices released yesterday show some mixed results. They both indicated the expansion to continue with employment growing at faster rates.

In another sign in business spending maybe picking up, core capital goods order continue to recovery which started late last year now at levels last seen in May of 2012. This development is very constructive for the economy because business spending on equipment and software represents about 7.5% of GDP.

Housing sector data continue to suggest a good housing sector recovery underway. First off, (inaudible) share of home prices moved up, rising 8% in January as compared to a year ago. Momentum has been building since mid-2012. In the fourth quarter of last year, home pricing was up by 5.5% compared to same quarter a year ago.

New home sales grew by 12.3% in February averaging 19.7% during the first two months of this year. And this growth could be supply constraint as monthly supply is now at only 4.4 months, about two months higher than the historic average of 6.2 months of supply.

For existing home sales, February was another good month with sales up 10.2% compared with a year ago. The medium sales pricing for all existing homes regardless of size and shape advanced 11.6% in February compared to the prior year.

Housing starts and permits are also trending higher with increases of 27.7% for starts and 33.8% for permit, again on a year-over-year basis in February. The final March University of Michigan consumer sentiment reading managed to recover to 78.6 after the 6 points plunge in early March. Despite the volatile headline sentiment reading recently, their underlying job and income gains are improving.

Most recent four week moving average initial jobless claims are at 343,000. We will receive the March jobs report at the end of this week. Consumer spending grew at a rate of 2% from a year ago in February. Spending on durable goods was up over 7%. Also supportive for the economy had been both low interest rates and rising equity wealth. Both of these positive developments supports for economic growth going forward.

On net, the US economy is projected to grow between 2% and 2.5% this year. To recap, as Erich mentioned earlier, March total industry sales were estimated in the mid-to-high 15 million unit range, this is on basis including medium and heavy duty trucks. Our full year call for the industry sales is in the 15 million to 16 million unit range.

With that summary, let me turn it back to Erich. Erich?

Erich Merkle

Okay. Thank you Jenny, taking care of some housekeeping items, as we get started before we take your questions. When we look at gross stock, our inventory position for the month of March, cars, we had gross stock of cars at 173,000 vehicles, trucks were at 245,000 vehicles, utilities were at 145,000 that gave us a total gross stock inventory of 563,000 vehicles translating into 62-day supply.

This compares to February last, the previous month of 176,000 cars, 246,000 trucks, 153,000 utilities giving us a total gross stock for the month of February at 575,000 vehicles which translated into 71-day supply, comparing it to March of last year, March of 2012, we had 145,000 cars 190,000 trucks, 145,000 utilities giving us a total of 480,000 vehicles at gross stock, which translated into a day supply of 58.

When we take a look at our fleets, fleet in the month of March comprised of 32% of our total sales, 14% was commercial, 4% was government and 14% was daily rental. This compares to March of last year when fleet was 32% of our total sales so unchanged to a percentage. Commercial was 14% which is unchanged to the percentage, government was 3% and daily rental was 15%.

When we look at calendar year to-date, our fleet as a percentage of our total sales March calendar year to-date was 31%, for commercial it was 14% of total sales, government was 4% of total sales and daily rental was 13% of our total sales.

If we go back and look at March 2012 year-to-date, 31% of our total sales were comprised of fleets, 15% of that was commercial, 3% government and 13% daily rental and as you can see very consistent year-over-year.

So with that, let's open it up Britney for the folks and the analyst community, we will start taking some of questions, thank you.

Question-and-Answer Session

Operator

(Operator Instructions) And your first question comes from the line of John Murphy with Bank of America Merrill Lynch. Please proceed.

John Murphy - Bank of America/Merrill Lynch

Just a first question on Fusion, I'm just curious as you add Flat Rock where your capacity will be if right now you are running capacity constraints on the Fusion, and I'm just trying to understand typically vehicles peak out on their sales curve around 18 to 24 months out and you are running hot at the beginning and I'm just really trying to gauge if this vehicles stay hot where you can actually produce too.

Ken Czubay

Well, our plan John is always to manage our business and produce to the market. This is one of the most dynamic segments. This is a small utility let by Escape. So our dealers and the consumers are very fortunate to have both the Fusion and the Escape being new products and running at a good selling pace. So as you pointed out, our plan is to activate the Flat Rock, Michigan assembly plant in the fall and we will produce additional Fusions to meet consumer demand. So we are very excited about that in a growing segment to have one of the hottest products in that segment.

Erich Merkle

And keep in mind too John this wouldn't be an anomaly. If you look at Explore for instance, we are producing some of the best sales results ever for the new product. So right now.

John Murphy - Bank of America/Merrill Lynch

So just curious I mean what you are running at right now is the 320 pace maybe a little bit more. I mean if this gets into the old school trend of the tourist and you are running north of 400 [Dows] on sales I mean can you produce to a 400,000 plus market for this year.

Ken Czubay

We are very confident we can produce to an expanding segment and an expanding market with Fusion.

John Murphy - Bank of America/Merrill Lynch

And then just maybe a last question on pricing in general in the market and also specifically on pickup trucks and how you expect that to progress during the course of the year as GM goes through their change over and goes through a sell down and then a wind up later in the year.

Erich Merkle

Well, John what I can give you is we can look at our incentive spend as it is today, but for the month of March Ford’s overall incentive spend was down about $100 compared to February, and compared to March of 2012 Ford’s incentive spend was up just over a $100 but a little less than the overall industry. And on the pickup truck side, right now Ford’s pickup truck incentive spend was down about $50 in March compared to February and we are up about $300 compared to February of 2012 to maintain competitiveness within the segment. But we will have to see what happens with GM, I can't speak to what will happen with the incentive environment as we go down the road three to four months from now.

Ken Czubay

So John my color on that is, like Erich’s, of course we can't predict what our competitors will do. But we are all outside analysts are saying that truck market will continue to grow. Jenny has given continuing data on the housing market and on the general business recovery. So we are pleased with the size, numerical size of the full size pickup truck business and we are showing that it’s improving. The segment share is improving even beyond seasonality.

So we are going to, we are very pleased to be in America’s best selling pickup truck, we watch pricing carefully which is what your question is and at 67,000 plus F Series sold this month, you are on the call every month our benchmark used to be 50,000 and now we’ve raised the bar to 60,000 at 67,000 plus America is really buying pickup trucks and they are buying Ford pickup trucks. So we will watch the pricing, but we are going to run our business.

Operator

Your next question comes from the line of Chris Ceraso with Credit Suisse. Please proceed, sir.

Chris Ceraso - Credit Suisse

Question about the MKZ and then a follow-up on the trucks. I think as of the last month you said that you had built units and were holding them for quality check and inventory are getting better. Do you have a rough count of how many units you produced in the first three months of the year, but were held for checks and didn’t make their way yet to dealers.

Ken Czubay

Well, that’s at a very small number now. As a matter of fact, we're no longer shipping them to Flat Rock, Michigan for any additional quality checks. So vehicles are steaming to dealers right now. We’ve delivered about 4,600 MKZ to dealers already and the pace has picked up dramatically during the month. So we expect to have all of the quality checked vehicles completed within the next 10-15 days and the normal flow to dealers. So we're going to be on plan at the end of the month with MKZ and the overall inventories.

Chris Ceraso - Credit Suisse

Okay, and then on the trucks, I was wondering if you could just give us some updates on the kind of mix that you are seeing, and maybe three things in particular, the percent that’s Super Duty, the percent that Crew Cab and the percent that’s EcoBoost?

Erich Merkle

No, Chris, we don’t really give out that level of information. We do though with EcoBoost. EcoBoost is running, it's about 40% at retail for F-150.

Chris Ceraso - Credit Suisse

40?

Erich Merkle

Yeah.

Chris Ceraso - Credit Suisse

Okay and then just last item, where do you think that you’ve run out of capacity to produce trucks? We spoke may be a week or so ago about may be some supply constraints in the full size truck market, what's your capacity to build F-Series trucks?

Ken Czubay

We have no capacity constraints for the foreseeable future. I mean trees don't grow to the sky, but we can definitely meet any projected market demand for F-Series for the foreseeable future. I mean even as hot as it's running right now we love it.

Operator

And your next question comes from the line of Patrick Archambault with Goldman Sachs. Please proceed sir.

Patrick K. Archambault - Goldman Sachs & Co.

Yeah, two quick ones from my end; first just I guess following up on John Murphy’s question the Fusion inventory was I think 40 days at the end of last month. I don't know probably could be down from their this month, I mean, does that mean constraints literally persist through this summer selling season, because obviously Flat Rocks really coming on in the fall, so is that something that at least for the balance of most of selling period this year’s is kind of going to under perform just because of constraints which I guess are good problem in one sense? And then my other question is just on the drivers of trucks strength, which seem to be in your results here, is that affordability, is it just the lower gas prices as a commercial end markets. A little color on that would be helpful as well.

Erich Merkle

Sure, I will take the first one Patrick. Yeah, so if we look at Fusion, we are going to do everything we can to meet demand through the spring and summer months, but until we get Flat Rock on line, it will be tight for us there is no question. Flat Rock will help to alleviate those constraints and we think help Fusion take the next step higher in terms of its sales.

Jenny Lin

Yes, Patrick this is Jenny to answer your question regarding the drivers behind the strong truck industry is, there are several of them. First up is that the current age of the vehicle in general in the light truck is over 11 years. That is the based on the data we had from poll of 2012. The truck age and also the overall age of vehicles are very old at this point.

Secondly that we are in the middle of a housing recovery; I think that’s a very big driver here in this case. The housing sector boom will likely to continue because we have not finished t yet and therefore that will continue to support very strong truck sale, and the overall interest rate environment is also very supportive in terms of the truck sales.

Ken Czubay

So Patrick, a little bit more color commentary on the Fusion. While the days supply will drift lower than generally accepted days supply, it will not be a critically low days supply and we have been excellent flow of vehicles on the Fusion. So we believe that we’ll be able to sustain a high sales pace, it’s an incredibly well received vehicle we will sustain that, but it will be below generally accepted industry levels of average.

Erich Merkle

Britney we are going to take one more call from the analyst community then we will switch it over to the media.

Operator

Okay, great, your next question comes from the line of Colin Langan with UBS. Please proceed.

Colin Langan - UBS

I was just wondering two things I think you mentioned earlier that your pickup incentives were up 300 year-over-year to be competitive with the segment. Any color on how the segment’s overall incentives were?

And the other question would be any thoughts on the announcement yesterday from GM with the pickups for having better fuel economy than the EcoBoost, any thoughts on how you might react to that or how concerned you are by that announcement?

Erich Merkle

Sure. I'm going to take a look. Let me just pull up the data here for you Colin. If we look at overall pickups and we take a look at pickups year-over-year, we are looking at vehicle (inaudible) report, the overall incentive spend for pickups, when we take a look it was pretty much flat with year-over-year with some of the competitors starting to really pick up the pace. I mean there's always a few outliers, when you look at the segment. You have a few outliers in there which certainly created a situation where we had to make response to their actions.

Ken Czubay

And let me just (inaudible) a little bit on what our competitor announced yesterday. And at the end of the day with decades of truck leadership and there always being ins and outs, some changes in engine performance and fuel economy, etcetera, its tricky to just put your thumb on one data point. So we've demonstrated that decade after decade the F series is a leader.

Frankly, we look at EcoBoost, its best suited overall for work and the consumers are saying it’s delivering not only a great combination of power and capacity but also fuel economy. And the interesting difference between the two approaches or the approaches among the industry is with EcoBoost, it really delivers the best balance we believe between power which should be considered horsepower and torque which is very important in the truck market and fuel economy.

So we are committed to providing the best pickup truck in the industry for the overall work and play consumer and we will continue to do that. They will come out with their power trains but we are committed to coming out with the best overall power train commitment in the industry.

Operator

Okay and your next question comes from the line of Dee-Ann Durbin with Associated Press. Please proceed Ma’am.

Dee-Ann Durbin - Associated Press

I see that police vehicle sales were up pretty significantly for utility and in the sedan, I am wondering if we are going to keep seeing totals like that, if this was just sort of a one-off month, if you can explain what's going on there and also I am wondering if gas prices had any impact at all on what consumers were buying last month?

Ken Czubay

Let me just talk about Police Interceptors, number one, the sedan and the utility Police Interceptors are really being well received in the marketplace as you note by the increases in both of their sales. What we are finding is that numerically and share wise we are improving.

I think it’s a reflection that the governmental agencies are both the state and county and local municipalities, actually as they work through their budget issues for the last year and to kind of take a time out and you know, replacing these sorts of vehicles.

We think that they are getting their budgets back together and they are buying again Police Interceptor vehicles and we're also showing that our shares which has been traditionally very, very high continues to improve. So we're optimistic about that business and it's growing as you note and I think as the municipalities find that they need replacement vehicles there in the market to buy Ford Police Interceptors.

Jenny Lin

Dee-Ann, this is Jenny. In terms of gas price, actually if you compare first quarter of this year versus first quarter of last year, the average is about the same as $3.60 per gallon on a gasoline. So there is really no particular difference that we see here from a gas price.

Now if you compare March-to-March, that actually last March in 2012, the March average price of gasoline was $3.85 and this month March of this year, we have about $3.71. So it's about $0.10 down from last month. So I don't think that we can isolate particularly attribute to other segment shift to gas price particularly but it’s just the overall economy has done better.

Ken Czubay

And what I would add to that is although we've seen in the last four or five years, we've seen dramatic spikes in gas prices. We've seen some changes in consumer behaviors. What all of our study show that fuel economy is still a top driver if not the top driver of consumer choices and this is why we continue to be committed to providing super fuel efficiency throughout our line up and every one of our power trains in. I mean its evidence in the Fusion and Escape how well they performed last month. Consumers are still very, very interested in fuel economy; they can look beyond today’s prices.

Erich Merkle

Okay. Thank you, Dee-Ann. Britney next caller please.

Operator

Okay. And your next question comes from the line of Ben Klayman with Reuters. Please proceed.

Ben Klayman - Reuters

Yeah. I just have two questions. I want to follow-up on Colin’s question just to see if I understand what you are saying about the pickup in relation to GMs new offerings but I was just wondering if you guys foresee any impact whether it's on the sales pace or your incentives having to go up or something like that from the new GM trucks?

And then the second question it was more for Jenny, as I recall you talked about the consumers having nerves of steel last call. And I just want to see sort of how you stood on that this time around?

Ken Czubay

So Ben, this is Ken. Let me answer to your first question. I actually was very, very pleased with 67,000 plus F-series sales last month and that’s in a market where some of our competitors have launched competitive trucks, and some of our competitors are in a [sell] down mode with aggressive incentives.

So the point that I would make is now withstanding all the continuous ins and outs of the competitive marketplace before truck after decades of truck leadership continues to bring the total value proposition to the marketplace. And my point of view is irrespective of what competitive our markers will come out with putting their finger on one data point or other, consumers will continue to see the overall value with Ford trucks, resale value, low cost of ownership, the right balance of power and fuel efficiency.

So the marketplace will grade us overall and so far and in the future we believe they will show that the F-Series will be the best selling pickup truck in America.

Ben Klayman - Reuters

Thank you.

Jenny Lin

I thank you, your question on the consumer sentiment, yet, its is the scary first half in March over six point plunge in the consumer sentiment, but I think despite the overall volatile headline sentiments recently, I think that at the end of the day, it is the underlying job and income growth that is will count the most.

And to be of additional proof point, that (inaudible) consumer sentiment (inaudible) for all those headline volatility, their buying appetites (inaudible) consumer durables so actually very favorable.

Last month in March, the buying appetites for consumer for houses is at 79%, it doesn't, it didn't bulge at all and the good time to buy a vehicle indicators continue to stay at 52% which is already exceeded the average of the indicators, so that is the proof point of saying that yes, despite some disappointments in terms of the government policy that in the consumer still, the outlook has improved in terms of employment growth and income gains.

Ben Klayman - Reuters

So would you still classify it as nerves of steel or…

Jenny Lin

So far so good.

Ben Klayman - Reuters

Okay.

Erich Merkle

And Ben around the incentive spend on full size pickups I wanted to make a comment in terms of when you look at the range right now of spending in the full size pickup truck segment, the high end of the range is about $5,200 to $5,300 per truck. The low end of the range is just under $4,000 and we fall in the lower 50% within that range. So, okay.

Operator

And your next question comes from the line of Todd Lassa with Automobile Magazine. Please proceed.

Todd Lassa - Automobile Magazine

Erich, I think you said that the EcoBoost take rate on the F-Series is something like 40% of retail, is that right?

Erich Merkle

That's correct for F-150.

Todd Lassa - Automobile Magazine

Do you do any, do you have any take on the EcoBoost at all on the fleet level or is that because the cost is pretty much negligible number?

Erich Merkle

It’s pretty much consistent I mean with the overall total of the fleet number. Fleet might be a little bit less, retail little bit higher.

Todd Lassa - Automobile Magazine

Okay, so fleet a little bit less than 40% would be the EcoBoost?

Erich Merkle

Yes, correct on the fleet portion of it.

Operator

And your next question comes from the line of Rebecca Lindland with Rebel Three Media. Please proceed Ma’am.

Rebecca Lindland - Rebel Three Media

Erich, I know you and I had spoken about a month ago about some of the Lincoln demographics and they were rattled off rather quickly, so can you just review those for me please?

Erich Merkle

Sure.

Rebecca Lindland - Rebel Three Media

Thank you.

Erich Merkle

Let me just pull them up for you here a second Rebecca. I want to make sure I have them accurate and correct for you.

Rebecca Lindland - Rebel Three Media

Likewise.

Erich Merkle

Yeah, I am sure. So we have 54% of MKZ buyers who are under the age of 60 and 28% of them are coming from buyers under the age of 50. Okay?

Rebecca Lindland - Rebel Three Media

Okay, and then on the Conquest, was it 60% Conquest?

Erich Merkle

It was 45% Conquest.

Rebecca Lindland - Rebel Three Media

Okay, 45% Conquest. Where are most of them coming from?

Erich Merkle

We haven't gathered that information. It’s still pretty early but they are coming from a variety of different automakers. We are going to take one more caller from the media community if we could please. Thank you, Brittany.

Operator

Okay and your next question comes from the line of Greg Keenan with The Globe and Mail. Please proceed, sir.

Greg Keenan - The Globe and Mail

I was just looking for a little more detail on the pickup situation in regards to the housing market, is there a particular geographic area where the housing market is picking up more strongly than else where that might be driving pickup sales?

Jenny Lin

In terms of housing Greg, this is Jenny, in terms of housing sector we see the overall improvement from time-to-time in these regions and different regions rotate, but I think west is consistent to the outperform in terms of outperform at national level and east is little low because they have been hit by several disasters and therefore so but from time-to-time the regions going in and out. But we are seeing that the west is consistently very strong. And not only housing that was propelling the sales in pickup trucks but also the energy sector as well.

Erich Merkle

Thank you, Greg. Britney, we would like to thank you for helping us host the call today and to all of our listeners, we look forward to talking to you again next month for the April sales call. Thank you very much. Have a great day everyone.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect and have a great day.

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