Ford Records Lower 2nd-Quarter Sales in US
Ford Motor Co. (NYSE:F) released its second-quarter sales report on July 2.
Quarterly sales declined year over year as the coronavirus pandemic forced customers to stay at home and dealerships to close down. The company's production activities came to a halt in March and lasted until mid-May. The Detroit-based carmaker's results were also weighed down by poor demand for trucks, SUVs and passenger cars.
Overview of the quarter
The automaker sold a total of 433,869 vehicles in the second quarter, down 33.3% from the same period last year.
Sales declined 26.6% for trucks, roughly 30% for SUVs and 60% for passenger cars.
The coronavirus pandemic and the resulting lockdowns also hampered fleet sales (sales to governments and corporations). Daily rental revenue plunged a mammoth 94%. Commercial revenue tumbled 78% on production shutdowns.
Retail sales dropped 14.3% in the reported quarter, which included a sales decline of 0.4% for trucks, 22% for SUVs and approximately 35% for cars. In spite of these headwinds, Ford's retail market share rose to 13.3%.
Mustang sales amounted to 15,717 units, down 27.3% year over year. The Explorer SUV, however, saw sales increase 12.4% to 44,839 units. In fact, Explorer is currently the best-seller in the mid-size SUV segment with sales totalling 101,149 units through June.
In contrast, Expedition sales tumbled 42.4% to 12,555 units.
F-Series and Lincoln sales
F-Series sales decreased 22.7% year over year to 180,825 units. The company cited poor fleet sales as the reason for the decline. On the positive side, the F-Series' retail market share grew by as much as 2.6 percentage points.
Lincoln sales amounted to 21,281 units, which reflected a decline of 18% over the past year. Sales dipped 37.3% to 2,749 units for the Navigator and 38.5% to 5,036 units for the Nautilus. In addition, Continental sales were down 32.1% to 1,012 units and MKZ sales plunged 36.1% to 2,985 units. The company witnessed a sales decline in every Lincoln vehicle.
Ford unveils new F-150 pickup truck
The U.S. automaker digitally unveiled the hybrid as well as traditional versions of the all-new F-150 pickup on Thursday evening, which will arrive at dealerships later this year. Trucks are profitable segment for automakers, especially for Ford since the F-Series has been the top-selling pickup in the U.S. for 43 years.
Jessica Caldwell, an analyst at Edmunds, commented:
"The F-Series launch is a pivotal moment for Ford. This truck has been Ford's cash cow for years and a bright spot during this pandemic, but it has also been in need of a fresh redesign as the truck wars have grown more heated. Ford has been under intense scrutiny from Wall Street for a number of years so the pressure is on Jim Hackett and team to get this right and inspire investor confidence."
The all-electric version of the F-150 pickup is scheduled to arrive in the next two years.
Disclosure: I do not hold any positions in the stocks mentioned.
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This article first appeared on GuruFocus.