Ford Motor Company (NYSE: F) said that its U.S. sales increased 8.7% in September from a year ago, well ahead of a small increase for the overall U.S. market. That good gain was driven by the favorable timing of some big commercial-fleet deliveries, a big month for Ford's F-Series pickup trucks -- and a solid result at retail.
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Ford's sales in September: The raw numbers
|Metric||September 2017||Change vs. September 2016|
|Total U.S. sales||222,248||8.7%|
What worked for Ford last month: Trucks, SUVs -- and a small-car surprise
As ever, Ford's sales story starts with its vaunted F-Series pickup trucks, and last month was a very good one on that front. Ford sold 82,302 F-Series pickups in September, a 21.4% increase from its total in September of last year (which looked like a strong result at the time).
That's a huge total that was helped both by post-hurricane effects (Houston is a very strong market for Ford pickups) and by continued high commercial-fleet demand for Ford's new Super Duty trucks. F-Series sales significantly outpaced the (very good, in context) 73,342 total sales of General Motors' (NYSE: GM) full-size pickups, the Chevrolet Silverado and GMC Sierra. The average transaction price on Ford's F-Series was up about $2,300 from a year ago, the company said, suggesting that Ford wasn't using discounts to goose the numbers.
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On the flip side, a drop in sales to fleet customers hurt overall results for Ford's SUVs, but as a group, they had a very good month at retail. Retail sales of Ford-brand SUVs rose 8.8% last month, to what Ford said was its best result at retail for SUVs since 2003. Retail sales of the Escape, Edge, Explorer, and Expedition were all up year over year, with the Explorer up nearly 15% at retail.
A good sign within the numbers: Overall sales of the compact Escape were up 2% year over year. There have been hints that the Escape, an aging design, was losing some sales ground to GM's all-new Chevrolet Equinox; the sales growth last month was good to see.
Sedan sales continued to be weak at Ford (and across the industry). But the Blue Oval's compact Focus had a good month, up 5.3% overall with an 8.3% sales gain at retail. Ford said that result was helped by strong demand for the high-performance Focus ST and RS models.
Last but not least, Ford's luxury Lincoln brand continued to do fairly well in what has been a softening U.S. luxury-vehicle market. Sedan sales were down, but sales of Lincoln's SUVs were up 10.6%, enough for a roughly flat overall performance (and in a declining market, a market-share gain).
Ford continues to manage inventories well
Including vehicles in transit to dealers at month-end, Ford had a 72-day supply of vehicles in its U.S. inventories as of the end of September. That's a good number, one that suggests Ford has been carefully matching its production to overall demand.
High inventories are worrisome for investors: They suggest that the automaker will have to resort to discounts to clear out excess inventory, hurting profit margins. That hasn't been a problem for Ford: The Blue Oval's overall inventories have been in good shape all year, and continued to look just right in September.
The upshot: A lot of good news for investors here
The U.S. market is probably past its cyclical peak. Sales growth can be scarce in such conditions, and the temptation to resort to profit-squeezing discounts to boost sales can be strong.
Ford has done a good job of resisting that temptation and letting sales fall where they will. TrueCar estimated that Ford's per-vehicle spending on incentives was $4,289 in September, down slightly from August and down almost 4% from a year ago, while its average transaction prices are up slightly.
Ford's pickups, particularly its all-new Super Duty models, are helping those averages a lot. It all adds up to what should be a good third-quarter profit for Ford in North America. We'll find out when Ford reports its third-quarter earnings on Oct. 26.
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