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Higher incentives lift Ford cars, trucks

Boosted by the arrival of the MKC luxury compact crossover, Lincoln sales ticked up 14 percent in July. Photo credit: BRADFORD WERNLE

DETROIT -- Strong retail sales and bigger incentives helped lift Ford Motor Co.’s July volume 10 percent from a year ago to its best July performance in eight years. Ford sold 211,467 vehicles last month.

Ford brand sales rose 9 percent to 203,604, while Lincoln sales jumped 14 percent to 7,863.

Ford incentives rose an average of $400 per vehicle over July last year, while transaction prices dropped $360, the company said.

Ford is amid the biggest product offensive in its history, launching 16 new or refreshed vehicles this year.

“We’ve got a record number of products being launched, so a record number of products are nearing end of their life cycle,” said Erich Merkle, Ford sales analyst.

Ford’s biggest sales growth came in crossovers and SUVs, which shot up 17 percent. Cars rose 6 percent and trucks increased 7 percent.

The Fusion mid-sized sedan broke its previous July sales record, increasing 17 percent to 23,942, spurred in part by incentives and lower transaction prices.

To meet growing demand, Ford last summer started producing the Fusion at a second plant, in Flat Rock, Mich. John Felice, vice president of U.S. marketing, sales and service, said Fusion’s market share has grown 1 percentage point to 12.5 percent in the last year. That compares with 6 percent when Ford launched the car in 2006, he said.

Said Merkle: “Fusion [average transaction prices] have come down $1,000 from a year ago. But they’re still at the higher end of the pricing band” for the mid-sized sedan segment. “We have had to get more competitive on Fusion.”

He attributed Fusion’s gains to conquests in areas outside Ford’s traditional Great Lakes stronghold, particularly in the West.

While Ford and other carmakers experience downward price pressure on cars, crossovers and SUVs are booming. Explorer sales jumped 32 percent, while Escape was up 19 percent. The Edge, about to be replaced with a new model, dropped 19 percent, while the low-volume Flex fell 30 percent.

Ford’s top-seller, the F-series pickup, rose 5 percent to 63,240. Ford said transaction prices on F series are up $2,500 per vehicle so far this year.

“We’ve had a balanced approach with incentive spend. We have the highest transaction price and lowest incentive spend of the Big 3 in the segment,” Felice said, referring to trucks.

Said Akshay Anand, analyst for Kelley Blue Book: “The F-150 also continues to do well despite winding down its current generation in preparation for the all-new variant coming later this year. More importantly, Ford isn’t heavily incentivizing the current generation F series, yet it continues to sell, a hugely positive sign for the brand.”

Ford said it has about a 120-day supply of F series. Toward the end of August, Ford will shut its Dearborn Assembly Plant for a two-month changeover from the current steel-body F-150 to the aluminum-body 2015 version.

Boosted by the arrival of the MKC luxury compact crossover, Lincoln sales ticked up 14 percent in July. Lincoln sold 1,534 MKCs in July making it the brand’s third best-selling vehicle behind the MKZ with 2,776 and the MKX with 1,983 -- despite the fact that the MKC marketing launch is still a month away.

You can reach Bradford Wernle at

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