Lower F-series volume dents Ford's tally
DETROIT -- Sales of the Ford F series fell to a three-month low in May, dropping nearly 10 percent from a year ago amid tight inventories and a decision not to join competitors in offering big Memorial Day discounts, company officials said today.
One of two F-150 plants is in its final month of ramping up production of the redesigned, aluminum-bodied pickup, and a shortage of high-strength steel frames built by a supplier in Kentucky has slowed output at both plants.
Mark LaNeve, Ford’s U.S. sales and marketing chief, would not say how much the frame shortage, reported by Automotive News last week, has affected output and sales, but he said Ford started May with half as many F-150s in inventory as it did a year earlier.
“We feel good about our number given those constraints,” LaNeve said on a conference call with analysts and reporters today. “We chose not to participate in some of the sales that went on around Memorial Day with the F-150. Later this year, we’re going to really be able to run at the market with full availability.”
Overall, Ford Motor Co.’s U.S. sales declined 1.3 percent year-over-year in May, with the F-series decline overshadowing a 1.8 percent increase for the rest of the company’s lineup, the company said in a statement today.
The Lincoln brand posted a 3.7 percent gain, though four of its six nameplates were down double digits. The exceptions were the MKC, which was new on the market a year ago, and the Navigator, which was up 50 percent.
The newly redesigned Edge crossover set a May record of 14,399 units, a 34 percent gain. Declines of 8.3 percent for the Escape and 2.9 percent for the Explorer, excluding the Explorer-based Police Interceptor, were due to low supplies, LaNeve said.
Ford is shortening the annual summer shutdown at plants that build the F series, Edge, Escape and Explorer to one week from the usual two to increase production by 40,000 units.
Sales of Ford Motor Co.’s cars rose 0.9 percent, including increases of 40 percent for the Mustang and 31 percent for the Fiesta. It was the second-best month ever for the Fiesta, according to the Automotive News Data Center, a sharp contrast to its 16 percent decline from January through April.
“Fiesta had a strong fleet month,” LaNeve said.
The numbers indicate that Ford has been pushing more of its car nameplates to fleet buyers while also reducing production as low gasoline prices sap demand for fuel-efficient, smaller vehicles across the industry.
In May, 16 percent of Ford’s sales went to rental-car companies, up from 12 percent a year ago. Meanwhile, inventories of cars dropped to 189,000 units at the end of May from 201,000 a month earlier, Ford said.
Erich Merkle, Ford’s chief U.S. sales analyst, said fleet sales can be volatile and that monthly variations tend to even out over time. He said fleet shipments accounted for 32 percent of Ford’s U.S. sales last month, compared with 30 percent year-to-date, and that cars represent about half of Ford’s fleet sales but 33 percent of its total sales this year.
F-150 prices rise
Fleet sales to commercial customers have fallen this year as Ford prioritizes retail deliveries of the F-150 during the production ramp-up.
That’s one of the factors helping the truck’s transaction prices soar. Buyers paid an average of $43,300 for the F series in May, an increase of $3,300 from a year ago and $600 more than in April, LaNeve said. Nearly two-thirds of buyers have chosen either the Lariat trim, which starts at about $40,000, or the top-end King Ranch or Platinum trims.
The 2015 version accounted for 63 percent of F-150 retail sales in May, up from 50 percent in April.
LaNeve said the F-150 ramp-up plan called for inventories to hit their lowest levels in May. Joe Hinrichs, Ford’s president of the Americas, also said in an April 30 interview that May was projected to be a low point for availability of the truck.
The frame shortage has limited supplies further, forcing Ford to cancel some overtime shifts and send workers home early on multiple occasions in the past few months.
“If you think about all the complexity, cab types and bed sizes, and take that across 3,000 dealers … that’s going to limit our opportunities in the market,” LaNeve said today. “May was the low point, and it gets better every month from there.”
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.