Ford Retail Sales Improve on Strength of Cars, Crossovers
May 30, 2007

Trying to wean itself off unprofitable fleet sales to rental car companies, Ford expects to report its first year-over-year retail sales increase since last fall when automakers post May sales on Friday.

“That’s particularly noteworthy because it would be our first year-over-year retail sales since last October,” George Pipas, Ford’s sales analyst, told AutoObserver.com.

Still, Edmunds.com predicts Ford sales, both retail and fleet, will be down about 12.3 percent compared with May 2006.

In addition, for the first time since the 1980s heyday of the Taurus, Ford’s retail sales volume is expected to be around 50 percent cars and car-based models.

Pipas' analysis shows that in 2004, 30 percent of Ford’s retail volume was from sales of cars and car-based utilities, namely the Ford Escape and Mercury Mariner; 70 percent was from trucks and truck-based SUVs.

In the first four months of 2007, 47 percent of Ford’s retail sales were cars and car- based utilities, which now include the Ford Edge and Lincoln MKX. With two sales days remaining in May, 52 percent of Ford’s retail sales are in cars and car-based models.

“I’m quite sure we have not seen a month since the 1980s when the Taurus was first introduced and before the Explorer was on the market that cars and car-based vehicles were over 50 percent of our retail sales,” Pipas said.

“We’ve gone from a 70-30 ratio of trucks to cars to 50-50 in three years. And much of the product to be introduced in the next 12 to 18 months will drive us further across the 50 percent line for cars/car-based crossovers,” he added.

Pipas says the challenge to the shifting mix is communicating its transformed showroom to consumers who think of Ford as a company that sells largely gas-guzzling trucks and big SUVs and being profitable with a vehicle mix of lower-margin cars and car-based models. “We’re making some progress in that,” he noted.

Pipas expects when final sales for May are tallied, the Ford Edge and Lincoln MKX will have their best months yet. Also having a good month are the redesigned 2008 Ford Escape and Mercury Mariner. Pipas credits higher Escape/Mariner sales not only to improvements in the product but also the message in national advertising that hybrid versions of those vehicles are available.  “It seems to be paying off this month.”

In general, Pipas predicts industry sales will be higher than the dismal sales of April and, for all manufacturers, retail sales will be higher in year-ago comparisons.

Edmunds.com forecasts industrywide new vehicle sales, including both retail and fleet sales, to be 1.48 million units, from last May by 4.2 percent on an adjusted basis and 0.3 percent on an unadjusted basis. This May had 26 selling days, one more than May 2006.

Posted by Michelle Krebs at 1:49 PM under Analysis , Ford | Comments (0) | digg this | Seed Newsvine