Why Ford’s US Retail Sales Fell 4% in December 2017



Weaker truck sales in December

In December 2017, Ford Motor Company (F) sold about 110,788 units of trucks with a decrease of about 1.0% on a YoY (year-over-year) basis. On the brighter side, the sales of the company’s SUV (sports utility vehicles) segment showcased significant positive growth of ~8.0% to 82,881 units in December 2017 from 76,766 units in December 2016.

Previously in November 2017, Ford reported a 4.1% rise in truck segment sales, which stood at 91,601 units.

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US retail sales disappointed

Ford’s US sales to retail customers were at 176,164 vehicle units, about a 4.0% decrease in December 2017 from December 2016. Last month, Ford’s SUV and truck segment retail sales both jumped up by 4.3% YoY. At the same time, its US retail car sales went down by 15.2% YoY, which was the primary reason for the drop in its retail sales in December. In November 2017, the company’s US retail sales rose 1.3% YoY to 156,064 units.

Mixed impact on 4Q17 results

As noted earlier in the series, trucks and sports utility vehicles tend to yield higher profit margins for auto companies as compared to their margins from small cars. Therefore, higher December US SUV segments sales but lower truck segment sales should have a mixed impact on Ford’s 4Q17 results.

Similarly, December retail sales weakness could also act as headwinds to Ford’s 4Q17 profits, as retail sales generate better profit margins than fleet sales to rental companies. Nevertheless, positive growth in its truck and SUV segment retail sales could act as tailwinds for its 4Q profitability.

US demand for heavyweight vehicles such as SUVs and trucks have notably increased in the last three years. All large auto industry players (IYK) including Ford, General Motors (GM), Toyota (TM), and Fiat Chrysler (FCAU) have benefitted from this positive auto sales trend.

Continue to the next part where we’ll see how GM’s December US sales data compared to Ford’s.


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