Ford’s US Retail Sales Rose 3.5% in May



Solid truck and SUV sales in May

In May, Ford Motor Company (F) sold ~81,701 SUV units—an increase of ~0.5% YoY (year-over-year). Adding to the optimism, the sales in Ford’s truck segment rose ~9.4% to 108,605 units in May from 99,237 units sold in May 2017. Now, let’s take a closer look at the recovery in Ford’s retail sales.

In April, Ford reported a fall of 4.6% in the SUV segment’s sales, which stood at 69,940 units—much lower compared to May.

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US retail sales recovered

Ford’s US sales to retail customers were at 163,796 vehicle units with an ~3.5% YoY increase in May after falling 2.6% YoY in April. Last month, Ford’s Expedition retail sales rose 41.8% YoY, while the Lincoln Navigator sales witnessed triple-digit growth. The major gains in the Expedition and Navigator retail sales drove Ford’s total retail sales up last month.

In 2017, Ford’s truck and SUV retail sales in the United States rose 4.3% YoY. However, the company’s car retail sales fell 15.2% YoY.

Segment-wise YTD sales

On YTD (year-to-date) basis, Ford’s car and SUV sales have fallen 13.8% and 2.7% YoY, respectively. The company’s truck sales have risen 4.4% YoY.

As we noted earlier in this series, trucks and SUVs tend to yield higher profit margins for auto companies compared to small vehicles. Last month, the drop in Ford’s sales in the SUV and retail segments could drive investors’ negative sentiments.

According to Ford’s US industry estimates, consumers’ shift from passenger cars to SUVs continued in May. The US demand for heavyweight vehicles like SUVs and trucks has increased in the last three years. All of the major auto manufacturers (FXD) including Ford, General Motors (GM), Toyota (TM), and Fiat Chrysler (FCAU) have profited from the positive pattern in US auto demand.

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