Ford sales down 33% in second quarter
The Detroit Three posted sales declines of more than 30% in the second quarter as the coronavirus pandemic raged through the United States.
Ford Motor Co. sales in the second quarter dropped 33%, the Dearborn automaker reported Thursday. The numbers come a day after General Motors Co. reported a 34% sales decline and Fiat Chrysler Automobiles NV a 39% drop in the same three-month period, showing just how hard COVID-19 affected auto sales as much of the U.S. economy was shut down.
State economies have reopened and there's been positive growth in jobs, with the U.S. Bureau of Labor Statistics saying Thursday that 4.8 million jobs were added in June. But it remains unclear how recent surges in coronavirus cases that have revived certain stay-at-home restrictions — and expiring unemployment stimulus — will hit future sales.
Incentive programs offered by Ford during the second quarter, including 0% for 72 months, helped dealers like Tim Hovik, owner of San Tan Ford in Gilbert, Arizona, and vice chairman of Ford’s national dealer council.
"The Ford programs are more competitive and more consumer friendly, and have given us a leg up on competition," Hovik said. "That has been a key to our success. We have had a better line of sight than a lot of competition and it's really allowed dealers to be much more positive and develop very solid, consistent business plans as we worked through this thing."
Hovik never had to close his dealership during the pandemic. His sales for the year are flat over last year, he said: "We are holding up pretty well."
He had about $54 million worth of inventory in mid-March and is down to about $26 million, but "the sun is coming back to shine," he said, since he's expecting a 30-days supply shipment in the next 30 days. The latest data from Cox Automotive shows Ford with inventory levels closer to 90 days, above the national average of 70 days.
"As the capacity of the factories increases, I will be getting more … the reality is we are going to be a little tight for the rest of the year," he said.
With people transitioning to cross-country vacations with their car during the pandemic, Hovik is hopeful that movement will boost sales the rest of the summer: "That’s played a factor and I think that will continue to drive demand in our business."
Jim Seavitt, owner of Village Ford in Dearborn, sold 265 new vehicles in June, making for his best month ever in the last three years. Incentives and pent-up demand helped lure would-be buyers back to the showroom.
“People are back on the market and people have money and they have confidence in their jobs,” he said. “For the month of July, I don’t think we have a chance to be as good as we were in June."
With its dealer network, Ford and other automakers shifted to online and remote sales in the second quarter, which helped grow the automaker's retail share by an estimated full percentage point to 13.3% — Ford’s best retail share quarter in five years.
"Our performance in Q2 was really driven by Ford and our dealers’ deep commitment to customers and quick action taken to support our customers during these unprecedented times," said Mark LaNeve, Ford vice president for U.S. marketing, sales and service, in a statement. "Our support programs continue with our recent introduction of ‘Ford Promise’ to provide extra security during these difficult times. It’s another way Ford is standing with hard-working Americans.”
Ford sold 433,869 in the second quarter, down from 650,336 sold last year. Ford's retail sales were down less than 14.3%. The coronavirus shutdown affected fleet sales the most. Daily rental was down 94%, while commercial was off 78% from production shutdowns. The commercial performance did improve through the quarter, Ford noted.
Ford's profitable F-Series had overall sales of 180,825 pickups, down 22.7% over last year. The F-Series did expand its leadership position in the second quarter with an estimated 2.6 percentage point increase in retail share. In June, the Ford Explorer led as the best-selling midsize SUV. Overall Explorer sales were up 12% over last year.
The performance, Jessica Caldwell, executive director of insights at Edmunds.com, says, "reiterates how strong their truck and SUV lineup is for them and how that really is carrying these automakers, particularly the Detroit automakers, through this downtime."
Ford recently revealed its new generation of its money-making F-150, which is scheduled to go on sale later this year. The Blue Oval will unveil the new Bronco, a vehicle that's been out of production since 1996, on July 8. The automaker will broadcast the virtual reveal of the Bronco across Disney’s broadcast, cable, digital and streaming properties, including ABC, ESPN, National Geographic and Hulu, during the first commercial break in the 8 p.m. EDT hour on July 13. The Bronco will launch in 2021.
"They are selling down a lot of vehicles and then launching going forward," said Michelle Krebs, senior director of automotive relations for Cox Automotive. "They have decent inventories. They have a lot of new product launches if they nail those they will be in pretty good shape."