Ford's third-quarter sales fall 27% amid industrywide drop-off

Jordyn Grzelewski
The Detroit News

Ford Motor Co.'s U.S. sales fell more than 27% in the third quarter amid an industrywide drop-off due to a global semiconductor shortage that has severely depleted new-vehicle inventories and depressed full-year sales forecasts.

For the July through September period, Ford's sales of roughly 400,000 vehicles were down more than 27% from the third quarter of 2020, when the automaker reported 551,796 sales. In Q3 2019, before the coronavirus pandemic and related supply-chain issues hit auto production and sales, the Blue Oval had U.S. sales of more than 580,000 vehicles.

Last week, Ford's crosstown rivals General Motors Co. and Stellantis NV reported their third-quarter sales, respectively, were down 33% and 19% year-over-year. Ford came in No. 3 of the bunch for the quarter, behind GM's sales of 446,997 vehicles and Stellantis' 410,917.

In September, according to results released Monday, Ford sold 156,614 vehicles in the U.S., a 17.7% drop from September 2020 but an improvement over July's 120,053 sales and August's 124,176.

The Detroit automakers' challenges producing enough new vehicles to meet consumer need gave Japanese automaker Toyota Motor Corp. an edge in Q3, surpassing perennial leader GM as the No. 1 seller in the U.S. for an unprecedented second time so far this year. Toyota's quarterly sales of 566,005 were up 1% year-over-year. 

Meanwhile, Hyundai Motor America posted a 4% sales increase. Honda Motor Co. reported an 11% sales decline. And Volkswagen of America saw an 8% decline for the quarter. 

Ford's results

In September, Ford's retail sales fell 20.8% year-over-year, truck sales of 83,554 were down 22.6%, while SUV sales of 70,260 were up 3.4%.

But despite broad sales declines, there were a few bright spots for the Dearborn automaker.

"While Ford was down in September, it wasn’t down as much as the industry and as much as some of its key competitors and performed better than we forecasted," Michelle Krebs, an analyst at Cox Automotive, said in an email. "From our data, it appears Ford inventory has been improving somewhat in recent weeks. Ford got hit early (by the chip shortage), now some of its competitors are getting hit. Everyone seems to have a turn, just at different times."

Ford reported Monday that it has 21,000 more vehicles in inventory going into October than it did going into September, meaning sales this month could be bolstered by dealers having more product available. Overall, the automaker has 236,000 vehicles in gross stock.

"Going into the fourth quarter, Ford is in a bit better supply situation than it was earlier this year," Krebs added. "That should help with sales. The companies with the best supply and/or the most efficient distribution network win the sales."

Meanwhile, Ford highlighted some month-to-month improvements in production and deliveries. Retail sales rose 34.3% from August to September, for example, and the number of full-size Broncos in transit to dealers increased 200%. Deliveries of the highly anticipated SUV had been delayed due to quality issues with hard-top roofs.

Ford recorded 3,396 Bronco sales and 11,686 sales of the new Bronco Sport — Bronco's smaller sibling — in September.

And Ford says vehicles are moving from dealer lots to customers at the fastest pace of the year so far.

In recent months as it has navigated the pandemic and associated supply-chain shocks, Ford has put a greater emphasis on an order bank system in which customers go online to reserve and configure a vehicle, rather than strolling dealer lots to select what they want. Executives have said leaning more heavily on customer orders allows for greater efficiencies.

Last month, the automaker recorded 52,000 new retail orders, 11,000 more than in August. Thirty-one percent of retail sales last month were from previously-placed orders.

Meanwhile, September marked another new record for Ford's electrified vehicle sales amid the automaker's launch of its first wave of battery-electric vehicles and continued sales of hybrid vehicles. Electrified vehicle sales reached 9,150 in September, up 91.6% over last year.

Mustang Mach-E sales of 1,578 were up from 1,448 the previous month. Through September, the all-electric SUV — sales of which began in December 2020 — has 18,855 sales, which Ford says puts it second in fully-electric SUV sales behind Tesla's Model Y.

On the truck side, Ford said September was the best month for sales of its flagship F-Series franchise since the semiconductor shortage began, with 63,164 sales. Still, F-Series sales were down 17.7% from September 2020 and are down 9.2% year-to-date.

September was the first month where sales of Ford's new Maverick truck were recorded. The compact pickup notched 506 sales.

On the SUV side, sales were down year-over-year for every product that also was sold in 2020. Escape sales, for example, were down 31.8%, while Explorer sales were down 5.3%.

Lincoln brand sales were down 20.9% in September.

Through the first nine months of the year, Ford has sold nearly 1.4 million new vehicles in the U.S., down about 7% from the same period in 2020.

Q4 expectations

Kicking off the fourth quarter, typically one of the busiest sales periods, experts expect new-vehicle inventory shortages to persist. While automakers' bottom lines had benefited from the low-supply, high-demand environment earlier in the year as rising prices padded profits, the dearth of new vehicles is showing up in automakers' results as dealers have little to sell and research suggests many consumers are willing to hold off on car shopping for the time being.

Analysts project 2021 will close with approximately 15.5 million U.S. sales, better than last year's 14.5 million and far better than the 2009 sales of 10.4 million amid the Great Recession, but still not back to pre-pandemic levels of about 17 million units. Meanwhile, the chip shortage is expected to persist well into 2022.

Consulting firm AlixPartners projects the industry will take a $210 billion revenue hit globally, roughly double its earlier estimate. The firm now forecasts the industry will lose some 7.7 million vehicles it had planned to produce this year.

Twitter: @JGrzelewski

Staff Writers Kalea Hall and Breana Noble contributed.