Ford posted 1.5% increase in light-vehicle sales for June 2015

Article by Andrew Christian, on July 3, 2015

Ford Motor Co.’s light-vehicle sales in the U.S. rose by 1.5% in June 2015, despite its F-series falling to its lowest level of deliveries since January. About 35% of Ford’s sales last month were fleet, its highest percentage within the past two years. Ford has diverted almost all of the F-150s it is producing to retail customers until it can expand its inventory.

The automaker said that fleet sales increased by 3.8% while retail sales reported a 0.5% growth. Mark LaNeve, the U.S. sales and marketing chief of Ford, said that the fleet increase in June is purely a matter of “timing” as the company coped with orders from rental-car firms, which made up 18% of brand sales in June.

He also said that in the second half of 2015, F-150 fleet orders are expected to be higher. It’s estimated that by the end of September, the inventory of the aluminum-bodied truck will reach normal levels. LaNeve shared that at the start of June, Ford had a F1-150 inventory of 75,000 units, which is much lower than its target of 120,000 to 130,000 units.

This is a marked drop from 141,000 units the past year. In a conference call, LaNeve told analysts and reporters that the automaker is currently at full production but it isn’t at full availability yet. He emphasized that there are improvements every month to its inventory volume as well as the variety. In early June, production of the F-150 was at full speed, ending a long model-changeover process that started late last year.

June 2015 sales of the F series, including the F-150 and Super Duty, decreased by 8.9%. But for the first 6 months of the year, it had a 2.4% drop. Meanwhile, the average transaction price for the F series increased $3,700, or 9.2%, from June last year, to $44,100. LaNeve said that these figures on pickups are “just incredible.”

The automaker clarified that these numbers are after incentives, which had been flat on the F series starting May and lower by $640 compared to the previous year. LaNeve implied that in the next several months, incentives attached to the F series may go up due to the growing discounts offered with rival trucks.

Last month, several Ford dealerships had advertised discounts from the sticker price of the 2015 F-150 of as much as $11,000. LaNeve explained that these were isolated promotions in certain markets to match the offers of their competitors in the area. He said that in the last two months, the competition has become more aggressive.

He shared that Ford has ambitions for its volume as well as for its profit so it aims to be more competitive. Last June, Ford reported a 12% increase in sales of utility vehicles, a 4% drop in car sales, and a 1.1% drop in truck sales. Ford’s redesigned Edge and updated Explorer each reported a 30% increase in sales. Mustang sales climbed 54%.

Sales for the Transit van were its best since it was launched a year ago. However, decreases in sales were observed year-over-year for the Fusion, Focus, Taurus, Escape and Transit Connect.

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