October 2015: Ford Motor Company

[William Maley]

DEMAND FOR COMPANY’S NEWEST VEHICLES PUSHES FORD SALES TO A 13 PERCENT GAIN IN OCTOBER; RETAIL SALES UP 13 PERCENT

• Ford Motor Company total and retail U.S. sales up 13 percent; both had best October performance in 11 years
• F-Series retail sales increase 12 percent, driving total F-Series sales up 3 percent to their highest October since 2004; commercial vans up 75 percent for best October since 1988
• Ford-brand SUV sales up 12 percent for the best October since 2004; New Explorer up 30 percent, and all-new Edge up 39 percent
• Ford-brand car sales up 17 percent, with overall Mustang increasing 121 percent – its best October performance since 2006; Fusion posts best October ever
• All-new Lincoln MKX posts record October sales

DEARBORN, Mich., Nov. 3, 2015 – Ford Motor Company U.S. sales totaled 213,938 vehicles last month, up 13 percent from a year ago. Retail sales results were up 13 percent with 154,036 vehicles sold – for the company’s best October sales performance since 2004.

 

Retail sales increased across the product portfolio, with cars up 8 percent, with both trucks and SUVs rising 15 percent.

 

“Strong demand for our vehicles provided another double-digit sales increase in October, and Ford vehicles posted all-time record average transaction pricing of $34,600 per vehicle,” said Mark LaNeve, Ford vice president, U.S. Marketing, Sales and Service. “Gains in our truck business were especially strong, with F-Series delivering its fourth straight month of sales gains and its best October retail levels since 2004.”

 

Ford vehicle average transaction prices rose $1,800 versus a year ago – the largest gain among any major automaker.

 

F-Series sales reached 65,500 trucks in October. At 65 percent of F-150 retail sales last month, EcoBoost®-equipped F-150 sales grew 95 percent versus a year ago.

 

Ford commercial van sales totaled 19,274 vehicles for October, with all-new Transit sales totaling 9,361 vehicles – a 75 percent increase in overall van sales for the month and the company’s best October van performance in nearly 30 years.

 

Ford-brand SUVs posted a 12 percent increase overall with 60,786 vehicles sold – driven by the company’s newest products.

 

The new Explorer saw a 30 percent gain, while the all-new Edge achieved an October increase of 39 percent. 

 

Mustang and Fusion performance fueled Ford brand car sales growth in October by 17 percent. Mustang posted a 121 percent increase with 10,096 cars sold, while Fusion posted its best-ever October with 23,668 cars sold.

 

The all-new Lincoln MKX posted its best-ever October sales results with 2,189 SUVs sold, a 10 percent overall gain for the month.

[Guest Wings4Life(BANNED)]

Nice gains in retail and total. Van sales is incredible. Ford owns commercial segment. Mustang and F series continues to knock it out of the park.  That's what happens when you deliver at or above customer expectations comprehensively, rather than a myopic single view perception of what some believe they care most about.

 

Congrats to Ford.

 

Oh, and they just kicked off their year end sales blitz, biggest in years that will carry through to New Years.  I am a potential new product customer myself and will be looking into it.  

[Drew Dowdell]

Wow! Look at the transit go! It's like the Promaster didn't even exist. 

[surreal1272]

Having driven the Transit a few months ago to move a sectional, I honestly say that I am not surprised by its success. It is a surprisingly nimble van for its size and quite comfortable to drive.

[ccap41]

Speaking of Transit, I've actually seen a lot of them in either box truck form or others the past few weeks. Aaaaaand... WHERE ARE THESE E-SERIES THEY'RE STILL SELLING?!?!? lol

 

Good numbers across the board for Ford, less so for Lincoln.. Hopefully they will eventually just give us a damn RWD Lincoln. One can only dream.

 

Drew,

The Promaster is SO ugly that even a company who only wants the best tool for the job wouldn't want his company's name on the size of that.

Edited November 3, 2015 by ccap41

[Guest Wings4Life(BANNED)]

Just noticed Lincoln.  Yeah, status quo for now. Several new products next year should help. 

Oh, and RWD will not really add sales.  Offering it is the right thing to do, and thy will be done, but to expect sales gains because of it, one will be saddened.  

[Stew]

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

[ccap41]

Just noticed Lincoln.  Yeah, status quo for now. Several new products next year should help. 

Oh, and RWD will not really add sales.  Offering it is the right thing to do, and thy will be done, but to expect sales gains because of it, one will be saddened.  

I know it won't add sales directly.. but it would grab some enthusiasts' attention and possibly just the general public's attention and get some indirect sales.

[Suaviloquent]

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Actually if you look at it closely incentives can be actually be part of a solution for maximizing revenue or lowering costs.

 

Simply put, they are gaining more in revenue by offering incentives, that they could without.

 

Sound business strategy. And same of GM. Brand new truck really, with incentives pushing 10k very soon.

 

INCENTIVES aren't bad folks, especially if it maximizes the bottom-line.

[Guest Wings4Life(BANNED)]

 

Just noticed Lincoln.  Yeah, status quo for now. Several new products next year should help. 

Oh, and RWD will not really add sales.  Offering it is the right thing to do, and thy will be done, but to expect sales gains because of it, one will be saddened.  

I know it won't add sales directly.. but it would grab some enthusiasts' attention and possibly just the general public's attention and get some indirect sales.

 

 

Well, enthusiasts sales are minimal for sure, but Lincoln has that covered sooner than later, and AWD is the key there, not RWD.

[Stew]

 

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Actually if you look at it closely incentives can be actually be part of a solution for maximizing revenue or lowering costs.

 

Simply put, they are gaining more in revenue by offering incentives, that they could without.

 

Sound business strategy. And same of GM. Brand new truck really, with incentives pushing 10k very soon.

 

INCENTIVES aren't bad folks, especially if it maximizes the bottom-line.

 

Not really.  Say you make 11 grand profit at a dealer negotiated price.  If you knock 10k off that price it drives the profit down to 1 grand, Hence you have to sell 11 trucks at the incentive price to make the same amount of profit as if you could sale one at full price.  In any case, they all do it, but he F-150 is the newest of the bunch and to be seeing such lofty discounts is no a good thing.

[ccap41]

 

 

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Actually if you look at it closely incentives can be actually be part of a solution for maximizing revenue or lowering costs.

 

Simply put, they are gaining more in revenue by offering incentives, that they could without.

 

Sound business strategy. And same of GM. Brand new truck really, with incentives pushing 10k very soon.

 

INCENTIVES aren't bad folks, especially if it maximizes the bottom-line.

 

Not really.  Say you make 11 grand profit at a dealer negotiated price.  If you knock 10k off that price it drives the profit down to 1 grand, Hence you have to sell 11 trucks at the incentive price to make the same amount of profit as if you could sale one at full price.  In any case, they all do it, but he F-150 is the newest of the bunch and to be seeing such lofty discounts is no a good thing.

 

If I'm not wrong, some of those dealer incentives are at the dealer's expense not Fords. So while some incentives are costing Ford profit(it's arguable that they would sell any at ful msrp) some are costing the dealer profits while Ford walks away with their full asking price to the dealers.

 

Also, every mainstream manufacturer does it and they all do it all the time, not just after the new model year of a new vehicle. If they are showing their heavy discounts and continuing to increase their profits I'm sure the only people concerned about the incentive are the ones on the internet because they're doing juuuuust fine.

Edited November 3, 2015 by ccap41

[Drew Dowdell]

All three of the big three are in an incentive war in the truck department right now (Except the Canyonado)

 

Incentives on the F-150 are just a cost of doing business when both of the main competitors are doing the same thing. 

[Stew]

 

 

 

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Not bad.  i am sure the 10k plus dealers are offering on the hoods of F-series is helping now.  They should have brought the Transit here years ago!   All of the big 3 had fantastic Octobers!

 

Actually if you look at it closely incentives can be actually be part of a solution for maximizing revenue or lowering costs.

 

Simply put, they are gaining more in revenue by offering incentives, that they could without.

 

Sound business strategy. And same of GM. Brand new truck really, with incentives pushing 10k very soon.

 

INCENTIVES aren't bad folks, especially if it maximizes the bottom-line.

 

Not really.  Say you make 11 grand profit at a dealer negotiated price.  If you knock 10k off that price it drives the profit down to 1 grand, Hence you have to sell 11 trucks at the incentive price to make the same amount of profit as if you could sale one at full price.  In any case, they all do it, but he F-150 is the newest of the bunch and to be seeing such lofty discounts is no a good thing.

 

If I'm not wrong, some of those dealer incentives are at the dealer's expense not Fords. So while some incentives are costing Ford profit(it's arguable that they would sell any at ful msrp) some are costing the dealer profits while Ford walks away with their full asking price to the dealers.

 

Also, every mainstream manufacturer does it and they all do it all the time, not just after the new model year of a new vehicle. If they are showing their heavy discounts and continuing to increase their profits I'm sure the only people concerned about the incentive are the ones on the internet because they're doing juuuuust fine.

 

This is very true and i was just trying to simplify it.  In any case the main problem is that trucks are just too daggone expensive these days. 

[ccap41]

I could not agree more. They are just outrageously priced. It's stupid when you build a vehicle online and have absolutely no clue what you'd actually pay at a dealer because there are consistantly different rebates and incentives going around.

[Suaviloquent]

It's hard to explain sales discounts and incentives from just a unit profit basis. There's a whole lot more to it. 

 

I can't even get into explaining it without making a post pages and pages long. Either way, incentives are a cost of doing business, but manipulating them in an objective function to maximize profit is possible. 

 

And profit margins aren't fixed for a single product.

 

Too many people believe that a company's cost scales up the same amount as you increase price. AKA - fixed profit per unit. Not even close.

 

Whatever Ford is doing in the pickup segment, it continues to be something that others follow. It is the segment benchmark, even if it isn't the best outright product.

 

Everyone thinks MSRP is the upper bound for a product. Hardly, some vehicles sell above MSRP. And it's quite obvious that custom orders against vehicles on the lot have much reduced incentives. And internal pricing could really flip deal. $10k off retail might still be $10k of profit. Who knows? MSRP is more of a reference, not a measure of true profit. Like how we use the 3 states of water for the our measure for temperature. 

 

Again, going for the fully-optioned F150 that reaches $65,000 and above, sure, the incentives are there for a reason. But they're still getting massive profit from one of those. Easily one high trim F150 could account for the per unit increase of profit from 3 to 4 lower models.

 

Everyone looks at the incentives and always quotes the maximum. It's so misinformed. And people are very forgetful. The Silverado also had a very early onset of incentive spending. But people forget, based on their priorities.

 

Anyways, Ford continues to be operating efficiently, getting the most use out of its somewhat dated lineup.

[Guest Wings4Life(BANNED)]

Behind the Numbers with Erich Merkle: October, 2015

 

Our second half story continues to play out, according to plan!

For those of you that have been reading this column since the beginning of the year, we talked in great detail about the second half of the year and the uplift we would receive from our new products. Here we are. October marked our best overall and retail sales performance since 2004, with both up 13 percent for the month.

Our newest products continue to drive our sales and our average transaction pricing. Think for a moment about a 13 percent increase at retail, our best October retail sales performance since 2004 and now add in record average transaction prices. Our average transaction pricing last month hit a record high of $34,600 per vehicle. That’s $1,800 higher than where we were a year ago and the largest gain of any major automaker. How does this happen? It’s not just new products but the quality of the execution of those products. That’s our lifeblood. A well-executed new product generally commands a higher price point, as it is a something people want and they perceive it to be of high value. We see this with the all-new F-150, the all-new Edge and the new Explorer which have increased their average transaction prices by $3,000, $4,300 and $2,800 respectively versus a year ago.

 

Growth came from across the portfolio, with Ford-brand car sales up 17 percent over last year. Mustang sales increased 121 percent, marking the best October performance since 2006. Starting in November, Mustang will be moving into much tougher year-over-year comparisons, as last year we were filling a lot of early orders and pent-up demand for the new model. Don’t be too alarmed if you don’t see these big gains again for a while. Fusion had its best October ever with sales beating last year’s record by 4 percent. Retail sales were up a stronger 8 percent despite the fact that Fusion is competing in a very brutal segment where many car customers are switching over to SUVs. It’s not Mustang-type increases, but Fusion is performing really well in a shrinking segment that is very competitive.

Switching gears to SUVs. . . Ford-brand SUV sales were up 12 percent, making it

our best October since 2004.

 

Sales were driven by the Edge – up 39 percent – and

the Explorer, which was up 30 percent. Remember the average transaction

pricing that I talked about earlier. Edge average transaction pricing was up $4,300

and Explorer was up $2,800. Combine this with the increase in sales and you see

how this is significant.

Edited November 4, 2015 by Wings4Life

[Drew Dowdell]

The Edge has improved so much that it really does deserve those increase in ATPs.  Explorer has improved an equal amount and deserves an equal increase, but it may be harder for people to stomach that much of an increase at those prices.