Ford sales down 9% from year ago
But automaker sees 3Q gain even as rate hikes kick in
Ford Motor Co.’s sales fell nearly 9% year-over-year in September amid continued supply constraints but were up 16% in the third quarter, according to the automaker’s latest sales numbers.
The Dearborn, Mich.based manufacturer sold 142,644 vehicles last month in the United States, down 8.9% from September 2021. For the quarter, Ford sold 464,674 vehicles — below some analysts’ expectations but up from the 400,843 it sold during the July-September period last year.
The results come one day after much of the rest of the auto industry reported mixed results for the third quarter — and as analysts and dealers say they’re starting to see the effects of rising interest rates on consumer demand, even as supply remains one of the industry’s biggest challenges.
Interest rates for auto loans hit their highest level since 2019 during the third quarter, according to Edmunds.com Inc.
Industry analysts have lowered sales forecasts for the year as supply challenges persist and signs of lower demand start to percolate. Cox Automotive, for example, recently lowered its full-year sales forecast to 13.7 million vehicles and said fourth-quarter sales would be constrained by “high prices, tight inventory and softening demand.”
Cox projects full-year sales will be down 9%, to their lowest level in a decade.
“The supply shortage has likely created some pent-up demand — folks who were essentially waiting in line for inventory to return,” Charlie Chesbrough, Cox’s senior economist, said in a statement ahead of sales numbers being reported Tuesday. “But the recent changes in the economic outlook from rising interest rates is beginning to chip away at demand, and the waiting line for new vehicles is likely getting much shorter.”
General Motors Co.’s
quarterly sales were up 24% year-over-year, while Jeepmaker Stellantis NV’s sales were down 6%.
Toyota Motor Corp.’s third-quarter U.S. sales fell 7.1%. And Honda Motor Co.’s dropped 36%, although the automaker said it saw improvement in September.
Hyundai Motor Co., meanwhile, saw sales grow 3% year-over-year in the third quarter. Volkswagen AG’s U.S. sales were up 12% for the quarter.
For Ford, investment research firm CFRA Research has reaffirmed its “buy” opinion on the automaker’s stock and maintained its 12-month price target of $18.
“With Ford having already warned of cost headwinds and supply chain issues, which will negatively impact Q3 earnings, we view most near-term risks surrounding the story as priced in at current levels, creating a buying opportunity,” analyst Garrett Nelson wrote in a note Tuesday. “Furthermore, we consider the stock’s dividend yield of 4.9% highly compelling after its recent 50% dividend hike announcement.”
Ford pointed to supply shortages and a larger than expected inventory of unfinished vehicles for the September sales slump.
Last month, Ford warned investors in a pre-earnings update that it was experiencing supply constraints and could have as many as 45,000 vehicles built but awaiting final parts to end the quarter. It expects to deliver those vehicles to dealers in the fourth quarter and reaffirmed its full-year earnings guidance.
The automaker had gross vehicle stock of 315,000 units at the end of the quarter, with 45% of that on dealer lots and the rest in transit, according to the company.
Ford’s September sales in the truck segment were down nearly 19% year-overyear. SUV sales were up 0.9%.
Ford’s electric vehicle sales were up nearly 200%, to 4,691 units. The automaker retained its status as the No. 2 EV brand in the U.S., behind industry leader Tesla Inc.
Ford’s share of the burgeoning EV segment rose 3.1 percentage points to 7% in September, driven by sales of Ford’s all-electric Mustang Mach-E, as well as growing sales of the F-150 Lightning pickup and E-Transit cargo van.
“Ford continued to see high-demand vehicles turning at record rates in September, while developing electric truck and van leadership and extending our overall truck leadership,” Andrew Frick, vice president of sales, distribution and trucks for Ford Blue, said in a statement. “We are very pleased with the work from our dealers, employees and the area’s first responders, as they are working tirelessly to recover in Florida from Hurricane Ian.”
One of the hottest (and most affordable) products in Ford’s portfolio, the Maverick compact pickup truck, turned on dealer lots in an average of six days last month. More than 80% of Maverick buyers are first-time truck buyers and are coming from vehicles such as the Honda CR-V and the Toyota RAV4, according to Ford.
In the SUV segment, monthly sales were up for the Ford EcoSport, Escape, Bronco and Mustang MachE. Monthly sales were down for the Bronco Sport, Edge, Explorer and Expedition.
In the truck segment, Ford’s flagship F-Series pickup lineup — the company’s profit driver — saw sales fall 26.6% last month. The company sold 1,918 all-electric F-150 Lightning trucks, bringing the year-to-date total to 8,760 units.
Sales of the Ranger, ESeries, Transit and heavy trucks were down. Sales of the Maverick and Transit Connect were up.
In September, sales of Ford’s luxury brand, Lincoln, were down 12.8% yearover-year. A bright spot was the Lincoln Aviator, sales of which grew 21%.