Ford Stock Gains Despite Falling US Sales

By Mariliana Fotopoulou Thursday, January 7, 2021

Ford said its US car sales fell by 15.6% in 2020 as the pandemic forced businesses to reduce their capital spending.

Popular Pickup Attracts Lower Interest

Ford sold 542,749 units in the fourth quarter of 2020, representing a decline of 9.8% of their business compared to a year ago, the carmaker revealed in a press release. Lower total sales are a direct result of tumbling demand for Ford cars, a unit that saw a decline of 41.1% compared to the same quarter in 2019.

“Fourth quarter represented an inflection point at Ford in our transition from cars to a much greater focus on iconic trucks, SUVs and electric vehicles to better serve our customers. We began to see our strongest evidence of this in December with retail sales up [5.3%] with the launch of our new F-150, Bronco Sport and Mustang Mach-E. We are well-positioned to see the benefits of our focused efforts throughout 2021,” said Andrew Frick, vice president, Ford Sales US and Canada.

Sales of Ford trucks also fell while the company managed to sell more SUVs than in 2019. Its popular pickup truck F-150 attracted high interest once again, but due to low inventories, Ford couldn’t sell as many of these as it hoped.

Hence, F-150 sales fell by 32.7% amid “lingering effects of the Q2 coronavirus production.” According to Erich Merkle, Ford’s head of US sales analysis, inventories of the F-150 fell to 141,000 units from 267,000 a year earlier.

“We’re optimizing the production at both plants right now and it’s a matter of getting more F-150s out to our dealer lots,” he told CNBC.

On a more positive note, Ford is buoyed by sales of its Explorer SUV model. The company managed to sell 226,217 Explorer units as the model attempts to establish itself as America’s best-selling mid-size SUV.

“Explorer represents one of the few vehicles to increase its sales in 2020, with a reported gain of [20.9%]. Q4 represents the initiation of Bronco Sport and late December introduction of Mustang Mach-E as Ford transitions from cars to SUVs,” the company added in a press release.

Shares of Ford rose 2.2% on Wednesday before adding a further 1% in pre-open trading Thursday.

Summary

Ford reported lower full-year and Q4 auto sales for the US market amid the pandemic, lower commercial interest to invest in fleets, and tight inventories of its popular F-150 pickup trucks.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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