Behind the Numbers with Erich Merkle: December 2018

Now that 2018 is behind us it’s a good time to reflect on the past 12 months.  We had some great takeaways from the year.  Ford marked its ninth straight year as America’s favorite brand with a total of 2,393,731 vehicles sold in 2018.  F-Series retained its title as America’s best-selling pickup for the 42nd consecutive year.  Ford continued its reign as the best-seller of commercial vans in America for 40 straight years and had another record year of SUV sales.

For the month of December, Ford’s U.S. sales were down 8.8 percent, which at first glance may seem a bit alarming but it wasn’t a big surprise.  We expected to see a large decline due to fleet order timing and we did – particularly with daily rental orders which were down 41.5 percent last month.  Our retail sales were down a more modest 4.8 percent for the month, as we manage Escape and Explorer sales leading up to the launch of both new models later this year.  As I mentioned in last month’s column, we’re going to have to keep a watchful eye on inventories, incentive spend and leasing on Escape and Explorer in the coming months leading up to launch.  Boosting incentives would increase sales in the short term but it would also push down average transaction pricing, making it difficult to introduce the new models at healthy price points.  And, if we were to lease more Escapes and Explorers now, they will eventually come back to dealer lots and dampen residual values. It’s very important that we properly manage the transition of these two vehicles correctly now to ensure long-term success for our upcoming products.   

Winding-down car sales also impacted our December results.   Focus sales were down 67.4 percent in December; at this point we’re just selling whatever stock is left on dealer lots.  As we move into 2019, Taurus and Fiesta will also end production. This will be that short period where we are winding down cars but have not yet launched our all-new SUV products.

F-Series had a spectacular 2018 with 909,330 trucks sold, making it our 42nd consecutive year as America’s best-selling pickup.  It was our third best year in F-Series history, and what makes it even more incredible is that these results came with record transaction pricing for the year.  We had ten straight months of F-Series sales above the 70,000-mark in 2018, with 87,772 trucks sold in the month of December.  It was truly a phenomenal year, as no other truck commands this kind of volume at these transaction prices.

Ford brand SUVs had a record year with 797,238 vehicles sold.  This came on the success of Expedition and EcoSport and sets up the brand very well as we look toward transitioning to the all-new Explorer and Escape later this year.  Expedition retail sales were up 35.4 percent this year, and EcoSport added just over 54,000 sales to Ford brand SUVs in 2018. 

Vans are so often underappreciated, but they are so important to our business.  They may not be sexy, but they get stuff done! Vans are like the offensive linemen on a football team. Not much fame or time in the spotlight, but try to participate in a game without them – you can’t. Everyone knows when they are bad, but when they are great they are rarely appreciated. We have a 40-year all-pro van line up, as Ford marked its 40th straight year (season) as America’s best-selling commercial van line.  We sold 217,653 commercial vans in 2018, with Transit representing 137,794 vehicles in the mix. This makes Transit America’s best-selling commercial van since it first went on sale in 2015.

As we pause to reflect on 2018 we maintained some key leadership titles with impressive results from our trucks, SUVs and vans, which is exactly where we are placing our focus as we move forward. This year, we’re looking forward to the introduction of the all-new Ford Ranger, Explorer and Escape.  There is no doubt that we have a lot of hard work ahead, especially in the first half of the year, as we manage the transition to the new Explorer and Escape.  But we’re also looking forward to the positive momentum that we will begin to see later this year from the start of our all-new SUV portfolio launches.   

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