Ford's Stunning Leap Forward

I knew Toyota's (NYSE: TM  ) troubles were going to benefit somebody. And I knew Ford (NYSE: F  ) was on a roll.

But I didn't expect their results to be quite this dramatic.

Ford posted its February sales results today, and the numbers were outstanding. While the solid 43% gain over last February's results was impressive, the real mind-blower was this: Up 22% versus January.

This despite rough weather on the East Coast that was expected to mute sales significantly.

Wow.

That can't all be Toyota, can it?
There are a few factors there. First, Ford itself is on a roll, plain and simple: It's got hot products and a rapidly improving reputation. Second, fleet sales -- an important market for all of the U.S. automakers -- were all but dead at this time last year. And sure enough, Ford reports that fleet sales were up 74% over last February.

But it wasn't all fleet: Retail sales were up 28%. General Motors' combined sales -- retail and fleet -- were only up 12% over last year, and Honda's (NYSE: HMC  ) were up 12.7%.

GM's muted showing is one reason I can't yet say for sure that these sales were taken from Toyota. While Toyota's sales were down 8.7%, it's too early to tell who exactly benefited.

But no matter where those sales came from, Ford had a great month.

Digging into the numbers
How great a month? When compared to last February, it's all increases, everywhere we look. Cars? Up 54%. Trucks? Up 36%. SUVs up 39%. Ford brand up 46%, Lincoln 19%, Mercury 24%. Ford estimates that it gained three points of market share -- 17% versus 14% -- a seismic move if it can sustain it.

Oh, and this nugget: Ford outsold GM by 334 vehicles. That's the first time it has outsold GM on a monthly basis in the U.S. since 1998. For the moment, at least, that makes it No. 1 in America.

It's just highlight after highlight. The Fusion sedan? Up 116%. Taurus? Up 93%. F-Series pickups? Up 39%. Escape? Focus? Mustang? Up, up, up. You get the idea.

I can't find a weak point. It was a great month by any measure.

But can it last?
But as well as Ford is doing as a company, I'm not sure it can sustain it. With reports that Toyota and now GM are teeing up major marketing and incentives campaigns, that big market-share gain might prove challenging to hang on to. And if some big chunk of Ford's gains really did come from Toyota, and if Toyota is able to get past its troubles and regain its own mojo ... well, you can see the concern.

But one thing's for sure: It's going to be a while yet before the new automotive pecking order becomes clear.

Read more about the ongoing auto industry shakeout:

Fool contributor John Rosevear owns shares of Ford. Ford is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (34) | Recommend This Article (32)

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  • Report this Comment On March 02, 2010, at 4:30 PM, davidbark wrote:

    with all the great news about ford and huge volume its down twenty cents...hows that?

  • Report this Comment On March 02, 2010, at 4:49 PM, spawn44 wrote:

    Ford is firing on all cylinders at this level of industry sales it is going to go turbo when the economy fully recovers. With the new Fiesta and focus coming soon Ford will have two solid economy cars to compete with Toyota and Honda, Profit taking is why the stock slipped a little today. Don't sweat it, this stock will continue to tread upwards for years.

  • Report this Comment On March 02, 2010, at 4:54 PM, langco1 wrote:

    in spite of all the talk of a comeback for ford the sad truth is that ford has so much debt it will never come close to repaying it and in the end will wind up bankrupt and closed just like GM and chrysler already are...

  • Report this Comment On March 02, 2010, at 4:58 PM, jimworry wrote:

    I Can't believe how many Senators own Toyotas, what a JOKE! These are U. S. Government workers that we are paying from are American taxes. I know people will say everyone will should have the right to buy what they want, but if your working for the USA Buy USA products! 80% profits from foreign cars in USA go back to foreign governments!! Go to Japan and see how many government (Japan) workers own American Cars...NONE... Look at yourself or your neighbor, do you still have a job? Do you own a Toyota? How many more will be killed?God Bless the souls that have DIED from the gas pedal problems on Toyotas. Please don't kill my family with your Toyotas. Thank You

  • Report this Comment On March 02, 2010, at 5:01 PM, jimworry wrote:

    I Can't believe how many Senators own Toyotas, what a JOKE! These are U. S. Government workers that we are paying from are American taxes. I know people will say everyone will should have the right to buy what they want, but if your working for the USA Buy USA products! 80% profits from foreign cars in USA go back to foreign governments!! Go to Japan and see how many government (Japan) workers own American Cars...NONE... Look at yourself or your neighbor, do you still have a job? Do you own a Toyota? How many more will be killed?God Bless the souls that have DIED from the gas pedal problems on Toyotas. Please don't kill my family with your Toyotas. Thank You

  • Report this Comment On March 02, 2010, at 6:55 PM, TMFMarlowe wrote:

    langco1, GM is closed? I don't think anyone told my local Chevy dealer... he keeps trying to get me to buy a Camaro.

    I think Ford has a pretty good chance of paying off that debt, maybe sooner than you think.

    Thanks for reading.

    John Rosevear

  • Report this Comment On March 02, 2010, at 6:59 PM, Milligram46 wrote:

    @davidbark - you buy on rumor, sell on news. Investing 101. Makes little sense I realize but that is the way it is.

  • Report this Comment On March 02, 2010, at 7:02 PM, Milligram46 wrote:

    @TMFMarlowe

    Curious on your thoughts on GM. Yes "only" up 12%, but up 32% when you look at the four remaining core divisions. The four divisions cut loose were down 86%, and GM pushed almost all of the existing inventory off of their books in December of 2009. With the $6.5K rebates offered on Saturns and Pontiacs over the holidays, inventory is next to nothing. Last report I saw in early January said only 15K unsold units left in all of North America. Remember, production on Saturn/Pontiac units ended from April 2009 to August of 2009, depending on the vehicle.

    I think the 32% showing is impressive. I will cut and paste some really mind blowingly bad Toyota data shortly.

  • Report this Comment On March 02, 2010, at 7:05 PM, Milligram46 wrote:

    Here is Toyota sales data from February 2010:

    http://pressroom.toyota.com/pr/tms/document/February_10_Sale...

    But lets put this into some real context and look at the 2008 data over the 2009 data over the 2010 data.

    http://pressroom.toyota.com/pr/tms/toyota-reports-february-s...

    (you have to click the link to get the data).

    I just finished crunching the numbers John, and February 2010 for Toyota was a blood bath when you look at 2009 and then back to 2008:

    TOYOTA MOTOR CAR DECLINES

    Avalon: down 65% from 2009, 80% from 2008

    Scion tC: down 63% from 2009, 72% from 2008

    Scion xB: down 6% from 2009, 59% from 2008

    Scion xD: down 27% from 2009, 58% from 2008

    Yaris: down 13% from 2009, 55% from 2008

    Camry: down 20% from 2009, 51% from 2008

    Prius: UP 10% from 2009, down 26% from 2008

    Corolla: Down 6% from 2009, down 19% from 2008

    LEXUS CAR DECLINES

    SC: down 65% from 2009, 98% from 2008

    GS: down 18% from 2009, 86% from 2008

    IS: down 7% from 2009, 82% from 2008

    LS: UP 14% from 2009, down 50% from 2008

    ES: down 9% from 2009, 42% from 2008

    HS: N/A (no 2009 or 2008 sales, new model)

    TOYOTA MOTOR SUV DECLINES

    Sequoia: Down 55% from 2009, 73% from 2008

    Sienna: Down 24% from 2009, 70% from 2008

    Land Cruiser: Down 6% from 2009, 69% from 2008

    Highlander: Down 28% from 2009, 65% from 2008

    FJ Cruiser: Down 16% from 2009, 60% from 2008

    4Runner: UP 55% from 2009, Down 42% from 2008

    RAV4: Down 19% from 2009, Down 23% from 2008

    TOYOTA TRUCK DECLINES

    Tundra: Doiwn 5% from 2009, Down 65% from 2008

    Tacoma: Up 6% from 2009, Down 38% from 2008

    LEXUS SUV DECLINES:

    LX: Down 10% from 2009, 58% from 2008

    RX: Down 8% from 2009, 17% from 2008

    GX: Up 186% from 2009, down 6% from 2008

    These are simply awful. There is no way on earth to find any good news in this data. Toyota has a massive over capacity problem with manufacturing as it is today, and a completed factory in Mississippi sitting completely idle.

    If this is the "new normal," Toyota is in huge trouble.

    Also, current Toyota owners can lament the new incentives. 0% financing for 60 months, PLUS $500 to $3,000 rebates, and free service for two years to current Toyota owners. This is going to slash resale values. Further, Ford, Hyundai and GM can play the incentive game all day long.

    Also, with the Tacoma and Corolla being the only two vehicles showing and shred of strength, it just makes Toyota's argument about shutting down NUMMI as all GM's fault go from weak - to super weak. They got an excuse to jettison the higher paid UAW workers, despite the track record of quality out of NUMMI, and get rid of capacity at the same time.

    If you want I can e-mail you my Excel sheet with all of the sales data (sourced above).

  • Report this Comment On March 02, 2010, at 7:07 PM, TMFMarlowe wrote:

    Milligram46: I'm going to take a look at the bigger picture in an article for tomorrow.... short answer is that right now I think GM did fine. I expect them to take some time for their new management regime to get its act together -- today's shakeup was kind of entertaining -- before they really get traction. They're trying, though -- the have a 0% financing event coming up that might get some things going.

    The Toyota data is interesting... the big drop in Camry sales lines up nicely with the big pop in Accord sales, for instance. I haven't spent much time with it yet, though... I'm curious as to what you're seeing.

    John

  • Report this Comment On March 02, 2010, at 7:12 PM, TMFMarlowe wrote:

    One caveat while looking at by-model Toyota declines... remember that some of those models were pulled off the market for several selling days. I think February stands a good chance of being an outlier.

    They are putting a LOT of muscle behind this March sales event of theirs to try to turn those numbers around. If it works, we'll know something. If it doesn't work... we'll know something else.

    John

  • Report this Comment On March 02, 2010, at 7:37 PM, TMFBreakerRob wrote:

    Re: Ford Debt

    Ford believes it can sufficiently retire the debt largely through cash flow, but I wouldn't be in the least bit surprised if there is another round or two of dilution.

    Short of another huge shock in the economy, Ford is going to be fine and will not be going bankrupt any time soon.

  • Report this Comment On March 02, 2010, at 8:29 PM, Milligram46 wrote:

    @TMFMarlowe

    I found the plunge in Yaris sales and the huge spike in Versa sales at Nissan very interesting.

    Avalon sales plunge also lines up with the huge spike in Buick LaCrosse sales.

    I would also suggest that GM was a big winner taking away RAV4 customers and getting them into the Equinox or the Terrain - both had giant jumps.

    Agree on Honda Accord vs. Toyota Camry, and the Hyundai Sonata, and the Ford Fusion - LOL. Remember, 55% decline represents a HUGE number of cars. I have a hard time believing Honda's claim that big spike in Accord sales is because of the Crosstour (which they roll into the number). That is one UGLY vehicle (but Honda sells the Element).

    As far as the overall hurt for February being on the sales ban, my first through was that also. The sales ban took affect on 1/27, and was five days long, that's all. Toyota, like so many other PR points did a crappy job of getting the word out, "hey, we're selling cars again." So they only lost part of February 1, 2010 due to the ban - otherwise they had the full sales month.

    The Toyota sales numbers are really bad, given how low the bar was they needed to jump over from last year.

    This is why even Chrysler, which truly has nothing of interest in their line up, was even able to eek out a tiny sales gain.

  • Report this Comment On March 02, 2010, at 8:39 PM, baldheadeddork wrote:

    @davidbark: Aside from the cliche about buying on rumor and selling on news, F was up almost 6% yesterday (it closed at a five-year high) and YTD it was up 24% at the close yesterday. I think those numbers had more to do with the selling today than anything else.

  • Report this Comment On March 02, 2010, at 8:52 PM, baldheadeddork wrote:

    @Milligram.

    _Great_ job on tracking down the trailing two year numbers on Toyota. I should have done this a while ago but I'm the newest entry on your list of admirers.

    About GM - my take on their numbers is that they're not retaining Pontiac and Saturn buyers.

  • Report this Comment On March 02, 2010, at 8:59 PM, TMFMarlowe wrote:

    Definitely not retaining Saturn buyers.

    John

  • Report this Comment On March 02, 2010, at 9:00 PM, Milligram46 wrote:

    @bladheadeddork

    I would have to agree. Look at the cars in those line ups

    If you wanted to buy

    Pontiac Solstice >>> GM's got nothing

    Pontiac G8 >>> GM's got nothing - NOTHING

    Pontiac Torrent >>> Chevrolet Equinox/GMC Terrain

    Pontiac G5 >>> Chevrolet Cobalt (seriously, someone wanted to buy a G5???)

    Pontiac Vibe >>> GM's got nothing

    Pontiac G3 >>> Chevrolet Aveo (who wanted a G3 exactly???)

    If you wanted to buy

    Saturn Aura >>> Chevrolet Malibu

    Saturn SKY >>> GM's got nothing

    Saturn Outlook >>> Chevrolet Traverse / GMC Acadia / Buick Enclave

    Saturn Astra >>> Well, I could say the Cobalt but really, GM's got nothing

    So the Pontiac/Saturn buyers have really been alienated. I would guess that Pontiac buyers are defecting to Ford, Saturn all over the place.

    Still, the stand alone four core units increase of 32% is impressive. The increases are mostly in high margin profit driving vehicles.

    The really good news for GM, Ford, Hyundai, and Kia in particular is they are driving in customers who have previously written off the brands, or are new to them. Quality is solid for all four - so the real question comes in 4 to 7 years, do they turn into repeat buyers in a new normal.

  • Report this Comment On March 02, 2010, at 9:05 PM, langco1 wrote:

    fords staggering debt erases any sales gains.even if ford was the only car maker it could still never repay its debts and in the end ford will fail.....

  • Report this Comment On March 02, 2010, at 9:30 PM, Milligram46 wrote:

    @TMFMarlowe - hey - did you see that the supplier for the Cobalt/G5 electric steering recall is JTEKT, who is 50% owned by Toyota, and working with Denso back in 2002, developed the electric steering unit in question. The same system is in the 2009 - 2010 Corolla. Also, a Japanese company, systems made in Japan.

    You have to know that the Corolla recall is only days away now.

  • Report this Comment On March 02, 2010, at 9:52 PM, ever8 wrote:

    Why... Why... Why Ford is 20cents down at closing and TM is 78 cents up?

  • Report this Comment On March 02, 2010, at 10:03 PM, baldheadeddork wrote:

    @milligram

    I don't think it's not having comparable cars a Chevy, Buick or GMC version. The six cars that were totally dropped on your list were all very low volume sellers. Car geeks (including Yr.Obt.Svt.) have always had an elitist disdain towards badge engineering, but maybe the people who bought new Pontiac's are not the lemmings we liked to imagine they were.

    If the remaining brands are up 32% is irrelevant in my book. That just means they did a little better than average last month in comparison to the worst month in decades.

    I think the total number is the one that really matters because, like you said about Toyota, if this is the new normal for GM they are going to be a much different company than they were two or three years ago, and probably not in a good way. Without Pontiac and Saturn they might be looking at an 18% market share as the new normal, which means they're still going to have excess capacity and too much overhead. (It also means we could have a real dog fight between GM, Ford and Toyota for the top spot.)

  • Report this Comment On March 02, 2010, at 10:05 PM, Milligram46 wrote:

    @ever8

    Buy on rumor, sell on news.

  • Report this Comment On March 02, 2010, at 10:11 PM, baldheadeddork wrote:

    @ever8 - I answered this a few posts up, but at the close Monday F was up 24% YTD, almost 6% for the day, and it closed at a five-year high. Ford is down 20 cents because some buyers wanted to take their profits.

    TM? I don't get it. The more I look at that stock and that company it reminds me of the people who were still propping up BAC and C in the $30 range in Q1/Q2-08 when it was clear to anyone paying attention that they were in massive trouble.

    If I had to speculate a guess, TM will remain in the low 70's until they have their next quarterly report. When people can see the real costs of this fiasco I think a lot of investors are going to stampede the exits.

  • Report this Comment On March 02, 2010, at 11:24 PM, Milligram46 wrote:

    @baldheadeddork

    I know this - if I had to replace my G8 GT today I would be hard pressed to find anything in the GM stable in the $30K to $35K price range that was a valid replacement that would make my heart go pitter thump.

    For that matter I really don't know ANY car in that price range that would be a valid replacement.

    Damn it - so close and yet sooooooooooooo far.

  • Report this Comment On March 03, 2010, at 6:35 AM, TMFMarlowe wrote:

    @Milligram46, I think your best bet would be to wait and take a look at the upcoming new Charger. Or hope that GM decides to sell the fleet-only Caprice to the public, I guess. Or buy a used last-gen CTS-V, which is probably what I'd do.

    John

  • Report this Comment On March 03, 2010, at 9:08 AM, Jazzenjohn1 wrote:

    Let go of your silly clingyness to GM Milli. Head towards the light and get a Taurus SHO.

    I'll get you a pin for X-plan ;)

  • Report this Comment On March 03, 2010, at 9:08 AM, Jazzenjohn1 wrote:

    Let go of your silly clingyness to GM Milli. Head towards the light and get a Taurus SHO.

    I'll get you a pin for X-plan ;) John

  • Report this Comment On March 03, 2010, at 9:16 AM, baldheadeddork wrote:

    Would you even have to go last gen on a CTS-V? You couldn't get new, but they've been out for a couple of years and 2009's should be pretty close to 35K by now.

    You could also get into a CPO M3 at that price. I'd also drive the Taurus SHO.

  • Report this Comment On March 03, 2010, at 12:39 PM, Milligram46 wrote:

    @Jazzenjohn1 - no SHO in my driveway. I've read the reviews. Soft suspension and brakes that self-destruct under track driving conditions. I track the G8 and all of the comparos to the 5-series / M5 (previous gen) are SPOT ON, for $20K less. The Taurus SHO just isn't up to that task on everything I read.

    I ADORE the Ford Fusion - I had the previous gen Ford Taurus (renamed Ford 500) as a rental, wrote a Foolish review about in Car & Drivers, rated it as the worst car I have ever driven. I hated it so much I swapped it out with an OK Hyundai Azera. I'm glad Ford made huge improvements, it needed it!

    The crazy thing is GM finally built a Pontiac to compete with BMW, and then killed the brand. If my G8 blew up today I would probably be looking at - getting a BMW. IRONY!

    Lets keep it on topic, not what is in my driveway - how about them Ford numbers!!!

  • Report this Comment On March 03, 2010, at 7:03 PM, baldheadeddork wrote:

    How would you like to see a Fusion with an EcoBoost four?

    Sorry, couldn't resist.

  • Report this Comment On March 03, 2010, at 11:59 PM, Milligram46 wrote:

    @BHD -- how about an EcoBoost SIX with AWD and a 6-speed auto. NOW we're talking....

  • Report this Comment On March 04, 2010, at 1:46 PM, baldheadeddork wrote:

    But then you're getting all the weight problems of the SHO. I think you'd lose a lot of the Fusion's crispness if you drop the SHO drivetrain into it. I think I'd rather have a strong four and FWD.

    I don't know if you saw this, but there is apparently a ton of untapped potential in the EcoBoost V6. Hennessey has put out an intake/exhaust/chip kit for the MKS and SHO that adds 70hp at the wheels.

    http://www.hennesseyperformancestore.com/maxboost435.html

    About Ford's numbers, I'm really glad to see support for the $12.50-12.70 range. If it holds, I think it will be a pretty big turning point in the recovery of this stock. Past big gains have been pushed back by profit taking, which is understandable, but I think the volatility has kept the grown ups from taking F seriously. When they do get on board, I think you're going to see a sustained rise in the share price. I don't think 18 is out of the question for this year.

  • Report this Comment On March 04, 2010, at 5:36 PM, PSU69 wrote:

    Got on the F Bus @ $4. Enjoying the ride so far. Thinking about jumping on TM if it goes under $70.

  • Report this Comment On March 09, 2010, at 10:37 AM, mudman90039 wrote:

    Well all this talk about numbers at the beginning never really mentioned the quality issues. Lower down here it's being mentioned. I grew up with Fords so take my comments from experience and opinionated. I bought a 2003 Focus before the "american" redesign. It was a fantastic car, it was designed in Europe and made for several years before importing here. It handled beautifully and was stylish. My best friend now has it and at 50K miles it doesn't squeek, rattle or breakdown. He had a couple Alfas before and said the Focus handles everybit as well. He reads all the European car magazines and watches Top Gear and they all love the reliability and handling.

    That same platform is going to be used for teh Escort and the V6 Fusion I drove was really powerful, so much so that I now have a 09 Focus for teh 4 cylinder. LA traffic is not where you want a 6 charging forward.

    People have their preferences, mine is for smaller cars that handle like sports cars. I've never been in a Japanese car that doesn't have soft springs and mushy handling trying to be like a big sedan of yore.

    Ford has spent the last downsized years retooling and improving their designs, they have a lot of patents and it shows.

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