General Motors (NYSE:GM) took quite a mighty swing at crosstown rival Ford Motor Company (NYSE:F) with its latest round of advertising. The campaign challenged the idea of Ford's F-150 being "Built Ford Tough" by dropping concrete landscaping blocks into the beds of both an F-150 and a Chevy Silverado, resulting in holes poked into Ford's truck bed. Here's the thing: Truck sales are highly profitable and just as highly competitive, and if the advertising campaign convinced consumers to steer away from Ford's F-Series lineup, it would have been a big issue for the folks at the Blue Oval.
Fortunately, looking at some recent numbers, it appears demand for the F-Series is just as strong as ever.
The numbers are telling
A few numbers are worth considering when trying to figure out if the advertising campaign was successful for GM or not. Looking at market share, Ford's F-Series actually posted its strongest month of the year in June, at 38.1% -- despite GM's ad campaign starting in early June. In fact, each of the last three months, the F-Series has improved its segment market share -- starting from 36.5% during April and moving to 37.5% in May. Meanwhile, GM's Chevrolet Silverado has hovered around 26% during the first half of 2016. At its low point, during March, the Silverado owned 24% of the market, in May it held 25.1% of the market, and that moved higher to 26.7% during June. So, while the Silverado has gained some share, a fact some may tout, it hasn't come at the expense of the F-Series.
What's also interesting is that Ford was able to increase F-Series market share at a time when the company offered fewer incentives and discounts than GM. According to Autodata, June incentive spending for the Silverado jumped to $5,110, which was roughly $1,220 more than the F-Series was offering.
Perhaps more telling than market share are the sales totals. During June the Silverado's sales dropped 3.7% compared to last year, to 49,662 units in the U.S. market; they remain relatively flat, with year-to-date sales down 0.8% to 273,652 units. On the flip side, sales of the F-Series soared 28.6% during June to nearly 71,000 units, and are up almost 11% for the year to more than 395,000 units, compared to the first half of 2015.
Will Ford respond?
While most automakers don't run advertisements that call out rivals so specifically, GM has some history of running ads against Ford's trucks. Ford has yet to counter GM's ads with a bashing campaign of its own, but it's easy to take the high road when market share, sales, and pricing all seem to favor Ford.
"We're the clear market leader," said Ford spokesman Mark LaNeve on a conference call. "They're going to try things. They tried this, and the numbers speak for themselves."
This is all good news for Ford investors, because the GM advertising campaign was compelling. However, not only did GM’s ads from a year ago -- remember the bear chasing consumers into a steel or aluminum cage? -- fail to dent Ford’s market share, but GM’s recent jab also failed to hinder sales during its first month. It’s clear these ads aren’t having the impact GM hoped, which is good news for Ford investors, as the F-Series is the company’s most popular and profitable product.
Daniel Miller owns shares of Ford and General Motors. The Motley Fool owns shares of and recommends Ford. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.