The all-new 2017 Ford Super Duty pickups have just begun shipping to dealers. Overall F-Series sales fell 6% last month. Image source: Ford Motor Company.

Ford Motor Company (NYSE:F) said its U.S. sales fell 8% in August, as a big year-over-year drop in sales to rental-car fleets exacerbated the effects of an industrywide sales slowdown.

Why Ford's U.S. sales fell sharply last month

Ford sales chief Mark LaNeve emphasized during a conference call on Thursday that despite the drop, this was still a strong month overall for Ford. Combined Ford and Lincoln sales were up 1% at retail, likely ahead of the overall retail market's result.

But at first glance, some of the numbers were tough. Sales of Ford-brand cars as a group were down 26.5%, as buyers continue to migrate away from sedans to SUVs, but Ford-brand SUV sales were also down almost 2%. Worse, sales of the all-important F-Series line of full-size pickups were off 6% year over year.

What happened?

LaNeve pointed to several different factors. First, sales of the compact Escape fell 3% on that drop in fleet deliveries; at retail, it was up 8%. The larger Edge (down 5.3%) and Explorer (down a surprising 15.5%) suffered from difficult year-over-year comparisons, he said -- both were featured in a very successful sales event last August.

LaNeve said the story was similar with the F-Series pickups. August 2015 was the first month in which Ford had full supplies of the then-new F-150, and the first month in which it had "normal" (that is to say, generous) incentives on its best-selling truck. That led to a big spike in sales, and while last month's results were still very strong with almost 67,000 F-Series sold, they fell short of the 71,000-plus sold a year ago.

That's obviously spin, of course. But there's some promising data to back up LaNeve's point of view, namely that Ford's average transaction prices were very strong and its incentives weren't up sharply. Overall transaction prices were up about $1,200 from a year ago, while Ford's incentives were roughly flat from July levels -- and still lower than overall incentives at its two main pickup competitors, General Motors (NYSE: GM) and Fiat Chrysler Automobiles (NYSE: FCAU)

Sales of the new Lincoln MKX, an upscale sibling of the new-last-year Ford Edge, were up 50% in August. Image source: Ford Motor Company.

There was one other bit of good news: Sales at the premium Lincoln brand were up 7% on strong results for its new MKX crossover and revamped MKZ sedan. LaNeve said that the much-anticipated new Lincoln Continental sedan just began shipping to dealers.

About that drop in rental-fleet deliveries

Ford doesn't give exact totals for its fleet sales, but it did say that rental-fleet sales were about 4% of its overall U.S. sales in August, down from about 6% a year ago. That translates into a drop of around 5,500 vehicles, or a little over a quarter of Ford's total year-over-year decline. 

Ford's sales to rental-car fleets were down year over year in August not because the company is trying to reduce them, but because the timing of this year's deliveries to Ford's fleet customers is different. Ford's rental-fleet deliveries jumped sharply earlier in the year; for the full year, they're expected to be roughly in line with 2015's total. That means some months in 2016 will be sharply lower year over year; August was one.

The outlook: Ford expects choppy waters ahead

Looking ahead, Ford expects the recent pattern of up-and-down months to continue. The company feels that the U.S. market has plateaued, that year-over-year sales results will be up and down for a while, and that sales next year, while strong, will likely be lower than the still-very-good total expected for 2016.

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