Check out the latest Ford earnings call transcript.

Ford Motor Company (F 0.66%) said that its U.S. sales dropped 8.8% in December, adding to concerns that the U.S. new-vehicle market may be slowing after years of robust sales. For the full year, Ford's U.S. sales were down 3.5%.

Here's a look at what was working for Ford as 2018 drew to a close, what wasn't, and how things might shape up for the Blue Oval in its home market in 2019. 

A rancher is shown unloading a hay bale from a blue 2019 Ford F-350 XLT, a heavy-duty full-size pickup. Cattle are visible in the background.

Ford's U.S. sales were down in 2018, but average transaction prices -- and sales of the all-important F-Series pickups -- were up. That bodes well for earnings. Image source: Ford Motor Company. 

What worked for Ford in 2018 -- and what didn't

While overall sales were down, Ford still had quite a few things to brag about in its year-end sales presentation.

  • U.S. sales of Ford's F-Series pickups, its most important driver of profits, were up 1.4% in 2018 to 909,330 trucks sold. Better yet, F-Series transaction prices hit an all-time high as buyers continued to choose well-optioned models. And yes, the F-Series continued its streak as America's best-selling trucks, something that has been true for the last 42 years.
  • Ford's biggest SUVs had a great year, following the introduction of all-new (and much-improved) versions late in 2017. Sales of the Lincoln Navigator rose 69.5% to 17,839 sold, with average transaction prices far higher than the model it replaced. Sales of its sibling, the Ford Expedition, rose 5.4% to 54,661. But that doesn't capture the full story: Fleet sales of the Expedition were down, while (higher-profit) retail sales rose 35.4% from the year prior.
  • The most recent addition to Ford's U.S. lineup, the small EcoSport SUV, sold 54,348 units in its first year -- enough to push Ford's total U.S. SUV sales to an all-time record.
  • Because trucks and SUVs tend to sell at higher prices (with better margins) than sedans, the strong results for Ford's truck models helped push Ford's overall average transaction price to $38,400 in December, up $1,600 from a year ago and about $4,400 above the industry average. 
A 2019 Lincoln Navigator, a full-size truck-based luxury SUV.

The all-new-for-2018 Lincoln Navigator is a hit: Sales and average transaction prices surged in 2018. Image source: Ford Motor Company. 

But there were signs of trouble as well.

  • Ford's sedan sales were hit very hard in 2018. Sales of Ford's cars as a group were down 17.7% in 2018, with all models down year over year except the ultra-expensive GT sports car (126 sold in 2018, versus 89 in 2017) and the now-discontinued (and heavily discounted) subcompact Fiesta. 
  • Ford's product-overhaul strategy includes a renewed emphasis on performance vehicles, which the company has identified as a strength. But sales of its high-performance mainstay, the iconic Ford Mustang, fell 7.4% in 2018. (Meanwhile, sales of a key Mustang rival, Fiat Chrysler Automobiles' Dodge Challenger, rose 3% to an all-time high last year.)
  • As part of an ongoing effort to boost profit margins, Ford has been working to revamp the Lincoln luxury brand for several years now. Results in China have been pretty good, but the U.S. market was less receptive in 2018. Lincoln's U.S. sales fell 6.8% last year, with sales of all models except the Navigator down versus 2017. 
A dark-blue 2019 Ford Mustang Shelby GT 350, a high-performance coupe, on a racetrack.

Performance vehicles still sell (and are still quite profitable), but the current Ford Mustang may be running out of sales steam. U.S. sales fell 7.4% last year. An all-new Mustang is probably about 2 years away. Image source: Ford Motor Company. 

Can Ford turn things around in 2019?

To a large extent, Ford is at the mercy of the overall U.S. market: If consumer confidence drops, sales of new vehicles will fall. Sooner or later, that will happen, and it's likely that we're much closer to the end of the current economic expansion than we are to the beginning.  

A bar chart showing Ford's annual US sales dip in 2008-2009, rise steadily from there to a plateau in 2015-2016, and then fall slightly in 2017 and 2018.

Data source: Ford Motor Company. The chart shows Ford's annual U.S. sales for every year from 2007 through 2018. 

But looking beyond the economy, at least some of Ford's so-so 2018 U.S. sales result can be attributed to the timing of its product-replacement cycle. Remember that new vehicles are planned three to four years in advance: four years ago, all-new versions of the Focus and Fiesta for 2018 looked like pretty good bets. Those new models are in fact doing quite well in Europe, but Ford decided not to offer them in the U.S. -- leaving its U.S. showrooms with little in the way of new products in 2018. 

That will change over the next couple of years. The new midsize Ranger pickup will begin arriving at dealerships shortly, followed by all-new versions of the big-selling Explorer and Escape SUVs later this year. Two all-new off-road SUVs will arrive in 2020, along with a revamped version of the all-important F-150 pickup -- and more. 

How will all that play out? It's hard to know given the economic variables, but we can say this: New products almost always sell in higher numbers and at considerably better prices than products that are near the ends of their production runs. 

No matter what the economy does, Ford's sales (and margins) will almost certainly be better with more new products in its U.S. showrooms than they would have been without. For investors eyeing Ford's fat dividend but concerned about slumping sales and profits, that's unambiguous good news.