Ford Motor Company (F -0.04%) said last week that its U.S. sales fell 4.1% in the second quarter. While sales of Ford's truck models remained strong, weaker sales of cars -- and an overhaul of a factory making a key SUV model -- more than offset the gains.
Through the end of June, Ford's U.S. sales are down 2.9% in 2019. But there's a good chance that Ford's sales could pick up (so to speak) in the second half of the year.
Ford's pickups sold well in the second quarter, but sales of SUVs and cars slipped. Image source: Ford Motor Company.
How Ford fared against rivals
Here are the second-quarter sales results for the six largest-selling automakers in the U.S. market. Overall, U.S. light-vehicle sales fell 1.7% in the second quarter, according to figures from Automotive News, meaning that Ford's 4.1% decline lagged the market's result.
| Automaker | Q2 2019 U.S. Sales | Change vs. Q2 2018 |
|---|---|---|
| General Motors | 746,659 | (1.5%) |
| Ford | 650,336 | (4.1%) |
| Toyota Motor | 608,392 | (1.4%) |
| Fiat Chrysler Automobiles | 597,685 | (0.5%) |
| Honda Motor | 407,208 | (4.3%) |
| Nissan Motor | 351,185 | (3.7%) |
Data sources: The automakers, Automotive News.
Why Explorer sales tanked in the second quarter
One of the most glaring numbers in Ford's second-quarter U.S. sales report is this one: Sales of the Explorer SUV fell 37.6%, or 21,300 units, from the second quarter of 2018. What happened?
What happened is that Ford's Chicago Assembly Plant, which builds the Explorer, was shut down for several weeks in the quarter as Ford retooled the assembly line to build the all-new 2020 Explorer and its new upscale sibling, the Lincoln Aviator. Dealers were selling down their remaining stocks of the outgoing model; as those stocks fell, so did sales.
Ford said that the first examples of the all-new Explorer (and Aviator) arrived at dealers in June. As dealer inventories of the new model grow, Explorer sales should recover -- and with luck, increase -- as the year goes on.
Ford began shipping the all-new 2020 Explorer just before the end of the second quarter. Explorer sales should rebound as dealer inventories rise. Image source: Ford Motor Company.
By the way, that drop in Explorer sales entirely explains the 9.1% year-over-year decline in overall sales of Ford-brand SUVs in the second quarter. If Explorer sales had stayed flat year over year, overall sales of Ford SUVs would have been up slightly in the second quarter.
Truck sales rose, but there are reasons to worry
Ford's overall sales of trucks, including pickups, commercial vans, and heavy trucks, rose 7.5% in the second quarter from a year ago. That has to be good news, right?
The answer is a little more complicated. On the one hand, sales of Ford's Transit line of commercial vans rose nicely from a year ago, with the revamped Transit Connect up almost 24%. And overall sales of Ford's pickups were up 7% from a year ago.
But there's an asterisk on that second number, and it's an important one: Those numbers include the midsize Ford Ranger pickup, which wasn't yet available a year ago. Sales of Ford's F-Series -- its most important profit driver -- fell 1.3% from the second quarter of 2018.
Sales declines are never good news, but this one is worth some extra worry, because the second quarter of 2018 was a weak comparison. A fire at a supplier's factory in May 2018 cost Ford about a week's production of its full-size pickups, hurting its overall sales for the year-ago quarter.
Long story short: It was a weak comp for the F-Series, and Ford didn't beat it. That's cause for concern.
Ford's remaining car models are mostly doing well
Overall sales of Ford-brand cars fell almost 22% in the second quarter from a year ago, as dealer supplies of the now-discontinued Focus (down 95%) and Taurus (down 70%) ran short. The good news is that supplies of the Fiesta and Fusion were still plentiful, and sales of both were up year over year -- 70% and 25%, respectively.
Sales of the Mustang, which isn't going away, fell 7% to 21,625 in the second quarter.
Lincoln remains a mixed bag
Lincoln's story mirrors that of the Ford brand: Car sales slipped, but SUV sales were better.
Sales of Lincoln's two sedan models, the MKZ and Continental, dropped a combined 16.6% from a year ago. Sales of Lincoln SUVs fell 3.1% -- but that number includes a 19% drop for the compact MKC, which is about to be replaced by the all-new Corsair. It also doesn't include any sales of the all-new Aviator, which will begin to show up in third-quarter results.
As for Lincoln's most profitable product, the big Navigator SUV, sales were down 3.1% from a strong year-ago result.
Long story short: Ford is hanging in there
Ford shareholders know that the company is in the midst of a major product-line overhaul. Most sedan models have been discontinued (or soon will be), and there are lots of new SUVs and trucks on the way. In the long run, sales and profits should both improve -- but right now, with the Focus gone, the Explorer coming out of a product changeover, and the Escape and MKC about to begin their own transitions to all-new models, things are a bit tough.
The good news for shareholders is that Ford is hanging in there: Transaction prices remain strong, sales of key models are still solid, and lots of new products are on the way.
