Ford's Sales Slumped Again as Product Makeover Continues

Ford Motor Company (F +0.34%) said that its U.S. sales fell 1.3% in the fourth quarter, as strong sales of trucks weren't quite enough to overcome declines in Ford's SUV and sedan sales.

For the full year, Ford's U.S. sales were down 3%. That trailed the overall market's performance: U.S. light-vehicle sales fell about 1% in 2019, according to Automotive News. 

Sales of the Ford Transit commercial van were up almost 12% in 2019. Image source: Ford Motor Company.

Highs and lows of Ford's 2019 sales report

The high points:

• Sales of Ford's most important product line, the F-Series full-size pickups, rose 1.6% in the fourth quarter. F-Series sales were down 1.4% for the year as the Fords lost ground to fresh products from General Motors and Fiat Chrysler Automobiles, but Ford managed to retain the pickup-truck sales crown for the 43rd year in a row. An all-new F-150 is expected to launch later this year. 
• Sales of Ford's Transit and Transit Connect vans were up sharply in the third quarter, 17.7% and 17.3% respectively, and for the full year (11.7% and 30.3%, respectively). This is a bigger deal than you might think: Commercial-fleet sales are an important strength and source of profits for Ford around the world, and CEO Jim Hackett has made the category a priority for future investments. These results show that the market is responding well. 
• Ford sold 89,571 midsize Ranger pickups in the U.S. in 2019. That's good but not great -- in line with expectations, but trailing key rivals like the Toyota Tacoma and Chevrolet Colorado. But it's solidly ahead of the 70,832 Rangers that Ford sold in 2011, the model's last full year in the U.S. market. 
• Ford Explorer sales were down 14.6% in the fourth quarter from the year-ago period. But that's still a high point, as the roughly 48,000 sold was well ahead of the 31,546 it delivered in the third quarter, when the company was working hard to overcome early manufacturing problems with the all-new 2020 model. There's still room to improve, but things are getting better: Ford said that December was the new Explorer's best month for retail sales since its June launch. 
• Two years after a new and much-improved Ford Expedition began arriving at U.S. dealers, buyers are still flocking to the big (and hugely profitable) Ford. Sales of the Expedition rose 71.6% in the fourth quarter (to 24,267) and were up 58% for the full year. 
• Sales at the Lincoln luxury brand, another key source of profits for Ford, rose 17.8% in the fourth quarter and 8.3% for the full year. The results were driven by strong demand for the new Aviator and Corsair crossovers, as well as continued success for the Expedition's luxury sibling, the Lincoln Navigator. 
• ALG, a TrueCar subsidiary that tracks leasing and sales information in the U.S. market, estimates that Ford's average transaction price (ATP) rose to a healthy $41,054 in December, with incentives at 11.4% of ATP -- both solid numbers, and both improved from November.

Ford's Expedition continued to sell well in the fourth quarter. Image source: Ford Motor Company.

The low points:

• Ford's decision to discontinue most of its sedan and hatchback models in the U.S. will probably yield bottom-line improvements over time, but cost it a lot of sales in 2019. Sales of the compact Focus fell 89%, or more than 100,000 units, in 2019, and the big Taurus sedan's 65% year-over-year decline accounted for almost 20,000 more lost sales. Only the tiny Fiesta managed a year-over-year increase, as Ford offered deep discounts to clear out dealer inventories. 
• Sales of the compact Ford Escape SUV fell 23.5% in the fourth quarter and were down 11.3% for the year. That's not entirely unexpected -- Ford was in the midst of launching an all-new Escape when the quarter began -- but it's something to watch as we move into 2020. The Escape is a critical model for Ford, in a hot -- and fiercely contested -- market segment. 

The takeaway for Ford investors

Did Ford do enough in the fourth quarter to deliver on its reduced full-year guidance? At least in the U.S., I think it did: If ALG's estimates are correct, Ford's incentive spending may not have risen as much as the company expected when it adjusted its guidance in October, and sales of its profitable pickups and vans remained strong. We'll know more when Ford reports its fourth-quarter and full-year results in a few weeks.

The raw numbers

Here's how Ford's fourth-quarter and full-year U.S. sales results stack up against those from its five largest rivals.

Data sources: The automakers.