For the past few years, Ford Motor Company (NYSE:F) has been revamping its model lineup in North America. The iconic automaker has discontinued virtually all of its sedans and hatchbacks. Meanwhile, it has doubled down on crossovers, SUVs, and trucks, bringing a slew of new entries and updated versions of existing models.

This transformation holds plenty of long-term promise. However, it is causing some pain for Ford in the near term. Pandemic-related production disruptions exacerbated the challenges. As a result, Ford reported a 10% drop in U.S. deliveries for the final quarter of 2020.

A white or silver Ford Ranger parked on a rocky outcropping.

Image source: Ford Motor Company.

Solid results for crossovers and SUVs

Some aspects of Ford's fourth-quarter domestic sales performance were quite respectable. Deliveries of crossovers and SUVs rose 4% year over year, as an 8% increase in retail deliveries more than offset lower fleet sales. The Ford Explorer was the strongest performer, with deliveries in the U.S. up 29% year over year to 66,008. While Ford was facing an easy year-over-year comparison for the Explorer due to production problems a year ago, the Q4 delivery total for the Explorer was also up 2% compared to the fourth quarter of 2018.

Higher crossover and SUV sales didn't fully offset the decline in Ford's car sales last quarter. However, the new SUV models that could help revive Ford's fortunes weren't widely available yet. The company delivered 5,120 Bronco Sport SUVs in the U.S. during Q4, nearly all in December. It delivered just three Mustang Mach-E electric SUVs. That model is just starting to reach dealer's lots. Finally, the highly anticipated Ford Bronco won't become available until this summer.

As Bronco Sport and Mustang Mach-E inventories build in the months ahead, sales will quickly follow. The Bronco also looks like a sure hit, as hundreds of thousands of fans have already put in reservations.

Trucks were the problem

The main cause of Ford's steep sales decline last quarter was a shortage of F-150s. Ford has introduced an all-new version of the popular full-size pickup for the 2021 model year. That entailed long stretches of factory downtime last fall and a slow return to normal production rates. Furthermore, pandemic-related production stoppages in the spring prevented the No. 2. U.S. automaker from building up as much inventory earlier in the year as planned.

Total F-Series deliveries fell 15% year over year in Q4 despite strong sales of the Super Duty models, which didn't get a major update for the 2021 model year. F-Series trucks accounted for 39% of Ford's U.S. deliveries in the fourth quarter of 2019, so any weakness there has a big impact on the company's overall results.

More troublingly, sales of the Ford Ranger midsize pickup fell 18% year over year in Q4, despite plenty of inventory and production capacity. 

Bumps are to be expected

Ford's Q4 domestic sales performance is a far cry from the impressive 5% gain General Motors reported last week. The Blue Oval's fourth-quarter earnings results will also be terrible compared to the strong profit GM is likely to report.

This shouldn't be cause for alarm, though. Major model changeovers always lead to temporary production constraints. It always takes a few quarters for sales of a new model to really take off. The early signs suggest that the Bronco, Bronco Sport, and Mustang Mach-E will all sell well. Demand for the new F-150 is extremely strong, too.

Growing sales momentum for these models should make 2021 a bounce-back year for Ford, especially since it will face easy year-over-year comparisons. With all of these key models in mass production by the end of this year, Ford could be firing on all cylinders in 2022.

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