It's not much of a surprise, but for Ford
Speaking earlier this week, Ford sales analyst George Pipas called it one of the company's "best years ever." Hyperbole around sales results is a time-honored Detroit tradition, but for once, the hype might be justified.
The key milestones
There was plenty for Ford to cheer about in 2010. Consider:
- Sales up 19%. The economic recovery certainly had something to do with that growth, with overall U.S. vehicle sales up 11% over 2009. However, not only was Ford's growth well above the average -- among the major automakers, only Nissan (18%) and Hyundai (24%) came close to Ford's sales growth rate in the U.S. -- but it also followed a pretty good 2009 as well.
- Sales up across the model range. Ford's F-Series trucks continue to be the company's (and the nation's) best-seller, the only vehicle to sell more than half a million copies in the U.S. last year. But Ford also sold more than 200,000 of its midsize Fusion sedan, a gain of 21% and the best result for a Ford car since 2004. Sales of the big Taurus sedan were up 51%.
Market share gains. For the full year, Ford's U.S. market share was 16.4%, up a point from 2009 and more than two points from 2008. The company said this was its first back-to-back increase in market share since 1993, and returns Ford to a solid second place in the U.S., behind General Motors
but well ahead of Toyota (NYSE: GM) and Honda (NYSE: TM) . (NYSE: HMC)
Global gains as well. Ford sold almost 84,000 vehicles in India, well short of the 567,000 sold by local favorite Tata Motors
but nearly triple its 2009 results. The company hasn't released year-end numbers for China yet, but sales were up a solid 39% through October, a few points ahead of the market's overall growth, and Ford added 100 new dealers in the country during 2010. Ford also led the Canadian market for the first time in more than 50 years. (NYSE: TTM)
It wasn't all good news, of course. While Ford has now officially wound down its Mercury brand, it did declare its commitment to its venerable Lincoln luxury brand in 2010. Certainly Lincoln needs help, as sales were up a mere 3.6% year over year. And sales of the much-hyped Fiesta subcompact were subdued, though the car has been strong in markets that aren't traditionally strong for Ford, such as Los Angeles.
But all in all, Ford's year-end totals were good news, and the company's fourth-quarter and year-end financial results -- due in a few weeks -- should look solid.
So what's ahead?
Ford said it expects the U.S. economy to expand 3% to 4% in 2011, and for total U.S. vehicle sales to land between 12.5 million and 13.5 million -- a sizable jump from the roughly 11.5 million sold in 2010, but still well short of the pre-recession trend (more than 16 million were sold in 2007).
Can Ford capture more market share in the U.S. in 2011? It's possible. The company has several important new models coming to market -- the all-new Explorer and just-refreshed F-Series trucks began shipping in December, and a completely new Focus compact will start to arrive at dealers before spring. The Explorer and Focus both represent significant improvements over the vehicles they replace and should sell well, driving further sales growth.
But as I pointed out the other day, Ford's edge (so to speak) over its key rivals may shrink in coming months, which may make market share gains harder to come by. Ford's biggest strength has obviously been its product -- and its ability to maintain its investments in product development through the worst of the economic downturn. But GM and Toyota are catching up: Toyota has promised 10 new or significantly updated products in 2011, and post-IPO GM is expected to make aggressive product-development investments as well. And Hyundai is rapidly becoming a force to contend with in the U.S. and elsewhere.
Still, Ford shareholders should be encouraged. Ford's relatively small global vehicle lineup means greater efficiencies, and that means per-car profits will increase as sales increase. As long as the world's economies continue to improve, and as long as Ford stays focused (so to speak), the company's gains should continue.
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