2014 was a good year for auto sales in the U.S. -- but you wouldn't know it from Ford's (NYSE:F) numbers.
Complete figures won't be in until next week, but analysts are expecting U.S. auto sales to be up about 6% for 2014 once all the numbers have been tallied. Some segments have done even better: Kelley Blue Book analyst Alec Gutierrez estimates that full-size pickup sales will be up almost 7% for the year.
But sales of Ford's market-leading F-Series will almost certainly be down for 2014, and the company's overall sales have been sluggish.
Ford says that there are two big reasons its sales have lagged the market this year -- and neither is a major reason for Ford shareholders to worry.
But do the Blue Oval's explanations add up? Let's take a look.
Ford's all-new F-150 has already cost it some sales
While Ford's F-Series did outsell each of its rivals, its sales fell while General Motors and Fiat Chrysler both gained ground.
Ford's F-Series is in its last model year before replacement, while GM's Chevy Silverado and GMC Sierra were all-new for 2014, and FCA's Ram was refreshed in 2013. That alone might be an explanation -- but Ford says that the problem is one of supply rather than demand.
Ford's all-new 2015 F-150 features aluminum body panels, an industry first. Those panels have shaved hundreds of pounds off the new pickups' weight, improving fuel economy and towing capacity. But Ford's two pickup factories required extensive changes to build the new trucks.
Those changes required a full 12 weeks of downtime at Ford's Dearborn Truck Plant, which began shipping the new trucks in November. Ford's Kansas City plant will be shut down for a similar length of time before it starts shipping 2015 F-150s in the spring.
Those long shutdowns will cost Ford 90,000 units of production once all is said and done, says Ford North America chief Joe Hinrichs. As a result, Ford says it has carefully managed its truck inventories by limiting discounts -- and that, it says, is why its truck sales lagged in 2014.
Ford has hinted that it's unlikely to be back up to full speed until the middle of 2015. That's when it will find out how the market is responding to its new F-150 -- but until then, Ford's pickup sales may continue to lag the overall market's growth.
A decline in rental-car sales has also trimmed Ford's totals
Ford also says that a planned cutback in sales to rental-car companies has cost it some sales in 2014. Through November, sales to rental-car companies accounted for 9% of its U.S. sales this year, according to Ford sales analyst Erich Merkle, versus 11% last year. The difference is about 47,000 vehicles sold, give or take.
Why would Ford cut back rental-car sales? There are two big reasons. First, rental-car sales tend to be deeply discounted. At a time when several of Ford's factories are working at full speed, Ford would rather sell those cars at retail, with fewer discounts.
Second, Ford is trying to improve the residual values of its vehicles. The residual value is what a car is worth when it comes off-lease after two or three years. Higher residual values would mean that Ford could offer better leasing deals -- and one way to to improve residual values is to limit the supply of the used models dumped onto the market by rental-car companies.
But is that really all that's going on?
Is there more to the story than Ford is letting on?
Let's look at the numbers.
Through November, Ford has sold 2,260,271 vehicles in the U.S. this year (including sales of the Lincoln brand). That's down 0.7% from the same period last year.
As noted above, the decline in rental-car sales amounts to about 47,000 fewer vehicles sold to rental fleets this year versus last year. Add those back in, and Ford's sales through the first 11 months of 2014 would be up about 1.4%.
Now add 90,000 F-150s to the total -- the amount that Ford says it's losing because of those factory changeovers -- and Ford's 2014 sales through November would be up 5.3%, That's right in line with the 5.4% increase posted by the overall U.S. market over the same time period.
So, do Ford's stories add up? Yes -- more or less.
The upshot: Ford's sales should rebound as 2015 unfolds
There may be a little more to the story than Ford is admitting. After all, some of those 90,000 lost pickup sales won't be "lost" until the first quarter of next year.
And Ford has fallen a bit behind in some key market segments, including the white-hot compact crossover SUV category. Sales of Ford's Escape are up just 3.3% this year, while rivals like Toyota's RAV4 (up 24%) and Nissan's Rogue (up 25%) have surged.
But for the most part, Ford's explanations for its 2014 sales struggles do add up. That gives us some reason to be optimistic about the Blue Oval's chances as 2015 unfolds.
John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.