It's hard to imagine, but the automotive industry hasn't always been in love with Black Friday and holiday-fueled car deals. However, the industry has recently welcomed the opportunity with open arms, and a once-slow time period for new-car sales has turned into a sales bonanza, helping automakers end the year with a bang.
However, Ford (NYSE:F) investors were not invited to the sales party this holiday season: Fiat Chrysler Automobiles, General Motors, and Toyota Motors all posted double-digit year-over-year sales gains, while the Blue Oval barely managed a 1% increase.
However, investors knew 2014 would be a building year for Ford, and there were some bright spots in its December sales numbers.
Everybody loves a record breaker
Throughout 2014 I notedthat Ford's Escape and Fusion had an opportunity to do something special: Break 300,000 sales in the U.S. for the full year, which only the automaker's F-Series had done since 2004.
The Escape had its best-ever December sales performance, which enabled the model to achieve its record in annual sales of 306,212. Not to be left behind, Ford's Fusion narrowly topped the Escape's sales mark and reached 306,860, also a full-year sales record for the mid-size sedan.
Even better for Ford, the Escape's sales mix remains rich, with its premium titanium trim accounting for roughly one-third of overall sales. The difference is significant: The 2014 Escape MSRP hovered around $27,840, according to Edmunds.com, while titanium trim added $5,000 to $10,000, depending on options.
The Fusion and Escape breaking sales records is a big deal because it shows Ford continues to design vehicles that mainstream consumers will drive off dealer lots in droves. That bodes well, as 2014 was full of new vehicle launches, setting up a surge in Ford's sales by mid-2015.
It's not all in the numbers
Most of us have heard by now that the slowing sales of Ford's F-Series trucks -- America's best-selling overall vehicle and full-size truck for 33 and 38 consecutive years, respectively -- is due to the changeover to the highly anticipated 2015 aluminum-bodied F-150. With Ford's delicate balance of F-Series inventory, as well as plant changeover that cost the automaker 90,000 units, sales have slowed, dropping 0.3% in December, and 1.3% for full-year 2014, compared to the previous year.
However, December was still a very strong month for F-Series sales -- just look at the uptick in monthly sales in the chart below.
It's also worth noting that tight F-Series supply and continued strong demand have enabled Ford to sell its trucks with the least incentives among major competitors. That makes each sale much more profitable, largely outweighing the slight sales decline.
The Ford Edge utility vehicle offers another example of the numbers not telling the entire story. Over the previous four years sales of Ford's Edge averaged 124,354 units, but it's total sales in 2014 checked in at 108,864. That 16% decline in sales, compared to 2013, had some investors raising a red flag as SUV's and crossovers sold extremely well last year in the U.S. market. However, supply problems early in the year put the model's sales in a hole, and that forced Ford to focus on more profitable retail sales with its remaining inventory. That, in turn, sent its fleet sales down significantly -- falling 93% in December alone. As Ford continues to adjust its vehicle production, expect a sales decline from situations like the Edge's to be few and far between in 2015.
What it all means
Ford in 2014 sold 2.4 million vehicles in the U.S., essentially flat versus the previous year. But with a host of new vehicle launches complicating production and inventory supply, in addition to a planned 15% reduction in daily rental sales, lackluster overall sales growth was expected.
There are still many positives, such as the 2015 Mustang and F-150 driving new foot traffic to dealerships, and Lincoln's all-new MKC sending the luxury brand's sales to heights not seen in six years. With 2014 officially in the books, I expect sales to start picking up momentum in year-over-year comparisons toward the end of the first quarter to mid-2015.
While Ford was left out of this year's December sales party, this won't be a long-term trend. As usual, there's more to the story than just the numbers.
Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. 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.