Is Ford (NYSE:F) about to surprise us with a big jump in truck sales?
Ford had a rough year on the pickup-truck front in 2014. While supplies of its F-Series were constrained due to the long shutdowns needed to convert its factories to the all-new 2015 model, the truck market was booming -- and General Motors and Fiat Chrysler took full advantage. The result: a long string of low monthly sales gains for Ford -- and even some declines -- while rivals gained ground.
That may be about to change. But if it does, it won't really be a surprise.
Ford's CEO hints that a happy surprise is coming
It won't be a surprise because Ford CEO Mark Fields dropped a hint that January could be a big month for Ford pickup sales.
Speaking during Thursday's earnings call for analysts and media, Fields said, "We are seeing very strong demand for the F-150. It's our fastest turning vehicle on the lot. And actually, as we look at this month, we have a few more days to close out, if we track as we expected, we could have our best January since 2004 [for sales of the F-Series]."
In recent times at least, January has been a slow month for pickup sales, with Ford's monthly number coming in well below its 12-month average. In that context, Ford posted a pretty impressive number back in January 2005, as you can see from this chart:
Ford sold 61,979 F-Series pickups in January 2004. It hasn't come close to hitting that number in any January since. In fact, the closest it has come was in 2006, when it sold 51,771 of the F-Series.
If Fields' prediction holds, that means that Ford will have sold at least 51,772 pickups (one more than it sold in January 2006) once the totals for January 2015 are added up. Even that number would represent an 11% year-over-year increase in F-Series sales, a gain that would be a welcome sight for Ford investors.
These gains aren't all for the new F-150, though
Even if Ford does post a big year-over-year sales gain for the F-Series in January, it's important to remember that that isn't enough to conclusively declare the all-new F-150 a hit -- at least, not yet.
That's because Ford's dealers are still selling a mix of 2014 and 2015 models, and it's the 2015 that is all-new and different. Ford is still ramping up production of its all-new aluminum-bodied truck, and doesn't expect to have full supplies of the 2015 models until late spring. Most dealers still have sizable inventories of 2014 models, and will be selling those down until shipments of the 2015 are up to full speed.
But Fields did say that we should see a "material increase" in the percentage of 2015s in the overall sales mix in January. He said that the new truck is "turning" very quickly -- in other words, the 2015 F-150s are selling shortly after they arrive on dealers' lots. And he also said that "the mix has been rich," meaning that dealers are selling a lot of trucks with higher trim levels, which means more profits per sale for Ford.
An important -- and good -- sign for Ford's profits
This is a big deal for Ford investors. While the company is doing a great job of setting up its overseas operations for long-term growth, it's still very dependent on results in North America. And the F-Series is its best-selling and most profitable product here, by far.
This will change in time, but right now it's still fair to say that as F-Series sales go, so go Ford's profits. F-Series sales in 2014 were sluggish because of constrained supplies, and Ford's profits were low by recent standards.
Fields and other Ford executives have promised that that will change in a big way in 2015. If his prediction for January F-Series sales holds, Ford's year could be off to a great start.