It was difficult for many Ford Motor Company (F 2.33%) investors to remain patient while sales slowed through the first six or seven months of 2015, mainly due to a plethora of new or refreshed vehicles slowly building up to full production and inventory levels. Finally, August appears to be the breakout month for Ford's sales that investors have been waiting for, and there are quite a few positive figures to digest. Here are three major takeaways to consider when glancing through the data.
By the numbers
The first takeaway is that Ford had a strong month, with sales growing 5.4% in August compared to last year, which was above expectations of a 0.2% drop. Furthermore, Ford outpaced fellow Detroit automaker General Motors, which posted a 0.7% decline. Ford even topped Fiat Chrysler Automobiles' 1.7% year-over-year gain in August, which is impressive considering FCA had been absolutely on fire in terms of sales growth over the last year.
Ford's 5.4% increase is even better when you consider that the entire industry is expected to post a rare decline in year-over-year sales for August, since last year's Labor Day weekend sales were counted in August but this year's holiday sales will be counted in September. In addition, last month also had one fewer selling day than last year's August. All in all, it was a tough month for sales comparisons, and when all the data is official, Ford is likely to have recorded the best August sales gains in the U.S. out of all major automakers.
Beyond just the total sales data, there are some really interesting details regarding Ford's SUVs.
Americans love SUVs
Ford's newest SUVs, the Edge and Explorer, both posted excellent August sales figures. The Edge posted a significant 36% sales gain over last year's August to reach nearly 12,000 units. The story is similar for Ford's Explorer, which sold over 21,600 units in August, good for a 22% gain over last year. The Edge and Explorer were being sold left and right, remaining on dealership lots for only 20 days and 16 days, respectively.
Ford's Edge, Explorer, and Escape helped drive the company's utility/SUV segment up 12% in August compared to last year. Ford's utility segment sold more than 69,000 units last month, which was the automaker's best August sales performance for the Ford brand SUV lineup in 12 years.
While technically the next vehicles aren't SUVs, their performance is worth noting. Ford's van sales posted a staggering 70% increase to more than 18,000 units sold in August, compared to last year. The sales increase was driven primarily by the all-new Transit, and it marked Ford's best August van performance since 1994. While vans remain an overlooked part of Ford's business, it's a very profitable segment that will continue to pay off for the folks at the Blue Oval.
Perhaps the best news out of Ford's August sales figures came from its bread-and-butter product, the F-Series.
Hauling big bucks
Ford's F-Series delivered its best sales result for August since 2006, topping more than 71,000 units sold. That's a 5% gain over a strong August performance last year, and that amount of units sold per month has only happened a handful of times over the past decade. Furthermore, while total F-Series sales were up 5%, retail sales of the F-Series were up 15%, which suggests consumer demand is very strong for America's best-selling truck.
Another interesting tidbit from the F-Series is that the EcoBoost engine option represented 63% of F-150 retail sales in August. That was an 86% increase compared to a year ago, which is great news for investors because Ford can charge a premium for the EcoBoost option compared to the V6 engine.
Lastly, investors should remain very optimistic that the 2015 F-150 will improve Ford's financial performance through the back half of 2015. Consider that pickups accounted for about 13% of industry sales in August, compared to only 11.3% last year. As gas prices remain cheap, and credit remains easily available, trucks will continue to sell well. On top of that, Ford still only has about 90,000 units of F-150 inventory, which is a far cry from last year's 173,000 -- though that number is a bit inflated, as Ford was stockpiling for the upcoming F-150 assembly plant shutdown/changeover.
Ultimately, August looks like the breakout month for Ford sales that investors have been patiently waiting for throughout 2015. The grand takeaway is that the rest of 2015 should be very pleasant for Ford shareholders.