"It was good from beginning to end -- one of those really special, strong months."
-- Mark LaNeve, Ford head of U.S. marketing, sales and service, according to Automotive News
That sums up Ford Motor Company's (NYSE:F) September sales performance pretty accurately. Not only were analysts expecting double-digit sales increases for September compared to last year -- due to Labor Day sales being counted in September rather than in August -- but Ford continued to have a very strong month after the holiday sales promotions ended. Let's dig into the strong numbers to find two key takeaways for investors to digest.
First up: Details
It's always important to look at the details to understand where the sales increase is coming from. Ford's total U.S. sales jumped 23% for September to 221,599 units, compared to last year. However, it wasn't an increase in fleet sales -- some of which are less profitable sales -- that caused the increase; rather it was an identical 23% increase in retail results boosting the total sales figure. During September, Ford's fleet sales were 24% of total sales, less than the automaker's year-to-date figure of 28%.
While all of the industry sales data isn't available at the time of this writing, Ford's 23.3% gain was far ahead of GM's, FCA's, Toyota's, and Nissan's respective increases of 12.5%, 13.6%, 16.2%, and 18.3%. Furthermore, Ford's strong sales performance wasn't the only highlight from the data released today.
Ford's bread-and-butter product, the F-Series full-size truck, made progress on multiple fronts during September. F-Series sales continue to rise, reaching nearly 70,000 in September for a 16% increase compared to last year. Furthermore, retail sales of the F-Series increased a very healthy 28%. Overall, this was the F-Series' best September sales month since 2006.
Ford has been slowly but surely accelerating F-Series production to fill dealership inventory and is finally catching up on fleet sales. On the conference call, Ford noted that F-150 inventory ended September with roughly 100,000 units, which was a gain of about 8,000 units despite the strong sell-through of F-150 trucks. As Ford continues to approach roughly 120,000 units in inventory, expect it to increase sales to fleet customers, which will continue to fuel year-over-year sales gains in the fourth quarter.
Another interesting piece of data from Ford this morning was that 64% of F-150 retail sales last month included the EcoBoost engine option. Ford's EcoBoost engine has sold in roughly 733,000 vehicles in the U.S. through the first nine months of 2015, a 43% increase compared to the same time last year. That's already a calendar-year record for the EcoBoost sales total, and Ford still has three months to pad the stats for a new record.
Lincoln: Good and bad
I've long said one catalyst for Ford investors is the company's revival of its struggling luxury brand. It's becoming critical for major automakers to have a successful luxury brand to raise margins and transaction prices in markets where large SUVs and trucks don't sell well.
Here's the good news for Lincoln in September: Every single Lincoln vehicle posted double-digit sales gains compared to last year, except the Navigator. Lincoln's flagship sedan, the MKZ, posted a sales increase of 14.4% compared to last year, for a total of nearly 2,500 units sold last month. Lincoln's MKC, which launched last year, posted a sales increase of nearly 16% compared to last September and remains the brand's second-best-selling vehicle year to date.
The bad news is that while Lincoln's total brand sales are up almost 20% last month, compared to the prior year, many of its vehicles aren't selling as well through the first nine months of 2015. Consider that the MKZ, MKS, and MKX posted respective year-to-date declines of 14.2%, 13.3%, and 19%. While many investors simply glancing at the bottom-line figures will see a 9.1% increase in year-to-date Lincoln sales -- which is a gain of nearly 6,200 units -- the fact is, all of that gain is due to the incremental sales of the MKC this year, which didn't record a full year of sales in 2014.
September was an extremely strong month for Ford overall, and as the company continues to crank out more and more F-150s and SUVs to consumers, expect profits to rise during Ford's third and fourth quarters this year.
Daniel Miller owns shares of Ford. The Motley Fool recommends 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.