There's no way to sugarcoat it: Ford's June sales sucked. Ford dealers moved 28 percent less metal– 167K vehicles– than last June. Compared with the first half of 2007, FoMoCo's sales fell a full 14 percent. In all fairness, the numbers are the first which don't include Jaguar and Land Rover (sold off to Tata motors). But based on recent months' sales, the two brands would have only added about another 4k sales. So it still sucks. Retail sales for cars were up three percent; cars and crossovers made up 59 percent of retail sales for the first half of the year. Fleet sales were down 11 percent for June. Ford mouthpiece Jim Farley explained "the rapid rise in gasoline prices, and the resulting shift toward fuel efficient vehicles, has been challenging." But fear not! "In addition to adjusting our capacity and production plans to produce more cars and crossovers, we are introducing several new vehicles with class-leading fuel economy." Hope springs eternal, but will it be this spring?
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I guess it’s gotta get worse before it gets better…right? How much worse can it get though?
Glancing quickly through the press release numbers, there are a few vehicles that are being halted or have already and that results in a -100% change, does that greatly affect the total percentage from 07 to 08?
The rate of increase for the Focus is starting to steadily slowdown a bit. Is this is a sign that people who wanted one got one or that people aren’t buying as many cars (regardless of size and efficiency) right now.
Oh dear. Chances are the majority of that sales drop is from the lack of sales of pick ups and SUV’s (i.e their cash cows) and since Ford are bearing much (if any) profit on their cars, this means two things:
1. Ford are still hameorraging market share.
and
2. Their profits are still going to be dismal.
However, if they can sustain themselves until next year, I reckon they should be able to reverse this with cars which bear a profit.
ok.. I’ll admit I’m biased here…
American Honda sales up 13.8% on a Daily Sales Rate for month of June 2008, as compared to June 2007 (for both Acura and Honda divisions)
poweredByHonda,
Biased? Couldn’t be. ;)
This is the first salvo in the domestic sales suck-fest this month.
Good grief. I hope I have the option of buying from an domestic auto company come 2012.
But the key is even if they are only making, say, $300 on a Focus, if every car just made $300, Ford would be profitable, which is better than they have been in the past.
Focus has seen nearly a $3500 change in net margin in a year. That’s what content and lower manufacturing costs get you. If you slowly work through your line and do that, you become profitable.
This will still reflect negatively on Ford’s profits, but it doesn’t guarantee long-term losses. The difference here is that instead of giving away the F-150, they stopped production. That’s $11000 on raw material they aren’t dumping on the lot with $4000 of invested labor and transport and prep just to sell it for $12000. And that change what makes a company profitable.
What I am most worried about is how much of Ford’s poor performance was related to GM’s 0% financing giveaway. If it was too direct, it means that people still aren’t cross-shopping with the key Japanese brands – and that is a far grimmer long-term issue than actually mix of sales. However, it is of note, that other than the “employee pricing” on the F-150, I didn’t see any large sales at all at Ford. Even at Toyota, I was seeing some hefty sales – and I live in Toyota-land.
And that’s the key – stopping the hemorraging at some point soon (relative to the market) and making sure that Ford is *considered* if not purchased in most transactions. This is just one month… Ford’s real challenges, honestly, are still about 12 months ahead.
Holy hell! Toyota down by 21%!
I would suspect that the gas spike has less to do with this than the ongoing (and going and going) housing meltdown. There is no clear scenario for a meaningful recovery in housing, and that screws the economy as a whole. Even if the slump housing prices ends, there is still way too much capital tied up in home markets that have permanently popped.
In a lot of ways it’s like the car industry; trucks are not unlike deep suburban developments: energy intensive, low cost/high margin, and extremely sensitive to commodity prices.
It’s grim.
Gas was ~2.90 a gallon during June 07. Around 4.10 one year later.
Meanwhile I just saw a story on another website where Toyota, the 2.8 & others in some sort manufacturer’s association is bitching to the government how the newly implemented fuel efficiency standards are too burdensome for the. WAAAA! you Feds just colluded with us to beat back California’s even more demanding standards. Now we are gonna complain some more!
Got news for you manufacturers, looks like the “free market” just moved the bar on you pretty much overnight, far faster than the government ever would.
Not so long ago I heard Auto journalists dissing Honda for the Ridgeline being too small, and now even its sales have dumped for Honda. I guess now its too big!
Pickup sales are being hit with a double whammy-gas prices are insanely high and housing starts are insanely low. Pickup sales have always been tied very closely to housing starts. So, ttacgreg, the Ridgeline was down merely because it’s a pickup. The Ranger was down 33.8%, even though it’s the smallest pickup for sale in the US.
Those new CAFE standards are a consummate disgrace. They will be the final nail in the car industry’s coffin.
I hope that entire CAFE legislation is gutted and eviscerated like a grizzly chowing down on a salmon. Give the industry 10 years to hit 30mpg or so. 35mpg is absolutely unreasonable.
We don’t need CAFE to get more fuel efficient cars. The market, as usual, took care of it.
Those new CAFE standards are a consummate disgrace. They will be the final nail in the car industry’s coffin.
I hardly doubt CAFE standards will spell the end for the auto industry. They might spell the end for the likes of the Detroit 2.8, but I have little doubt that Honda & Toyota will find a way to comply.
Unfortunately CAFE will become an excuse for the downfall of Detroit, even though the market is demanding over 35mpg right now. If the revised CAFE standards were implemented 10+ years ago I highly doubt we’d be looking at the 2.8′s sales off 25+ percent.