May was a solid month for Ford U.S. sales, despite an expected decline in daily rentals and F-Series sales.
Total sales for May were up 3 percent from a year ago, while retail sales were up 6 percent.
“Given where we’re at with our plan we did very well in the month of May. We had our best May retail sales month going all the way back to 2004,” said Ford U.S. Sales Analyst Erich Merkle.
The vehicles that really helped retail sales climb were the Ford Escape and Fusion, both of which established best-ever monthly sales records. The Ford Explorer also performed strongly in May.
“Explorer had a great month,” said Merkle. “In fact, it was our best sales month since July of 2005, and it’s the first month that we’ve exceeded the 20,000-vehicle sales mark with the new Explorer.”
The Ford Transit Connect also had its best sales month ever with 4,222 vehicles sold.
“Retail sales were up 54 percent over last year,” said Merkle. “The consumer version of the vehicle seems to be really connecting with our customers.”
Though sales were up for the month of May, Merkle said the numbers were softened by a decline in daily rentals – down 9 percent in May versus last year and down 16 percent year-to-date – but that is by design.
“We’ve been cutting back on daily rentals. That is a planned effort on our part. We’re not eliminating them. We’re just managing our business to continue profitable growth,” he said. “Our focus has been more on the retail side of the business this year.”
Merkle said it’s important for Ford to maintain balance in the rental car market.
“We like to have some vehicles out there for rental purposes so that people who otherwise wouldn’t have an opportunity to drive our cars are able to experience them on the road,” he explained. “But if we have too many rentals, it starts to negatively impact our residual values, which is not good.”
F-Series had a strong month but sales were down slightly from last year by 4 percent, which also placed a bit of a drag on May sales figures since F-Series represents about 30 percent of overall sales for the company. But Merkle said what’s happening with F-Series is also an expected result of Ford’s plan.
“We’re managing our incentive spend relative to the competition, which is part of our plan to expand our inventories a bit between now and the transition to our all-new F-150,” he explained. “We need our inventories to be higher in order to prepare for the weeks that we’ll be down due to the transition between models when we won’t be building F-150s. It’s important that we have enough stock on our dealer lots to satisfy customer demand during the changeover.”
Merkle pointed out that F-Series incentive spending was lower than Chevrolet and Ram pickups in May and average transaction prices were higher – markedly so.
“We still outsold Chevrolet and Ram new pickups, with an F-Series that is at the end of its lifecycle with less cash and a higher average transaction price,” he said. “If that doesn’t speak volumes about the strength of F-Series, I don’t know what else does.”
Looking forward to June sales, Merkle said employees should not be alarmed if the numbers are a bit lower.
“The industry came in hot at 17 million in May, with a significant boost in the final weekend,” he said. “Whatever June brings, the industry appears to be on very solid footing.”