KBB and Wall Street Journal claim Ford big loser in September

[bdegrand]

funny, guess where a LOT of those Caravans are going.....call Enterprize, hertz, or Alamo......want to know why the Rental companies buy em....because the Manufacturer literally gives the cars away, Honda dont play that game...as for the Explorer its leading its segment, Flex are just gravy....and its cheaper than the Explorer so what constitutes the too expensive quip?....

I love your emotion....I'm with you and actually started my Ford career in 1974. Been there and done it. Ford is a company with class....refused the Government handouts....never been owned by Germans and Italians...like Chrysler. Paying back all their loans. Not sure what the balance is on that. No matter what is perceived about Ford....it is one of the strongest, hard working, dedicated truly American companies.

[RichardJensen]

Camry sold about 41,000 and Accord sold 51,000 in August. Fusion sold 29,000. It upsets me to see those sales numbers

 

Graphic from May of this year:

 

 

Quote from Feb of this year:

 

Ford's chief sales analyst, Erich Merkle, said he is confident Fusion supplies will thin out as the weather warms up. He said Ford plans to be disciplined with incentives, yet "maintain a competitive position." After accounting for incentives, the Fusion commands the segment's highest transaction prices, he said.

http://www.autonews.com/article/20140221/RETAIL/140229964/ford-raises-incentives-on-fusion-to-cut-inventories#

 

From Aug. last year:

 

http://www.bloomberg.com/news/2013-09-26/toyota-camry-s-run-as-no-1-u-s-sedan-may-end-next-year.html

 

While Toyota is holding on to the sales lead, it has done so at lower prices. The average transaction price on a Camry has declined by 6.4 percent this year through August. In contrast, Accord’s transaction prices rose 7.7 percent and Fusion’s increased 4.5 percent, according to Bloomberg Industries.

 

 

 

That gave Camry the lowest transaction price, or what consumers paid after incentives, among the four best-selling sedans. The average Camry sold for $23,890 last month, compared with $24,910 for Altima, $24,925 for Accord and $25,987 for Fusion, according to Santa Monica, California-based Edmunds.

 

http://www.bloomberg.com/news/print/2013-08-25/ford-fusion-output-boost-tests-2-300-premium-over-camry.html

Camry’s average prices have fallen 2 percent to $23,965, and the car has slipped from ranking eighth in the segment at this point last year.

 

Edited September 26, 2014 by RichardJensen

[Deanh]

I love your emotion....I'm with you and actually started my Ford career in 1974. Been there and done it. Ford is a company with class....refused the Government handouts....never been owned by Germans and Italians...like Chrysler. Paying back all their loans. Not sure what the balance is on that. No matter what is perceived about Ford....it is one of the strongest, hard working, dedicated truly American companies.

thats my exact point, Chrysler/ Fiat and GM took the bailouts and have continued to do business in the EXACT same way that got them tehre in the first place......Ford hasnt, their business model sacrifices outright numbers for a more sustainable operation....

[RichardJensen]

Let's give Chrysler some credit... Jeep is firing on all cylinders. The products are good, and prices are right.

 

Ram pickup is also a decent truck and while there is no doubt Chrysler is buying market share, it seems to have an effect on GM more than anything else. Ram sales were coming at the expense of GM earlier in the year and that forced GM to respond with lots of incentive to keep the market share. Ford is standing on the sideline pretty much since 2014 F-150 is winding down.

 

I'd love to see a line-by-line breakdown at Chrysler because they appear to be selling plenty of high margin vehicles (CUVs, trucks), but their margins are just horrible. Probably the worst of any manufacturer in the US market.

[Deanh]

Let's give Chrysler some credit... Jeep is firing on all cylinders. The products are good, and prices are right.

 

Ram pickup is also a decent truck and while there is no doubt Chrysler is buying market share, it seems to have an effect on GM more than anything else. Ram sales were coming at the expense of GM earlier in the year and that forced GM to respond with lots of incentive to keep the market share. Ford is standing on the sideline pretty much since 2014 F-150 is winding down.

Jeeps are a niche, and have a hugely loyal following, cant deny that...

[bdegrand]

Where is Chrysler's challenge for Transit or Transit Connect? Fusion? Escape? Focus? Fiesta?[/quote

I think the Dodge Promaster ....the Chrysler 200....come to mind.

[akirby]

Where is Chrysler's challenge for Transit or Transit Connect? Fusion? Escape? Focus? Fiesta?[/quote

I think the Dodge Promaster ....the Chrysler 200....come to mind.

 

And how are they selling compared to the Ford counterparts? And that's only Transit and Fusion - what about the others? You cherrypicked one type of vehicle where Chrysler has a product that outsells Ford while ignoring several others that are the opposite.

[Deanh]

 

I'd love to see a line-by-line breakdown at Chrysler because they appear to be selling plenty of high margin vehicles (CUVs, trucks), but their margins are just horrible. Probably the worst of any manufacturer in the US market.

Fiat is pretty blatantly trying to buy market share....obviously they dont care right now of ramifications simply relying on beleif future product will nullify any pre conceptions

[silvrsvt]

Lets also not forget the Yen is at significant low against the dollar for the first time in ages...which Japanese Automakers like because it means more profit for them. As of today its 91 Yen to the dollar, where was at a high of 120 Yen right after the Fucksihimi nuke accident/tsunami.

People have to quit getting hung up on monthly numbers, because if your buying market share without improving your profits, whats the point?

[bdegrand]

And how are they selling compared to the Ford counterparts? And that's only Transit and Fusion - what about the others? You cherrypicked one type of vehicle where Chrysler has a product that outsells Ford while ignoring several others that are the opposite.

I recall Dodge Durango....Journey....Challenger....Dart....Charger...all of which reported sales increase...

Edited September 26, 2014 by bdegrand

[RichardJensen]

< 3% margins.

[Deanh]

I recall Dodge Durango....Journey....Challenger....Dart....Charger...

none of those are setting the world on fire....although they can probably be bought really cheap or rented from as low as $19.95 a day....lol.

[bzcat]

 

I'd love to see a line-by-line breakdown at Chrysler because they appear to be selling plenty of high margin vehicles (CUVs, trucks), but their margins are just horrible. Probably the worst of any manufacturer in the US market.

 

Well... let's do some informed (but ultimately unsupported) speculations:

 

• Chrysler can't be making money on compact cars... they are just a minor player here. If I had to guess, Dart is losing money and Fiat 500 is barely treading water.

• Midsize cars had been a giant hole for Chrysler for a long time - 200 and Avenger were selling at compact car prices and mostly to rental fleets, so margin is probably horrible. And the new 200 is launching with lots of marketing investment but I don't see them lifting retail transaction prices by 25~30% overnight to reach parity with lower performing models like Camry or Sonata. Nevermind the premium players like Fusion or Accord in this segment.

• Minivan brings in lots of cash flow and it probably has decent but not great margin. Chrysler vans lacks some high end options and features that keeps Honda Odyssey transaction prices in the upper $30k range.

• The fullsize sedans 300 and Charger, as well as Challenger are probably doing quite well in terms of profit margin.

• Dodge Journey is a 7 seat midsize CUV selling for less than competitors' compact CUV. Margin is probably expressed in LOLs.

• Viper is losing money for sure, unlike Corvette.

• Promaster is new and Chrysler had been out of the van business for a few years so they probably lost all their fleet contracts. Also it is a CKD operation in Mexico, not fully localized production like Transit so cost basis are probably in Euros not Peso. Diagnosis on margin - not good.

Edited September 26, 2014 by bzcat

[RichardJensen]

One also wonders if Fiat is funneling money back into Europe covertly via black box SG&A items.

[Deanh]

nutshell, Ford is fully aware of inventory and less stellar sales numbers right now, because they are ramping up for theoretically HUGE numbers along with several class leading vehicles, ie F-150 ( by the way, THE largest selling vehicle in the US )

[akirby]

I recall Dodge Durango....Journey....Challenger....Dart....Charger...all of which reported sales increase...

 

None of those compete with the vehicles I mentioned except Dart. You missed the point.

 

And Dart sales are not a good way to prove that Chrysler is doing better than Ford. Dart sales suck (even though the vehicle itself is good).

Edited September 26, 2014 by akirby

[Anthony]

While it was expected that Chrysler would have the highest incentive (though not really much higher then the other domestics), the big surprise is Honda. They've actually been spending quite a bit of money this year...way more then usual.

 

 

Here's the Forecasts from Truecar:

 

Here's expected unit sales and market share for September as well:

 

 

 

 

Honestly, I don't think many people at Ford are peeing in their boots. It's somewhat an alignment of planets right now with the F-150 changeover and whatnot.

 

What's odd about this thread in particular is that we were just talking about how this was going to occur a few months ago (and more recently as well) It was expected and now it's happening. This shouldn't be a big surprise. Check back once the new trucks launch, I'm sure things will go back to normal.

 

[bdegrand]

None of those compete with the vehicles I mentioned except Dart. You missed the point.

 

And Dart sales are not a good way to prove that Chrysler is doing better than Ford. Dart sales suck (even though the vehicle itself is good).

Sorry for missing your point. My point is that almost everything Chrysler/Fiat/Dodge currently makes is reflecting an increase in sales.

[akirby]

Sorry for missing your point. My point is that almost everything Chrysler/Fiat/Dodge currently makes is reflecting an increase in sales.

 

Last year I sold 10 vehicles.

 

This year I sold 110 vehicles. I just increased my sales 1000%. Am I better off than Ford?

 

Your point ignores HOW they are increasing sales and WHERE their sales were to begin with. If you can't understand the flaw with buying market share then we can't help you.

[Deanh]

Sorry for missing your point. My point is that almost everything Chrysler/Fiat/Dodge currently makes is reflecting an increase in sales.

TO RENTAL COMPANIES...cheap is a Rental companies darling. Chrysler is playing a dangerous game by literally BUYING the market, it cannot continue without them ultimately hurting themselves beyond repair, OR requiring another bailout....Ford is wise and know better than to follow route. And GM's just being themselves again..badly managed and travelling down the same road.

[Deanh]

Sorry for missing your point. My point is that almost everything Chrysler/Fiat/Dodge currently makes is reflecting an increase in sales.

hard not too when initially sales were so freekin dismal...keep that in mind.

[mackinaw]

One also wonders if Fiat is funneling money back into Europe covertly via black box SG&A items.

 

Fiat is funneling Jeep/Ram money back to Europe so as to fund Sergio's dream of putting an Alfa Romeo in the garage of everybody who lives in America.

[JasonM]

From last month's sales analysis:

 

http://www.at.ford.com/news/cn/Pages/Behind%20the%20Numbers%20with%20Ford%20U-S-%20Sales%20Analyst%20Erich%20Merkle.aspx

 

"As I’ve said in recent months, there are two factors that will continue to place some drag on our sales figures through the end of the year. August was no exception. The first is our conscious effort to pull back on sales to daily rental companies, which were down 36 percent in August versus last year. Through the first eight months of this year are sales to daily rental fleet companies are down 16 percent. When the pricing gets too competitive in the daily rental segment, we don’t feel the need to chase volume for the sake of some additional sales. We have been and continue to be focused on “profitable” growth. Some businesses have never met a check they didn’t like; that’s not Ford."

 

"The second factor is our management of F-Series. F-Series represents approximately 30 percent of our overall sales and we need to manage our inventory appropriately to ensure that our stock will carry us through the changeover that has just now begun at the Dearborn Truck Plant. Dearborn Truck can no longer make old model 2014 F-150s. To manage this inventory, we have pulled back on our incentive spend to curtail sales a bit as we move through our changeover, which will later include Kansas City Truck. "

 

"The interesting thing about F-Series is that even at the end of its product cycle our monthly sales were still above 60,000 – 68, 109 to be exact – and we are seeing the strongest average transaction prices in the industry at approximately $41,000 per truck. Our competitors would love to have a product that sells more than 60,000 vehicles a month, with an average transaction price pushing $41,000 per truck. For this reason it’s hard to look at F-Series and not smile. Did I mention that our competitors all have newer trucks already in plentiful supplies on dealer lots?"

[Deanh]

From last month's sales analysis:

 

http://www.at.ford.com/news/cn/Pages/Behind%20the%20Numbers%20with%20Ford%20U-S-%20Sales%20Analyst%20Erich%20Merkle.aspx

 

"As I’ve said in recent months, there are two factors that will continue to place some drag on our sales figures through the end of the year. August was no exception. The first is our conscious effort to pull back on sales to daily rental companies, which were down 36 percent in August versus last year. Through the first eight months of this year are sales to daily rental fleet companies are down 16 percent. When the pricing gets too competitive in the daily rental segment, we don’t feel the need to chase volume for the sake of some additional sales. We have been and continue to be focused on “profitable” growth. Some businesses have never met a check they didn’t like; that’s not Ford."

 

"The second factor is our management of F-Series. F-Series represents approximately 30 percent of our overall sales and we need to manage our inventory appropriately to ensure that our stock will carry us through the changeover that has just now begun at the Dearborn Truck Plant. Dearborn Truck can no longer make old model 2014 F-150s. To manage this inventory, we have pulled back on our incentive spend to curtail sales a bit as we move through our changeover, which will later include Kansas City Truck. "

 

"The interesting thing about F-Series is that even at the end of its product cycle our monthly sales were still above 60,000 – 68, 109 to be exact – and we are seeing the strongest average transaction prices in the industry at approximately $41,000 per truck. Our competitors would love to have a product that sells more than 60,000 vehicles a month, with an average transaction price pushing $41,000 per truck. For this reason it’s hard to look at F-Series and not smile. Did I mention that our competitors all have newer trucks already in plentiful supplies on dealer lots?"

case closed I would say.....nothing to bleat about here, move along....

[jpvbs]

Wait 'til you see the Sept 2015 y-o-y sales increases. An off month this year will make next year's numbers look amazing.