Ford Motor Company (F)

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Ford Motor Company (F)

U.S. Sales Conference Call

December 03, 2012, 10:00 am ET

Executives

Erich Merkle - Sales Analyst, Ford

Ken Czubay - VP, U.S. Marketing, Sales & Service

Jenny Lin - Senior U.S. Economist, Ford

Analysts

John Murphy - Bank of America

Chris Ceraso - Credit Suisse

Aditya Oberoi - Goldman Sachs

James Albertine - Stifel Nicolaus

Colin Langan - UBS

Brian Johnson - Barclays

Brent Snavely - Detroit Free Press

Mike Ramsey – The Wall Street Journal

Dee-Ann Durbin - Associated Press

Keith Naughton - Bloomberg

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Ford Monthly Sales Call. My name is Jessenia and I will be your operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the call over to your host for today Mr. Erich Merkle, U.S. Sales Analyst. Please proceed sir.

Erich Merkle

Thank you, Jessenia and good morning everyone and thank you for joining us today on Ford’s November 2012 sales call. Based on early results from this morning, we anticipate that November SAR including medium and heavy trucks closed the month in the low to mid-15 million range. This would translate into approximately 1.12 million to 1.13 million vehicles, again including medium and heavy trucks, providing the industry with a November year-over-year increase of approximately 9% to 11%.

Industry retail sales representing an estimated 84% of November’s sales mix grew in November, with the retail SAR for the month running in the high 12 million vehicle range. We estimate that replacement demand from Hurricane Sandy accounted for an additional roughly 20,000 to 30,000 vehicles in November industry wide. Calendar year-to-date through November, the industry is running at about 14.7 million total vehicles and remains on pace with our guidance.

Some of the segment observations that we've made this month; small cars continued their unseasonably strong performance into November, with the segment accounting for approximately 22% of industry’s sales. There also was a significant increase in small and mid-sized utilities, as they benefited from seasonal tail winds and replacement demand in the east. Small utilities moved to almost 14% of industry in November compared to in the high 12% range in October.

Mid-size utilities moved to approximately 12% of industry in November, which was up one percentage point from October. Ford had its best November F series month since 2005 with sales up 18%. The overall full size pickup segment pulled back slightly to 11% of the industry compared to 13% in October.

Now to give us more insight on what’s being happening in Ford dealer showrooms across the nation, I would like to introduce Ken Czubay.

Ken Czubay

Thank you, Eric and hello everyone. Sales at Ford in November totaled 177,673 vehicles, a 6% increase compared to last year. We saw real strength in our retail sales which grew 12% versus year ago levels. We saw tremendous gains coming from our passenger cars as well as from utilities and trucks. As was the case last month, both fuel efficient small cars and pickups showed great strength in growth on our dealer lots across the nation in November.

Let’s take a closer look first at cars. Ford sales of small cars including Focus, C-MAX Hybrid and Energi Plug-in Hybrid and Fiesta accelerated in November. We saw a 76% gain over last year and provided us with our best November small car performance since 2000. In California, our largest market for C-MAX Hybrid, Focus and Fiesta we saw a small car increase of a 105% over last year. C-MAX Hybrid contributed to approximately 50% of our retail sales growth in California last month.

Also of note, in its second four month of sales, our C-MAX Hybrid lineup sold 4,848 vehicles across the country of 52% increased over October number. In November C-MAX Hybrid and Energi Plug-in Hybrid sales delivered more than 40% of our smaller car growth nationally, helping Ford delivered its best single month of electrified vehicle sales ever.

Our competitive Conquest rate for C-MAX Hybrid is running over 60%, with Toyota Prius as our top Conquest vehicle. C-MAX Hybrid and the all new Fusion were our fast turning vehicle on dealer lots in November, with new gas engine fusions and dealer lots in average of 12 days and Fusion Hybrids on lots for just seven days.

We have spoken often about the mix of our business changing, including a changing balance between cars, utilities and trucks. Today Ford sales of small cars mid-sized Sedans and small utilities, what we have started calling the super segment of vehicles is now consistently running above F-series sales.

Great progress on our plan to grow on a small car utility line-ups, while building on our truck leadership. On the utility front Explorer continued it’s strong performance with its best retail sales number since its redesigned in December of 2010 two years ago. Explorer retail sales were up almost 30% over last year, thanks largely to the newest Explorer Sport.

Interestingly Explorer Sport is turning at a rate faster than many of our specialty vehicles, including the Mustang GT500s and Raptors, which continue to sell very well. Now on the truck side, we saw tremendous results not only was Sport up 18% with 56,299 vehicles sold, last month marked our best November since 2005, seven years ago when the full sized pick up truck segment was running at 58% higher than today.

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