Ford Motor Company (F)

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Ford Motor Company (F)

March 01, 2012 10:00 am ET

Executives

Erich Merkle -

Ken Czubay - Vice President of US Marketing Sales & Service

Jenny Lin -

Analysts

John Murphy - BofA Merrill Lynch, Research Division

Colin Langan - UBS Investment Bank, Research Division

Patrick Nolan - Deutsche Bank AG, Research Division

Joseph Spak - RBC Capital Markets, LLC, Research Division

Christopher J. Ceraso - Crédit Suisse AG, Research Division

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Ford Monthly Sales Conference Call. My name is Erica, and I'll be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Mr. Erich Merkle, U.S. sales analyst. Please proceed.

Erich Merkle

Thank you, Erica. Hello, everyone, and welcome to Ford's February 2012 sales call. We're going to get things started, jump right into it here.

We estimate that total U.S. industry sales including medium and heavy trucks finished the month out at approximately 1,130,000. We could have -- we could have seen a high -- perhaps a trend as high as 1,150,000 vehicles. This would equate to an approximate 10% increase for the industry versus year ago in levels that are going to be in the -- would give us the SAAR in the high 14 million range to perhaps as high as 15 million. Ford sales totaled 179,119 vehicles in February, providing us with a 14% increase versus year-ago levels. Year-to-date, Ford sales are up 11%, with 315,829 vehicles sold.

In February, we saw 2 interesting trends. Sales picked up pace as the month progressed. And as the month unfolded, consumers increasingly shifted towards more fuel-efficient vehicles. We estimate that small cars as a percentage of overall retail sales for the industry moved close to 24% in February. This would really be consistent with the small car share last seen in March and April of last year, our last significant increase in fuel prices.

We saw a similar trend at Ford. Focus for instance saw a 115% increase in sales versus February of last year. We saw fuel prices influence Ford sales in a few other ways as well. And here to tell you more about that today is Ken Czubay. Ken?

Ken Czubay

Thank you, Erich, and good morning, everyone. Happy March 1. First of all, let me say that we are very pleased with our overall performance and our balance across cars, utilities and trucks.

This month, dealers throughout the country told us that fuel prices weighed heavily on the purchasing decisions of our customers in February. We saw this first hand in our business with very strong demand for Focus, Escape and a strong mix of full size V6 pickups.

Dealers are telling us that customers are recognizing Ford for investing in new vehicles that deliver top fuel economy. Last week, I was at the Cleveland Auto Show, where Ford announced the expansion of the EcoBoost production at our engine plant, how timely. By the end of 2012, nearly 1/3 of Ford's vehicle lines in America feature a model that delivers 40 miles per gallon or better, a claim no other full-line automaker can match.

Now Erich mentioned Focus. Focus sales totaled 23,350 in February, representing 115% increase compared to February of last year. Last month represented the best February Focus sales performance since 2012 -- excuse me, since 2000, 12 years ago. No other vehicle in the Ford lineup contributed more to Ford's sales growth last month.

California, which I've been talking about often, saw 123% increase in retail Focus sales, a higher increase than January's impressive 86% gain. California is the biggest small car state in the country and is now our top retail sales state for the Focus. Focus is really gaining momentum in California, in the East Coast and throughout the country.

Small utilities continued to perform well at Ford too, with Escape setting another best-ever sales month for February. This is in addition to the best-ever January record at the beginning of the year. Year-to-date, Escape sales are up 12%, on top of their record-setting pace last year. Explorer sales also continued to grow in February with 10,440 vehicles sold, an 8% increase versus last year. Now Explorer is the fastest moving vehicle in the Ford show room.

As we head into an environment of higher fuel prices, best-in-class fuel economy provides a strong advantage to Explorer. As many of you know, last fall, Explorer and Edge introduced 2.0-liter EcoBoost engines, providing consumers with 28 miles per gallon and 38 miles per gallon, respectively. Notwithstanding the segment shifts that Erich talked about, Ford F-Series were up 26% in February with 47,273 pickups sold. Fuel economy is certainly back on the minds of pickup truck buyers also, and we are very pleased that Ford has plenty of fuel-efficient choices for truck customers. Ford has captured more than 75% of the V6 full-size pickup truck market with its new line of V6 powertrains.

In February, Ford sold 57% of its retail F-150 pickups equipped with V6 engines, including 43% with EcoBoost. Finally, Lincoln saw an increase in February with sales up 16%. Our key vehicles providing this lift were: MKZ, up 40%; MKS, up 51%; and MKX, up 33%.

Overall, we are very pleased with our February performance. And in this environment, we are confident that our continued investment in new vehicles and powertrains will provide customers the power of choice in selecting the fuel-efficient Ford vehicle that best meets their needs.

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