Ford Motor Company (F)

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Ford Motor Company (F)

October 03, 2011 1:00 pm ET

Executives

Ken Czubay - Vice President of US Marketing Sales & Service

Jenny Lin -

Erich Merkle -

Analysts

Todd Lassa - MotorTrend

DeeAnn Durbin

Joe Szczesny

Mike Ramsey

Peter Nesvold - Bear Stearns

Ravi Shanker - Morgan Stanley, Research Division

Keith Naughton - Bloomberg

Himanshu Patel - JP Morgan Chase & Co, Research Division

Chrissie Thompson

John Murphy - BofA Merrill Lynch, Research Division

Christopher J. Ceraso - Crédit Suisse AG, Research Division

Patrick Archambault - Goldman Sachs Group Inc., Research Division

Dan Galves - Deutsche Bank AG, Research Division

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the fourth monthly sales call. My name is Modesta, and I will be your coordinator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Erich Merkle, U.S. Sales Analyst. Please proceed, sir.

Erich Merkle

Thank you, Modesta, and welcome. Welcome to the September sales call. This is my -- as many of you will know, my name is Erich Merkle. This is my first call here with Ford Motor. And it's been -- I know many of you, but I look forward to working with many of you as we go forward into the months and years that are in front of us.

But I wanted to start things off today here with taking a look at sales, which is the reason you're all here. We estimate that annualized sales for the month of September was about -- came in at about 13 million to 13.1 million units. It was a solid month, as you will know. The cadence, we saw that the cadence strengthened as the month progressed, and September shows relatively good signs with the industry growing from what was not such a solid month in August of about 12.3 million units.

We continue to see a restocking of inventories, and we're seeing an increase in merchandising activity around the industry, which we believe was part of what helped us here in the month of September. For Ford, September sales totaled 175,199 units, up 9% from a year ago. Ford brand sales were up 14%, with utilities and pickups posting up the biggest increases with sales gains of 35% and 15%, respectively. Ford fleet mix in September was 28% of sales, with daily rental representing just 9% of Ford's total sales.

Now at this point in time, a person that you're all very familiar with, I'd like to turn it over to Ken Czubay for some additional color around sales.

Ken Czubay

Thank you, Erich, and welcome to your first call.

Erich Merkle

Thank you, Ken. Thank you.

Ken Czubay

It's going to be a lot of fun and you're going to do a great job. September was a solid month for Ford and the industry. As Erich pointed out, we experienced the same improvement in cadence during the course of the month that we believe the industry did, with pickups and utilities especially coming on strong as we moved toward the end of September.

Ford brand utilities were up 35% in September with 48,798 vehicles sold. Year-to-date, Ford brand utilities are up 30%. We're proud of Ford's #1 position in this important segment. It's really been a dynamic one so far this year. The utility has changed throughout the years, and our continued leadership proves that Ford has been able to adapt quickly to the changing needs of our customers.

Utility customers are looking for a balance between strong capability and fuel efficiency. It's won from one end to that to another from time to time, but now everyone's focused on strong balance, and Ford delivers. For those customers, we have the Escape, the Edge and the Explorer, all with best-in-class fuel economy. With 2.0-liter EcoBoost now making its way into Edge and Explorer, it makes our high fuel efficiency message to our customers even stronger. The 2-liter EcoBoost Edge delivers 30 miles per gallon on the highway. The new Explorer with this engine, that's the 2-liter, provides 28 miles per gallon on the highway, and that's with a vehicle that seats 7 people.

Escape delivered our biggest utility headline for the month. Escape had a 41% sales increase, delivering record September sales of 20,225 vehicles. Through September this year, Escape sales totaled 187,850, more than any other utility in America.

Explorer provided a 204% increase last month versus a year ago. During the third quarter of this year, Explorer sales totaled 31,134 vehicles. This is almost triple the volume of third quarter a year ago. The Explorer is really hot in the marketplace.

On the car side, Ford Fusion bested last September's record by 23%. Fusion sales totaled 19,510 last month and have set monthly records 11 out of the last 12 months. With sales through September totaling 188,439, Fusion is on pace to break the 200,000-vehicle sales mark and achieve an all-time sales record.

Nationally, Focus sales were a little lower than a year ago as inventories were tight in September compared to year-ago levels. That continued as we made the transition from the previous model to this model. The good news is retail sales of our new Ford Focus were up 30% in California versus September 2010 volumes. And compared to August, September Focus sales in our San Francisco region were up 45%. Our L.A. region led with being up 53%. The state of California, the largest car market in America, posted a 50% increase month-over-month, bringing us new customers and helping further strengthen Ford on the coast. I've talked about that the last few calls. Between Fiesta, Focus and Fusion, we are incredibly reestablishing the Ford brand on the coast and especially in California.

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