Ford Motor Company (F)

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Ford Motor Company (F)

Monthly Sales Call

October 2, 2012 10:00 am ET

Executives

Erich Merkle – U.S. Sales Analyst

Ken Czubay – Head of U.S. Sales and Marketing

Ellen Hughes-Cromwick – Chief Economist

Analysts

Brian Johnson – Barclays

John Murphy – BofA Merrill Lynch

Chris Ceraso – Credit Suisse

Adam Jonas – Morgan Stanley

Patrick Archambault – Goldman Sachs

Elaine Kwei – Jefferies

Karl Henkel – Detroit News

Deanna Durban – Associated Press

Keith Naughton – Bloomberg

Mike Ramsey – Wall Street Journal

Byron Pope – Ward’s Auto

Presentation

Operator

Good day ladies and gentlemen and welcome to the Ford monthly sales conference call. My name is Latasha and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question and answer session towards the end of this conference. If at any time during the call you require audio assistance, simply press star followed by zero and a coordinator will be happy to assist you.

I would now like to turn the call over to Mr. Erich Merkle, U.S. sales analyst. Please proceed.

Erich Merkle

Thank you, Latasha, and good morning, and welcome to Ford’s September 2012 sales call. Based on early results this morning, we anticipate that September SAAR finished the month around 15 million vehicles, including medium and heavy trucks. We estimate that September in absolute volumes finished the month just above 1.2 million vehicles –again, this is including medium and heavy trucks. This would provide us with an industry increase of approximately 12% for the month of September versus the same month a year ago. By our estimates, the industry continued to show strength in retail sales in September, representing approximately 82% of the overall sales mix. Calendar year-to-date through September, we believe the industry is running at approximately 14.6 to 14.7 million total vehicles, consistent with August and July. This remains in line with our forecast range of 14.5 to 15 million total vehicle sales for this year.

A few observations from a segmentation perspective – September marked the industry’s start of Truck Month. We estimate that the total full-sized pickup truck segment represented approximately 11.7% of the overall industry in September, up from just over 11% in August. This represents the highest share levels for this segment this year. We saw the full-sized pickup truck segment continue to strengthen and gain momentum as the month progressed, reaching approximately 12.4 to 12.5% as we approach month-end. We also saw a surge in the small car segment growth last month, just as we did in August. With higher fuel prices at the beginning of the September, the small car segment moved to just over 23% of the overall industry with much of the strength at the end of August flowing through the first half of September.

Now here to provide you some additional texture from Ford’s perspective is Ken Czubay. Ken?

Ken Czubay

Good morning everyone, and thank you Erich. In September, Ford sales totaled 174,976 vehicles, unchanged from last year. Retail sales were up 4% compared to last September. We saw gains coming from cars, utilities and yes, F-series as we kicked off Truck Month in September. It’s a really exciting time at Ford right now. We have a strong portfolio of products and customers are responding well to our investment in fuel-efficient power trains in cars, utilities and trucks. Ford’s lineup keeps getting better, and now we are ramping up inventories of our newest products – our all-new C-MAX hybrids and Fusion and Fusion hybrids.

Erick talked about the industry’s segment expansion in small cars and full-sized pickups. We saw the same pattern on Ford dealer showrooms last month. With 55,077 pickups sold, we had our best September F-series sales results since 2007; plus, September marked our 14th consecutive year-over-year increases in our pickup truck sales.

Escape posted its best September sales ever with 23,148 vehicles sold. The all-new Escape continues to be one of our fastest turning vehicles along with Fusion. Approximately 50% of our Escape sales are coming from people trading in non-Ford vehicles – incredible conquest rates with high series Escapes, that would be the SEL and Titanium, now accounting for nearly 60% of sales. EcoBoost represented over 90% of all Escapes sold last month, working to push the total number of EcoBoost equipped vehicles the Company has sold since introduction in July of 2009 to more than 350,000.

With higher fuel prices carrying over to the first half of September, Focus sales increased 91% in September. In fact, September was Ford’s best small car sales month in a decade. We have been able to expand our share in the segment from its low of approximately 6% to our current share level today of about 10%. That’s a jump of more than 60% retail share increase in just five years.

Also of note, we sold nearly 1,000 of the all-new C-MAX hybrids in the final days of September. I just got back from a meeting with one of our key dealer groups and they tell me we are bringing new customers to Ford with this all-new vehicle. Frankly, they were swarming all over the lots as they were delivered.

And finally, our commercial business is up 9% this year. Based on vehicle registration data, we continue to be the number one seller of commercial vehicles in the United States. Building on this success, we now have our all-purpose police interceptor sedans and utilities in the market for six full months, and have sold over 10,000 vehicles to police agencies across the nation. Based on registration trends, we anticipate being the leader in this business in 2012.

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