Ford Says July Good Month Despite Sales Slide

Ford officials say July 2005's successful employee discount incentive program overshadows this year’s result.

Ford Motor Co. light-vehicle sales took a 32.0% dive in July from year-ago to 236,353 units, based on daily rates, largely due to a 42.4% plunge in light-truck sales.

The performance puts Ford’s overall year-to-date sales 9.9% behind year-ago levels. However, Ford officials say July 2005’s successful employee discount incentive program overshadows this year’s result.

“To no one’s surprise, there was a sharp decline compared to last July because that was the first month of employee pricing,” George Pipas, Ford U.S. sales analysis manager says. “It is what it is. Last year (saw) the highest (July) sales in Ford history.”

Despite the sales decline, Pipas describes July as a “good month,” with higher retail sales than in June.

While light-truck sales had the furthest to fall, Ford’s car sales dropped 3.3% to 89,395 units compared with like-2005, according to Ward’s data.

Not all Ford car sales were disappointing. The auto maker’s new midsize sedans – the Ford Fusion, Mercury Milan and Lincoln Zephyr sold 13,612 units, 3,490, and 3,027, respectively. Pipas was especially pleased with Fusion’s performance.

“It’s a bit of a watershed moment,” he says. “July is the first month that Fusion is the top-selling passenger car in our lineup.”

The Mustang also put in a strong performance, with sales surging 34.8% vs. year-ago. However, the Mustang was not included in last year’s incentive drive, which skews comparison sales figures.

With gas prices eclipsing $3 per gallon in most parts of the country, sales of the Ford Escape Hybrid climbed 8.4% from year-ago.

Most troubling to Ford is the downward spiral of its historically best-selling F-Series pickup. F-Series sales plunged 44.8% in July to 65,361 units. To date, Ford has sold 440,258 F-Series, making it highly unlikely the auto maker will make its projected 900,000-unit annual sales goal.

While Pipas stops short of saying this, he emphasizes that “no other vehicle has ever eclipsed 900,000 (units) in three consecutive years. What we’ve seen of late at Ford and industry data clearly shows demand has softened in this segment.”

SUV sales are taking a beating as well, with sales of the once-popular Explorer off a whopping 48.6% to 15,851 units. Sales of the fullsize Expedition slid 55.7% to 6,705 units.

All Premier Automotive Group brands were off for July from year-ago, with Volvo sales down 6.6%, Jaguar off 11.7% and Land Rover slipping 27.9%, according to Ward’s data.

There were some bright spots. Volvo reported a 3.6% rise in Volvo 40 sales compared with year-ago, and Jaguar XJ6/8 sales climbed 17.6%.

Pipas says Ford’s fleet mix was 37% year-to-date, while fleet sales were up 36% vs. year-ago.

Inventories finished the month at 667,000 units, 174,000 cars and 503,000 trucks, down from 795,000 at the end of June.

Ford also announces the conclusion of its “Drive on Us” incentive program, which offered buyers 0% financing or $1,000 fuel cards on most ’06 models.

Ford says it is trying to price its vehicles more closely to actual transaction prices rather than rely on costly incentives.

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