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Ford January Sales Remain Strong in Wake of Mercury Demise

Mercury sales plunged 95.5%, compared with year-ago, as dealers sell off remaining stock.

Ford Motor Co.’s U.S. sales in January remained strong despite the discontinuation of the Mercury brand, with the new ’11 Explorer SUV helping pick up the slack.

Although production of the Mercury marque officially ended Jan. 1, some 248 units were delivered last month, albeit down 95.5% compared with year-ago, as dealers sell off remaining stock, according to Ward’s data.

Explorer sales hit 7,351 units, up 73.0% from like-2010, which largely offset the drop in Mercury deliveries.

Retail sales of the all-new Explorer soared 244%, making the SUV the fastest-turning vehicle in Ford showrooms in January, Ken Czubay, Ford vice president-sales and marketing, says in a conference call with reporters and analysts.

“Sales as a percentage of availability was 60%; that’s astounding,” he says. “Thirty percent is considered good.”

Czubay say the Mercury sell-down is going well, noting he intends to “retain all Mercury customers.”

While positive momentum for Ford-brand products may help counteract the loss of Mercury, that likely is little consolation for dealers who relied on the marque to offset low Lincoln demand.

Lincoln sales last month slide 21.0%, compared with year-ago, to 5,558 units. All Lincoln models posted declines for the month. The relatively new MKS flagship sedan was hardest hit as sales tumbled 53.9% to a mere 601 units.

Czubay says Ford has been in touch with Lincoln dealers, who have been informed of the auto maker’s plans to introduce seven new products over the next four years.

“We’re in the early stages of this (Lincoln rebuilding) process,” he says. “We’re making progress with Lincoln, but it’s a journey.”

Other than Lincoln and Mercury, Ford had a solid January, the slowest month of the year for vehicle sales. Overall deliveries totaled 124,760 units for a 12.7% gain on prior-year, based on 24 selling days both this year and last.

Retail sales rose 27%, while less-profitable fleet deliveries were off 10%. All categories showed increases, with cars up 35%, utilities up 22% and trucks up 25%.

The bulk of Ford’s retail deliveries came from the Fusion, Focus and Fiesta, says Czubay. “(The) Fusion is our highest-volume car and its retail sales were up 39%, and Focus retail was up 41%. Fiesta retail sales were the highest for any month except December.”

While Ford predicts retail sales will remain strong throughout 2011, fleet deliveries likely will see increases over the course of the year, says George Pipas, the auto maker’s top U.S. sales analyst.

“At Ford, (we expect) growth in commercial-fleet business throughout the year, but it won’t happen every month,” he says. “But it’s a good bet retail sales will outperform fleet this year, while last year fleet was up.”

Although retail car deliveries were positive, it was the truck side of the business that fueled most of Ford’s January sales gain.

Particularly strong performers included the F-Series pickup, up 28.1% to 33,585, and the Econoline fullsize van, up 29.4% to 6,139. The Transit Connect small commercial van also saw a solid month with a 78.4% increase to 2,072.

January truck results bode well for the future of the products, Czubay says. “Sales in the truck category show commercial demand continues, and we believe that’s a harbinger of business recovery in those segments.”

Ford says it finished January with 409,000 vehicles in inventory, with 151,000 cars and 258,000 trucks.

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