Ford April 2012 Sales Figures

[fordmantpw]

Not picking a fight, but I’m not so sure it is that simple –

If my company typically sells 100k widgets in a given period and my competitors sell 80k widgets – then the market increases by 20k and I sell 105k widgets and my competition sells 95k widgets – I am not sure I could walk into the meeting and say we are doing great, especially if I have to speak to that line chart.

But we were capacity constrained! Yes, not the worst problem to have, but there are many facets to an enterprise in order for it to succeed at the expense of its competition. An accurate market demand forecast is one area, and apparently Ford did not execute well here.

Those last few months on the posted line chart are cause for a bit of alarm. Not the sky is falling, gloom and doom, or Ford should still offer an obsolete small truck (although a competitive one would be nice), but certainly a bit of alarm. Other product lines, notably Toyota, offer more variety and somehow appeal to younger buyers even though their product does not clearly win in any single category. An earlier post showed they are lower in incentives also. Toyota’s profit forecasts are plenty healthy for the upcoming year, so that card is not worth playing. It clearly appears that they are gaining at Ford’s expense – or due to Ford’s inability to respond to increased overall market.

In the next few months we will be chanting: We’re number three, we’re number three, and we’re number three!

Controlling growth, embedded with continued quality and profitability are great challenges for any company. As I see it, this is why guys like Mulally and Farley make the big bucks. I am a big fan and eagerly wait to see how they respond – tactically and strategically.

 

But if you are building 105k widgets, and you have the capacity to production 107k, you are doing great. If you have to open another plant to produce more, your profit per piece goes down, and you don't know how long the market is going to support 200k widgets being sold.

 

Now, let's say your competitor just opened a new plant, and they have to add an extra couple dollars in rebates to those widgets in order to gain those 15k in sales. Who is doing better?

 

We don't know the profit numbers on vehicles, and the total costs with expanding production to support more sales, only Ford knows this. And they are playing it cautiously in the volatile market. It is always better to run a sustainable business at #3 than an unsustainable business at #1!

[akirby]

Gaining market share usually has costs. Do you have to advertise more? Do you have to add a shift to the plant? Do you have to add a new plant? Do you have to add $3K in rebates? That cost must be weighed against the potential gain.

 

It's virtually guaranteed that Ford is saving money by closing the Ranger plant. So Ford saved money by killing the Ranger and they made more profit on F150 due to increase sales (I assume market share for the F150 stayed the same or grew slightly).

 

I predict that Ford will have a F series truck that gets better fuel economy than the T6 within 2 years, making the T6 irrelevant to the U.S. (NA?) market in its current form. We might also see a unibody based small truck that gets even better mpg but I don't think the market is big enough to support the investment if a full size or almost full sized pickup can get 20+ mpg.

[jasonj80]

There was an MCE for both ready to roll out last year which was pushed back for whatever reason. That MCE (new engines, front clips, and interiors) was set to carry through 2015 or so, when an all-new version would debut on the new F-150 platform.

 

The MCE may have just been delayed to next year, perhaps allowing them to stagger the launch of the new model behind the F-150. I've heard that the longterm future of both is simply "under review" (which isn't really that telling, everything is always "under review").

 

http://www.freep.com/article/20120503/BUSINESS0102/120503008/Ford-Faurecia-auto-components-plants?odyssey=tab|topnews|text|FRONTPAGE

 

Maybe I'm reading too much into it but the article states the new plant in Detroit will start making Interiors for the Expedition and Navigator in August -- Job 1 for the 2013 Expedition/Navigator is Late Aug, guess we'll know when the Order Guides are released in June.

[PREMiERdrum]

http://www.freep.com...|text|FRONTPAGE

 

Maybe I'm reading too much into it but the article states the new plant in Detroit will start making Interiors for the Expedition and Navigator in August -- Job 1 for the 2013 Expedition/Navigator is Late Aug, guess we'll know when the Order Guides are released in June.

 

I don't know that this necessarily means these models will be new, only that their interior components would now be assembled by the new partnership...?

 

Andra Rush said the DMS plant will do injection molding, assembly and sequencing of automotive trim parts and initially provide cockpit interiors for the Ford Mustang, Expedition and Navigator.

[mettech]

Ford is growing at a rate they are comfortable with. Who's to say that Ford would be making as much money if they simply focused on volume growth? You are looking at it in a very one-dimensional manner.

 

I suppose my point with the argument/discussion is this:

 

The best comparison in business is not how you are doing today vs a few years ago, but how you are doing in today's market compared to your competition.

 

Every trend I have seen about Ford recently appears to me Ford is starting to slide going backward.

 

Profits

Sales

My Ford touch

Dual Clutch Trans

Market share

Rebates

 

Inversely, it appears that VW is heading in the right direction. If VW is kicking ass in Europe... why not Ford?

[Edstock]

I suppose my point with the argument/discussion is this:

 

The best comparison in business is not how you are doing today vs a few years ago, but how you are doing in today's market compared to your competition.

 

Every trend I have seen about Ford recently appears to me Ford is starting to slide going backward.

 

Profits

Sales

My Ford touch

Dual Clutch Trans

Market share

Rebates

 

Inversely, it appears that VW is heading in the right direction. If VW is kicking ass in Europe... why not Ford?

Isn't it nice that all this new product is coming? Of course, you're aware that the Fusion/MKZ aren't in the showroom yet, nor the new Escape, and of course you're aware of the new product that's coming.

 

Ford is in transition. If market share is stagnant or declining in 24 months, then start bitching. Until there's more new product, things aren't going to change much.

 

As to Europe, kudos to VW. Whether or not they can continue as the EU slides into deep recession, remains to be seen. As to why not Ford, of course you remember how Ford EU was nearly destroyed in the 90's, unlike VW, but then, you knew that, didn't you? So it's no surprise the re-build is taking time. You know, it will take another 10-15 years, just like it took Audi to re-build in the US.

[jpd80]

So, what is VW group's 2012 Q1 figures like, does anyone have it?

[mettech]

Isn't it nice that all this new product is coming? Of course, you're aware that the Fusion/MKZ aren't in the showroom yet, nor the new Escape, and of course you're aware of the new product that's coming.

 

Ford is in transition. If market share is stagnant or declining in 24 months, then start bitching. Until there's more new product, things aren't going to change much.

 

As to Europe, kudos to VW. Whether or not they can continue as the EU slides into deep recession, remains to be seen. As to why not Ford, of course you remember how Ford EU was nearly destroyed in the 90's, unlike VW, but then, you knew that, didn't you? So it's no surprise the re-build is taking time. You know, it will take another 10-15 years, just like it took Audi to re-build in the US.

 

Ed.. you would be an easy guy to work for.. ..

[mettech]

So, what is VW group's 2012 Q1 figures like, does anyone have it?

]

 

BERLIN (AP) -- German carmaker Volkswagen AG says its first quarter net profit nearly doubled to €3.19 billion ($4.2 billion) from €1.71 billion in the same period the year before following a big spike in sales.

Volkswagen group — which also includes brands such as Audi, Skoda, Seat and Bentley — says sales rose by 26 percent from €37.47 billion to €47.33 billion on the year.

The Wolfsburg-based company says Thursday the delivery of new cars to clients rose from 2 million to 2.2 million units in the January through March period.

CEO Martin Winterkorn confirmed the company's bullish outlook for rising sales in 2012 despite the uncertainties stemming from Europe's persistent sovereign debt crisis.

[RichardJensen]

An accurate market demand forecast is one area, and apparently Ford did not execute well here.

 

Wrong.

 

Ford knew what the market was going to do, in fact, Ford probably has the best economists and market forecasters in the NA sector.

 

 

Their failure to pick up market share by any means necessary, and their failure to put off major factory upgrades to punch up the numbers for the chattering classes on internet forums, should not be taken as proof that they made mistakes.

[aneekr]

I suppose my point with the argument/discussion is this:

 

The best comparison in business is not how you are doing today vs a few years ago, but how you are doing in today's market compared to your competition.

 

Every trend I have seen about Ford recently appears to me Ford is starting to slide going backward.

 

Profits

Sales

My Ford touch

Dual Clutch Trans

Market share

Rebates

 

Inversely, it appears that VW is heading in the right direction.

 

Your concern is well founded, and is corroborated by the recent performance of Ford common stock compared to Volkswagen AG's. F closed below $11/share today and is up 1.5% YTD. VLKAY closed at $34.79/share and is up 30% YTD.

 

It remains to be seen how fundamentals play out for the remainder of the year. As I mentioned in another thread, I'm doing a long straddle on F with the May options at $13 strike price using the puts and ignoring the calls.

Edited May 3, 2012 by aneekr

[RichardJensen]

I suppose my point with the argument/discussion is this:

 

The best comparison in business is not how you are doing today vs a few years ago, but how you are doing in today's market compared to your competition.

 

Every trend I have seen about Ford recently appears to me Ford is starting to slide going backward.

 

Profits

Sales

My Ford touch

Dual Clutch Trans

Market share

Rebates

 

Inversely, it appears that VW is heading in the right direction. If VW is kicking ass in Europe... why not Ford?

Garbage.

 

What about EB? What about fuel economy? What about hybrid technologies? What about fit and finish? What about transaction prices?

 

Your five item list is about as accurate a summary of a company the size of Ford as your shoe size is an accurate summary of YOU.

[RichardJensen]

Your concern is well founded, and is corroborated by the recent performance of Ford common stock compared to Volkswagen AG's. F closed below $11/share today and is up 1.5% YTD. VLKAY closed at $34.79/share and is up 30% YTD.

 

It remains to be seen how trends play out for the remainder of the year. As I mentioned in another thread, I'm doing a long straddle on F with the May options at $13 strike price using the puts and ignoring the calls.

Again, garbage. Stock price is a worthless indicator of a company's future outcomes. If it were, there wouldn't be any point to your short term investing.

 

And to address this VW that you and mettech are so fond of: Their accounting is opaque, their core operations are in a market that has probably peaked, and is currently in the middle of a recession. And "blah blah blah blah" regarding their NA ops. Their US sales were so crappy, they can't help but improve. As recently as two years ago, Ford sold more F150s by September than VW sold cars over an entire year. And watch them stagnate again, once their crappy quality turns off another generation of buyers, and that horrible VW service prematurely ages another round of VW owners. VW is an arrogant ossified uncompetitive company, and given time, they'll revert to mean. They haven't changed just like GM hasn't changed.

Edited May 3, 2012 by RichardJensen

[RichardJensen]

BTW: My apologies for the brusque tone of the above responses.

 

Rudeness aside, I see absolutely no reason to extrapolate a serious decline from a set of cherry picked and rather vague concerns, especially concerns that have by and large been addressed. Nor do I feel like jumping on the VW bandwagon because of how messy their accounting is and how little has changed in how they do business.

Edited May 3, 2012 by RichardJensen

[akirby]

Volkswagen group — which also includes brands such as Audi, Skoda, Seat and Bentley — says sales rose by 26 percent from €37.47 billion to €47.33 billion on the year.

The Wolfsburg-based company says Thursday the delivery of new cars to clients rose from 2 million to 2.2 million units in the January through March period.

 

A 26% increase in revenue from a 10% increase in sales volume?

[RichardJensen]

A 26% increase in revenue from a 10% increase in sales volume?

Yeah? Wait till you read their quarterly financial release: http://www.volkswagenag.com/content/vwcorp/content/en/investor_relations.bin.html/superteaser/tabs/tab/highlight/links/link_0/file/Adhoc_Volkswagen+AG_26.04.2012+-++Englisch.pdf

 

Basically, it amounts to: "Money is good, and we are awesome."

 

You'll look long and hard for an explanation of how they managed to achieve €3.2B in operating profit while clearing only €2.9B in cash flow, and you won't find one.

[jpd80]

Yeah? Wait till you read their quarterly financial release: http://www.volkswage...- Englisch.pdf

 

Basically, it amounts to: "Money is good, and we are awesome."

 

You'll look long and hard for an explanation of how they managed to achieve €3.2B in operating profit while clearing only €2.9B in cash flow, and you won't find one.

would that be conjuring an increased profit through tax credits for losses somewhere?

[jpd80]

VW group also seems like a larger version of PAG riding a wave of success....I wonder..

[RichardJensen]

would that be conjuring an increased profit through tax credits for losses somewhere?

Those aren't typically considered 'operating profits'.

 

Granted, VW did purchase a stake in a subsidiary, but their cash flow was still down significantly from a year ago, while profits were up.

 

VW reported €11.3B in profit in 2010, and ended the year with €1.6B less cash on hand (17.0 vs. 18.6B), and they had €1B less cash on hand after Q1 2012.

 

So, over the last five quarters, VW has seen its cash on hand shrink 14%, all while claiming 'record' operating profits, etc. The Q1 2011 to Q1 2012 comparison shows a nearly 20% drop in cash on hand.

Edited May 3, 2012 by RichardJensen

[2005Explorer]

Did that hurt the new Explorer?

 

The Explorer line has always received updates about every 5 model years. The version before the current one was from 2006-2010. I don't think that was really stretching that far. The current Expedition and Navigator have not received any changes since 2007. If they plan on leaving them as is until the 2015 model year that is a long time, especially with GM launching new full sized SUVs next year.

 

It was mentioned that the facelift and powertrain updates were ready to go, but then not launched. If the engineering work is done why not launch them? There is still a demand for these vehicles and YTD they are still outselling the Flex and MKT which were deemed popular enough and worthy of an update.

 

I understand that you do not want to see these vehicles updated until they are replaced in 2015, but if the plans are ready to go why not? The new engines are far superior to the old 5.4L and considering how outdated these vehicles are I'm surprised they still sell as well as they do.

 

Without any updates the new GM full sizers will probably be the last nail in the coffin. I know their sales numbers are not big, but those things have to be profitable.

[aneekr]

What about fit and finish?

 

This is one area I hope Ford expends a little more attention to detail. Below are a few personal and anecdotal examples, from a recent visit to my local Ford dealer in the Twin Cities area:

 

2013 Taurus, note the alignment of the passenger door:

 

Close up of window surround on the above Taurus:

 

'12 Focus hatchback - fuel filler door misaligned to the extent that it grates against the taillamp lens upon opening/closing:

 

For comparison, here's a properly aligned fuel door on another Focus (the one in the reflection, actually):

 

Poor fitment of vent bezel on a third '12 Focus:

[2005Explorer]

This is one area I hope Ford expends a little more attention to detail. Below are a few personal and anecdotal examples, from a recent visit to my local Ford dealer in the Twin Cities area:

 

2013 Taurus, note the alignment of the passenger door:

 

Close up of window surround on the above Taurus:

 

'12 Focus hatchback - fuel filler door misaligned to the extent that it grates against the taillamp lens upon opening/closing:

 

For comparison, here's a properly aligned fuel door on another Focus (the one in the reflection, actually):

 

Poor fitment of vent bezel on a third '12 Focus:

 

Those all look very minor to me and the dealer probably could re-adjust for the most part.

[aneekr]

Those all look very minor to me and the dealer probably could re-adjust for the most part.

 

I agree. Nonetheless, my observations (anecdotal, of course) indicate that many other mass market brands have more consistent fit and finish with their cars. I'd simply like to see Ford demonstrate class leadership in this area, if for no other reason than the fact that first impressions of a product are vital in automotive retailing.

[mettech]

Garbage.

 

What about EB? What about fuel economy? What about hybrid technologies? What about fit and finish? What about transaction prices?

 

Your five item list is about as accurate a summary of a company the size of Ford as your shoe size is an accurate summary of YOU.

 

 

 

http://www.youtube.com/watch?v=vzcWPKAv2Ow

 

Richard,

 

For the past 5 quarters.... do you see a negitive trend with anything at Ford?

 

 

http://online.wsj.co...html#autosalesA

Edited May 4, 2012 by mettech

[akirby]

It was mentioned that the facelift and powertrain updates were ready to go, but then not launched. If the engineering work is done why not launch them? There is still a demand for these vehicles and YTD they are still outselling the Flex and MKT which were deemed popular enough and worthy of an update.

 

Exactly. Why not launch them? What could those idiots possibly be thinking?

 

What it usually means is they decided to move up the new platform sooner so it wasn't worth doing a refresh. I keep telling you that Ford has limited resources and in order to add resources to a new project they have to kill others.

 

The point is - they wouldn't do this without a very good reason.

 

 

I understand that you do not want to see these vehicles updated until they are replaced in 2015,

 

How can you understand that when it's not true? I never said or implied such a thing. I would have loved to see them updated 2 years ago. I'm simply trying to interpret Ford's decision.

 

Without any updates the new GM full sizers will probably be the last nail in the coffin.

 

So what's going to happen? Is the world going to end? Is Ford going out of business? Will penguins stop wearing sweaters?

 

And what would have happened if they had launched the refresh? A mild sales uptick? It's not like new engines and tweaked styling would have doubled sales.

 

Most likely what this will do is allow Ford to bring out the all new platform a year sooner than they would have been able to do otherwise and that is probably worth way more than they'll lose by cancelling the refresh.