Ford Motor Co.'s sales fell nearly 9% year-over-year in September amid continued supply constraints but were up 16% in the third quarter, according to sales numbers released Tuesday.
The Dearborn automaker sold 142,644 vehicles in the U.S. last month, down 8.9% from September 2021. For the quarter, Ford sold 464,674 vehicles — below some analysts' expectations but up from the 400,843 it sold during the July-September period last year.
The results come one day after much of the rest of the auto industry reported mixed results for the third quarter — and as analysts and dealers say they're starting to see the effects of rising interest rates on consumer demand, even as supply remains one of the industry's biggest challenges. Interest rates for auto loans hit their highest level since 2019 in Q3, according to Edmunds.com Inc.
Industry analysts have lowered their sales forecasts for the year as supply challenges persist and signs of lower demand start to percolate. Cox Automotive, for example, recently lowered its full-year sales forecast to 13.7 million vehicles and said fourth-quarter sales would be constrained by "high prices, tight inventory and softening demand." Cox projects full-year sales will be down 9%, to their lowest level in a decade.
“The supply shortage has likely created some pent-up demand — folks who were essentially waiting in line for inventory to return," Charlie Chesbrough, Cox's senior economist, said in a statement ahead of sales numbers being reported. "But the recent changes in the economic outlook from rising interest rates is beginning to chip away at demand, and the waiting line for new vehicles is likely getting much shorter.”
General Motors Co.'s quarterly sales were up 24% year-over-year, while Jeep maker Stellantis NV's were down 6%.
Toyota Motor Corp.'s third-quarter U.S. sales fell 7.1%. Honda Motor Co.'s dropped 36%, though the automaker said it saw improvement in September. Hyundai Motor Co. saw sales grow 3% year-over-year in Q3. Volkswagen AG's U.S. sales were up 12% for the quarter.
Meanwhile, investment research firm CFRA Research on Tuesday reaffirmed its "buy" opinion on Ford's stock and maintained its 12-month price target of $18.
"With Ford having already warned of cost headwinds and supply chain issues, which will negatively impact Q3 earnings, we view most near-term risks surrounding the story as priced in at current levels, creating a buying opportunity," analyst Garrett Nelson wrote in a note Tuesday. "Furthermore, we consider the stock's dividend yield of 4.9% highly compelling after its recent 50% dividend hike announcement."
A September sales drop
Ford pointed to supply shortages and a larger than expected inventory of unfinished vehicles for the sales slump it saw in September.
Last month, Ford warned investors in a pre-earnings update that it was experiencing supply constraints and could have as many as 45,000 vehicles built but awaiting final parts to end the quarter. It expects to deliver those vehicles to dealers in the fourth quarter and reaffirmed its full-year earnings guidance.
The automaker had gross vehicle stock of 315,000 units at the end of the quarter, with 45% of that on dealer lots and the rest in transit, according to the company.
The automaker's September sales in the truck segment were down nearly 19% year-over-year. SUV sales were up 0.9%.
Ford's electric vehicle sales were up nearly 200%, to 4,691 units. The automaker retained its status as the No. 2 EV brand in the U.S., behind industry leader Tesla Inc. Ford's share of the burgeoning EV segment rose 3.1 percentage points to 7% in September, driven by sales of Ford's all-electric Mustang Mach-E as well as growing sales of the F-150 Lightning pickup and E-Transit cargo van.
"Ford continued to see high-demand vehicles turning at record rates in September, while developing electric truck and van leadership and extending our overall truck leadership," Andrew Frick, vice president of sales, distribution and trucks for Ford Blue, said in a statement. "We are very pleased with the work from our dealers, employees and the area's first responders, as they are working tirelessly to recover in Florida from Hurricane Ian."
One of the hottest (and most affordable) products in Ford's portfolio, the Maverick compact pickup truck, turned on dealer lots in an average of six days last month. More than 80% of Maverick buyers are first-time truck buyers and are coming from vehicles such as the Honda CR-V and the Toyota RAV4, according to Ford.
And when Ford opened the 2023 order bank for the Maverick for just a week last month, it got more than 86,000 orders — a new record, the automaker said.
In the SUV segment, monthly sales were up for the Ford EcoSport, Escape, Bronco and Mustang Mach-E. They were down for the Bronco Sport, Edge, Explorer and Expedition.
In the truck segment, Ford's flagship F-Series pickup lineup — the company's profit driver — saw sales fall 26.6% last month. The company sold 1,918 all-electric F-150 Lightning trucks, bringing the year-to-date total to 8,760 units.
Sales of the Ranger, E-Series, Transit and heavy trucks were down. Sales of the Maverick and Transit Connect were up.
In September, sales of Ford's luxury brand, Lincoln, were down 12.8% year-over-year. A bright spot was the Lincoln Aviator, sales of which grew 21%.
'People still need cars'
The September results come after Ford reported year-over-year sales growth in both July and August it attributed in part to better inventory flow — helping to boost results for the quarter.
Ford reported Tuesday that retail orders for 2023 model year vehicles are up 244% over 2022 model year vehicles, for a total of 197,000 retail orders. Ford, along with other automakers, has increasingly moved to having customers pre-order vehicles before they're built as the global semiconductor shortage and other supply chain disruptions have left car dealers with empty lots. September marked the sixth straight month where Ford saw more than half of its retail sales come from previously placed orders, the company said Tuesday.
Ford highlighted its hybrid vehicle sales, which it said totaled 74,046 units through September — up 22.6% over last year.
Ford sold 18,257 EVs in the third quarter, or roughly 4% of its total sales, according to sales reports from the last three months.
Year to date, Ford's sales are down 1.2% from the first nine months of 2021.
Jim Seavitt, owner of Village Ford in Dearborn, said his sales were down in September compared to a year ago, but noted that September 2021 was a great sales month. Last month, he was happy with 210 new-vehicle sales and about 115 used — and with the fact that the dealership had its best-ever body shop month.
He's starting to see signs of the used-vehicle market softening, but nothing to indicate that demand for new vehicles is waning. He has some 900 vehicles on order for customers and has no trouble selling the roughly 200 vehicles he gets in stock each month.
“My month depends on what I’ve got coming in. As long as the flow keeps going … we’ll be fine," he said. "And people, they still need cars.”
