Another Strong Debut for Ford


Despite analyst concerns and a warning from the CFO, June turned out to be a decent month for Ford (NYS: F) -- at least here in the United States. The Blue Oval posted a 7% year-over-year sales increase for June, trailing the overall car market's 22% gain -- but well ahead of analyst expectations.

Analysts expected Ford's gain to come in considerably lower -- under 4% -- but a warm reception for a new model helped the Blue Oval's results and bodes well for its prospects as the year goes on.

A promising debut for the new Escape
Ford's sales summary noted that sales of the small Escape SUV were up 28% on the month. That's a great result -- the best-ever month for the model -- but at first glance it's one that's easy to dismiss: The Escape, like the Fusion sedan, is an outgoing model. Ford has been in sell-'em-off mode for the past couple of months, as it works to clear out inventory to make room for new models. The result has been good deals for buyers, brisk traffic for dealers, and big sales numbers for Ford.

But while the all-new Fusion is still a couple of months away from showrooms, new 2013 Escapes have already begun arriving at dealers -- and the early results are very promising. Despite concerns that the sharply styled new models would alienate fans of the old Escape's homely, boxy lines, the redesigned Escape is already selling at a bold clip.

Ford said it sold about 11,000 of the all-new Escapes in June, 40% of total Escape sales. Demand has been very strong, with vehicles spending an average of just 4 1/2 days on lots -- far below the industry norm, and below the average posted by the smash-hit Explorer when it debuted early last year. One dealer interviewed by the Detroit News said that he had customers waiting in line just for a chance to test-drive the new model.

Ford had a 30-day supply of 2013 Escapes as of the end of June, well below the 50 to 60 days' worth that most automakers prefer. That number will grow in time, but so far, it's looking like Ford has another hit product on its hands.

Solid results across the line
What else was good? Sales of the Focus compact were about on par with last year's results -- but that's not all bad, as sales boomed last year while Toyota (NYS: TM) and Honda (NYS: HMC) struggled to restore production in the wake of the Japanese tsunami. Fusion sedan sales were up more than 17% in June -- another strong month for the midsized model. Fusion sales have been very strong in recent months, though there again Ford's efforts to sell down inventory likely helped that total somewhat in June.

But what were particularly strong were Ford's truck and SUV sales. Ford's flagship F-series pickup posted its best June in five years, continuing a trend of strong pickup sales seen last month -- though General Motors' (NYS: GM) pickups saw much less impressive gains in June. Meanwhile, the Explorer SUV posted a 34.5% year-over-year gain, with sales just a few hundred shy of last month's, the current vehicle's best month yet.

Ford has hinted that production of the Explorer and Focus are nearly maxed out. That sounds like a good problem to have, but it means that sales gains for the two popular products may be minimal without significant investment in additional assembly lines.

It also means Ford will have to find growth elsewhere, at least in the near term. The good news is that the new Escape is off to a promising start -- and the new Fusion should see a similarly strong debut this fall.

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At the time thisarticle was published Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at@jrosevear. The Motley Fool owns shares of Ford.Motley Fool newsletter serviceshave recommended buying shares of Ford and General Motors, and have recommended creating a synthetic long position in Ford. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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