F - Earnings call transcript Q3 2019

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Operator

Good morning, ladies and gentlemen. My name is Lori, and I will be your conference operator today. I would like to welcome you to the Ford Motor Company Third Quarter 2019 U.S. Sales Conference Call.

At this time, I would like to turn the call over to Mark LaNeve, Ford, Vice President U.S.

Service. and Sales Marketing,

Mark LaNeve

review and closing XXXX everyone good U.S. and XXXX. we quarter with Lori about And Ford’s position the our to welcome year third everyone as and third the quarter sales closer recap progress good you, year-to-date. and talk to morning move to reconnect our out Thank call. into It's and

Ford overall sales talking industry, begin for like by a a little review about into to quarter. of will which third the performance take the us I'd bit

finish Our lineup transition progress and how as the we transform we're our positioned year. as out we

Hard despite we think supported It's been my downside convinced lots up is in that of to real -- almost industry a volatility I being or we is with into takeaway would is confident. be have consumer And the issues at historic that data wage that flaring Unemployment pressure, year. the that believe think the I’m lows, cause haven't we're news you would seen and by main remains continues the who already I've solid, but really daily, quite seen very growth. it. industry the October. to interesting solid actually just

vehicles. levels. all historically gas been those at they buying people feel future prices has jobs the remain the secure and rates low and experience It Also, and have my they're despite then in when interest noise jobs, and confident about

All support straight now the fifth million of industry is these what are for plus tailwinds combining to level XX our year. to

and XX.X September heavy industry million medium including at through running the a believe we fact, In trucks. level, is

yesterday four but do I Labor And to a to just a make which month important into as the remember comment though, headlines a rise quarterly was reporting Let it September. Labor me Day, this and major selling is want a sales that sharply weekends month was difference. this last of for a September make it's a industry. quite big five-weekend which negative down holiday. Day, of of included I But with a few on call, in makes is saw note XXXX no special August. September a year XXXX, calendar year

X%, may for number, weekend it's we both weekend them four X% we're make Day, you no that in to In about Labor very the industry up the third basis retail evaluating factors months And was Both flat X.X% month, together when believe huge down post August difference. which five for September, retail QX. Labor you month, industry, quarter of the well and estimate the Day, up year-over-year. to be performance have fairly a fact, but sales a two positive going confident were I year-to-date on do, fact to in essentially the grow

but Obviously growth rate be sales discipline volumes a what it's against very we year sign a the Fleet gain to from a continue as estimated have front. QX industry. slowed in fleet positive year this quarter, comes about be with see the will bit QX incentive The third of up a in to unchanged X%. on may ago. strong This for be to continue the

back and country, benefit remember The large this a commercial growing Commercial vehicles that While that continuing profitable out Ford sales. we for I'll not that to in important opportunities the fleet being provides big fleet in the fleet one activity. they're the this with daily brand growth industry, growth in confused minute. from year it’s future is we will commercial see the Ford, into come best-selling space a overall gets just the often component rentals, only of of with to rental component are daily only

XX,XXX that or year quarter, continue last year, last compared a when of a and out needs of strategic number year it as this late began third all today's the into a cars SUVs. you our to and This X.X% the move quarter serve really Ford as of and that and to we're dramatically year and that past favor units improved as make were we SUVs. really up efficiency trucks recently lineup we really better by with year. transition Lincoln it’s describing to okay In Ford as it's as and represents a move was Actually, an the sales accelerates functionality their new they customers second to

volumes. out our third vehicles to Combined year zero all-new in of sales phased three came Taurus XX,XXX of Focus, in the C-Max relative ago. represented way down be transition essentially sales year, the sales exclude these Focus Explorer. during three performance our sales vehicles quarter the of large last excluding and of Taurus year-over-year up changeover X% QX planned our and the is and to One The C-Max instead the and from X.X% these this to declines with year, associated would evaluate

outside a a in planned of strong look Taking very at current SUV Explorer, the quarter. overall our our lineup of deeper performance, changeover saw SUV

in mind SUV XX% level were XX% gain half years sales QX. almost Year-to-date of XX coming from for under the entry Expedition demographic old. ago. posted sales quarter to younger high continue much a be year EcoSport with Expedition a up an Our versus the XX% sales

Sales year. demographic a A the These XX,XXX newer EcoSport portfolio speed good for Edge strength are than XX%, and at and in running than full analyze to just sold with over to XX% Sales our up are this way SUV combined units part vehicles more XX,XXX QX, were year up our Expedition sold illustrate continued all XX%, of in quarter. units SUV our more of lineup Expedition, level. Ford that up sales. our Edge the is in ago for combined

SUV lineup accelerating freshest industry's build we SUVs of line and our through to of XX% these and momentum a will into favorably as has move at three in that strong growth been of really we This represents the and performance year-end increase XXXX. models, compares on QX

there comment It's launches. important me are on to Explorer very kinds two industry. of important vehicles launches middle remember are our Let of Escape two in and that in

most and on changes, and existing lineup, when technology, perhaps you so improve the first exterior but and do common make powertrain design The platform. tweak in is interior

These that looking we new are current the and system and we many can the have the will away same launch our far in exact we assembly execute industry. last the this all-new new shipping XXXX the in on Escape. begin the We and model biggest easier same that it most to to the in time. the of common selling the In is the at as prototypes great week model. Escape year cases, do this as and heart This compete industry build are really forward with segment and model

build this The platform, center an you the and to other launches completely kind within plant all the of basically walls of all of or when with have kind to out equipment all-new pull assembly a existing launch, new your you install new existing an shift of plant.

to this drive is Chicago of to two F-XXX shift As we this at you alloy ambitious within assembly center. It back rear able year this remember XXXX. all centers an we of we've launch aluminum kind our with all new had assembly that new execute Explorer platform is in with the what as were walls

of really mean was kind with We we kind just We know downtime our achieve as and it it deliver build world felt this the Explorer that right we of choice love. want of would did F-XXX. will the winning to knew SUVs launch kind competition customers of the portfolio we differentiation and that as the our class

The rate performance a in having XXXX high dealers, Escape ST good far performance critical a in and two good and QX sales high news to lineup much with initial transformer flowing model looking in very we effect the along models, the line is all now youngest the building a the industry. to into have very to new high these our when a forward we're of sales expanding also had of we're the end [ph] strong forward sign. Platinum series and volume XXXX. that's Explore and SUV the Explore, stronger new take that and the we have in sufficient launch Bottom and on of we're now all-new inventory in trim seeing Of look

trucks, our had another Moving truck on business quarter to great QX. in with accelerating sales

third compared just up truck quarter X% trucks our that in XXXX. sold vans second and X% quarter, sales represents a than more X% to best with were since overall performance growth total QX, Our the rate in and XXX,XXX growth

For the our pace year, our on to leadership XXX,XXX have business through this more million year, sold trucks, than X.X growing solidifying putting position. more trucks sell us than further September, and we

best the Through their XXX,XXX a just from expand pickup the end trucks the pickups F-Series of some position more into this including deeper Ranger in quarter little trucks to truck XXX,XXX quarter XXX,XXX a F-Series decade, the in leadership sales and had QX at total of September, numbers, at than end performance to sold. continue September. with of our growing lead over Getting third

the Silverado. prices key continues data all prices and that We've than RAM spending, one this F-XXX over transaction point with new higher higher fact accomplished incentive lower and is $X,XXX to in at transact

vans. up new on in be set F-Series van expands sales in its While XX% compared left Ranger leadership of sales Ford to position, XX,XXX out, of an third quarter to XX,XXX QX. its grew with record Not pickups XX,XXX QX, sales all-time

sales exceptional of vans. the is and To kind the turn to our last in solid of on leader Through this overall unprecedented. smaller sales van of Connect Transit, XX,XXX, up vans gain of Transit is September growth the world's a saw our XX,XXX. XXX,XXX over growth sales cargo be We sales Sales of achieve Transit XX% van year. increased X% best-selling a business XX% in segment in

It in need the a vehicles seeing delivery the package and all leadership, vehicles. activity some van our and our what can in this case, changing e-commerce the you mentioned I impact market for become major about to previous in calls need increased business. have of the kinds. we In of growing conditions beneficiary growth and connects have delivery for e-commerce When of the back vans do are

of to premium continued momentum, to push is performance XX% quarter long This Lincoln along, all to to sales our sales result XX,XXX as the on ever launch and in Overall with up and the we we've segment. Corsair. best strategy on highly third expanding only Ford continue Moving SUVs. just sales some the are such since SUV on Lincoln's Lincoln SUV momentum SUV XXXX, segment, XX%, more of anticipated focus third year product experienced new on products and up Lincoln, sales the we've quarter our of reviewed than Aviator begun

recently We vehicles a course, advertising with more model. XX about in McConaughey that's the quarter website. we Lincoln in delivered television launched McConaughey, as, We all campaign spots. all-new quarter X,XXX you've to line an to of the probably Matthew are partial first with which up new And In Aviator our Aviator spot an million added XXX% sales, the more gallery the than the increase seen a Lincoln day on views YouTube. had visits incremental

fourth the sales an time seeing take SUVs, month an last our for At are compact we big hitters now in that XXXX. we're new Lincoln and the will of We all certainly of as all exciting at to both the love quarter end Lincoln replacing provide began brand. and the particularly premium, lift for stage luxury MKC. Aviator first market. this for our extra the our momentum Corsair at is with Lincoln we our off very Corsair with It's of This coming really quarter the SUV

I'd you With calls Lorie to community. back to all. some taking analyst to Thank call like turn from the the that, start

Operator

America. Instructions] of John first Murphy [Operator the of question Bank of line Our comes from

John Murphy

Good Thanks morning, all Mark. detail. for the

versus of question spring weight a in going vehicle Just higher. X,XXX retail I'm benefit fleet gross this once sort off really retail on the the of like the fleet It or to vehicles of of dynamics. kind people year seems with sort expensing -- sorry, on to first get took pounds year lease versus the of dynamic accustom of the first

fleet And are how then taxes, baked be? often you the curious, affectionately you also I'm in you I’m you're you what the get great just that the -- mean, in is also will retail. I fleetail fleet [ph] vehicle trying seeing of change where to sales much benefit or to sales there benefit benefit just as into of think sustainable and side this it understand some house? referred that how commercial

Mark LaNeve

thanks noticeable question. change We from the didn't difference John, to the QX tax for see QX. any

down timing up as in a ran in commercial in pure business QX in stronger Our business -- QX, excuse rental. was is rental me, it and On on was our basis QX. was QX we

and have XX% As two. sales timed we stronger half indicate, we that one run out than total half a we'd it about of

business way it -- was commercial in Explorer, But on reason on and QX same down way our again large the was commercial on Explorer. down by and was strong down retail was

that So you number didn't commercial the see we'd QX in indicating have that QX. changes I tax you're up to and any been factor up difference significantly affect from relatively

John Murphy

Apologize, QX some benefit how just you should say the a is curious, just small started kind has for in Mark, lot of the it's this vehicles. because businesses perception. cheaper have and of your that's sort I'm sustainable or a benefit the to would think year-to-date? had sort I of better And of buy much of fleets thing this on

Just curious see there's if you general impact. any

Mark LaNeve

huge of fleetail dealer being products, is business we but we're up benefiting than we've on a because got some that more helpful, it's number believe on Amazon America. companies, of all and -- van and too, that’s those e-commerce which and is the addition in small I over think delivering things Yes, to I it's working just sharply mainly benefit the main think contracts large

in So a tailwind, to some to a it's it's getting major activity you helpful, leadership to think I but don't store the to buy think beneficiary key think used it’s it, driver everyday I tax go van we're around is and I that macro with a shipped position. environment the economic

John Murphy

know as it's sort business is that to less? to something I XX fleetail points that, of tough like X I it inside something of retail, it points, or is glean that retail, mean, And is or it portion is what of guesstimate any more

Mark LaNeve

We or believe a right take around points give couple XX%.

John Murphy

Got it.

is lastly, but there's loan loan in I or of credit doesn't then so much concern And that really Ford terms, lot Motor seem it playing around mean, terms game. extension just a Okay. extension of

Motor going what's there and on view on how your is curious, you Just Ford? approaching Ford credit for

Mark LaNeve

the to below seen lookouts our XX%. things for in down credit with would of that terms really We actually quarter it is look penetration haven't you the like the lease XX%, in spike We've been really seen XX and we’re our below very and paper delinquencies haven't and consistent any in at we consistent the at and terms all. -- writing of are months

looks credit standpoint of would worthiness good really problems a seen, from credit and think from that So the we of an anything the be indicator you just side. haven't John,

John Murphy

you Mark. it. Thank much, Got very

Mark LaNeve

Thank you, sir.

Operator

line Credit from Our of the next of question comes Dan Levy Suisse.

Dan Levy

morning. thanks taking for good And questions. Hi, the

you're you are ask new to First, through vehicle. about the and your just out cadence just and Explorer down sell down the but as this that the I or sales in the planned, just sell go Sedan sales -- wanted part of think pointing down, your is of -- yes old working what part to

done you're interpreting to this of So with negative Escape? complete? sales just that mostly Explorer through as the through year-over-year be that to should we now when launch mostly especially SUVs And series mostly should wondering and expect A, it Sedan we your work relates are Explorer now for we correctly be issue that you large

Mark LaNeve

were sold low really On we of more have very, inventory market QX. we adequately QX. down very we get I XXs. In serve Explorer what do But in adequate We adequate just the XXs, explore, didn't normalized volume in the call because to would inventory inventory the level to have correct.

down selling have in doing will started. be to XXs we both sell in be XXs, will which the actually beginning Escape QX and

the quarter the will and end be sold So the fourth that But a we'll will where is a Explorers. of higher come out We're points -- kind in much more launch we down have Escapes. XXs the be majority selling the it's XXXX by for basically -- to XXXX 'XX. all in, the sell normal will accelerates, quarter percentage of as

Dan Levy

Okay.

year-on-year the those be SUVs declines So declines, on the if we the that's should mostly through correct?

Mark LaNeve

Yes, sir.

Dan Levy

what point And through we down? then sedans, the at sedan the are mostly wind

Mark LaNeve

And well. C-Max it's Focus of of that Focus, Escape, about We'll winding level impacted any By we Taurus that be haven’t XXXX, we'll got have fusions next products but XXXX, by and sales down. us been Fiestas as year year. in year, through. nameplates really selling we're there and the end Those we ones and unlike XXXX, XXXX, sold still this this into all-new some course, and be -- we’ll impacted have are then year of full several the we’ll It new Fiesta Fusion But all-new hitting in we've Ranger year. will really Explorer, this incremental market. and talked

than different So XXXX. looks did it a it lot in

Dan Levy

Ranger? up the follow then down just give more and X%. And that color just spend per could months. you. to questions from that each for A, of F-Series F-Series. of ask see, your at has wanted the a been and just cannibalization unit F-Series that I some I data in context on incentive incentive Also, if picked north couple And $X,XXX I Is on quarter, Thank for look just past and you pin decline. it's up of it at the see looking of couple

the normal some your capitalize on? issues lastly, happening then on potential have inventory, incentive Just of would given than spend. what's And color that may higher on is to they sort one competitors and something of like you to just

Mark LaNeve

the Yes, Dan, to part it. answer, of first

which still new more mix it's are would launch competitors. our but for. to up major the and are our new the right F-Series. primary than is we than slightly brand yes, It's of we've in our X%. higher F-Series, transaction better our effect $X,XXX knew some line because up, spend actually rich there or Ranger, two competition, With been from vehicles below be Overall on incentive of crept pickup pricing planned has vehicles sales

the for F-Series manage we're So, -- long-term. not we

our to fully obviously all important shared weren't which utilizing And critically of our going of capacity, we is we're to So health some business. chase number. to spend

combining feel our are the the F-Series values to had $XX,XXX, the for really impact customers about where is the going and with kind good of and F-Series good both in trading with We're we manage So transacting of over long-term expect. that And the remain disciplined market. number. health Ranger we're residual has the business, values our which we

Dan Levy

Great. And or… is then just capitalize you given to strike, potentially would competitively the on that something look that

Mark LaNeve

pick month, and good effect a business. good a GM's The Well, in GM seen any we had haven't September. overall really market had month Ram RAM, had we and in good GM up months.

they into yet had any heading seen haven't we impact pretty inventories good So it.

Now for not different month can't -- that. I'm it’d of but, the -- I the handicap last October a story be whole

So, provide GM have good we're value going to an together put and eye for to be good with our the keep strike. to competitive, -- with obviously customers dealers really going on on what's deals

Dan Levy

Great, much. you thank very

Operator

[Operator call. U.S. for Ford Thank conference Company participation. XXXX This you. Thank Instructions] Motor concludes your sales the quarter third you

now may disconnect. You

Ford Motor (F) 2 Oct 192019 Q3 Earnings call transcript