One question I’ve often suspected is why Ford got rid of its car line (without a Mustang). The answer is simple – money. Ford makes far more profit from trucks and SUVs than from cars.
And today Ford released its April sales figures that show it did. The highlights of April’s sales report reveal some pretty clear trends. Here are some of the highlights:
• Ford retail sales in April rose 57.1 percent, selling not only 2020 results but 23.7 percent versus April 2019 results. Combined, retail truck and SUV sales increased 70.1 percent bringing Ford truck and SUV sales the best April retail performance since 2006.
• The retail shares of the F-Series rose by 2 percentage points in the full-size pickup segment through April this year. F-Series retail sales rose 19.7 percent for the month, outperforming retail sales by 9.3 percent in April 2019.
• Ford electric vehicle sales hit a new monthly sales record – an increase of 262 percent over new product offerings. Mustang Mach-E sales were 1,951, F-150 PowerBoost sales were 3,365, and Escape electrified sales were 3,695 in April. Sales of electric vehicles rose by 262 percent to 11,172.
Related story: Ford has its best retail start since 2001.
“Ford’s retail sales not only increased 57 percent year over year, but also exceeded April 2019 by 24 percent,” said Andrew Frick, vice president of Ford Sales USA and Canada. “The strong reaction from customers to our latest products despite the shortage of stocks confirms our strategy of investing in electrified vehicles in addition to trucks and SUVs. In April, we not only surpassed pre-coronavirus sales from April 2019, but also record electric vehicle sales for that month and record sales of Ford and Lincoln SUVs in April. Trucks had the best retail performance since 2008. ”
The proof and the vision for the future were right there in this quote from Andrew Frick: “Our strategy to invest in electrified vehicles as well as in trucks and SUVs.”
For those upset about the electric Mach-E or the upcoming EV F-150 called Lightning, there is a need to better understand the future of the industry. And like it or not, Ford seems to be at the forefront, or at least near the top, when it comes to the profitability of future vehicles.
Ford’s profit per vehicle has increased, and here’s why
Another key highlight of the report released by Ford is that new products have pushed transaction prices to record levels. Transaction prices for Ford were $ 43,600 per vehicle in April. Bronco Sport, which sold dealer lots in just 13 days, fetched an average transaction price of $ 31,800 per SUV – the highest in the segment.
Ford’s investment in trucks and SUVs is not only producing more volume, it is also replacing sedans like the Fusion, which reached an average transaction price of $ 22,600 in April 2021.
Ford’s inventory on dealer lots
My colleague Marc Stern reported on the chip shortage, which led to delays and availability of new products. And this has certainly contributed to an increase in used car prices due to fundamental supply and demand principles.
However, some key information in this April sales report shows that Ford’s gross inventory at the end of April remains cheap compared to some of its competitors.
Ford stated in the report, “Ford’s gross inventory was 265,000 vehicles in May, which is high end compared to the industry as a whole, with a 35-day supply. This is comparable to an entire industry with an offer of 33 days. “
Related story: Ford’s partnership with BMW and the battery maker could change the game.
Final shot: familiarize yourself with Ford’s vision for the future
It just goes to show that Ford is making vehicles that make more money for the company overall. We already knew this, but some of the trusted Blue Oval fans don’t seem to accept or understand this.
Ford Motor Company is in the business of making money selling vehicles. This means maximum profit per vehicle. Unfortunately, this means fewer “niche vehicles”, more series vehicles and more electric vehicles. Like it or not, this is the future for all automakers, not just Ford.
As always, you get the last word. What do you think about it? Leave me your comment below.
Jimmy Dinsmore has been an auto journalist for more than a decade and a writer since high school. His column on the driver’s side features new car reviews that appear in several newspapers across the country. He is also co-author of the books “Mustang by Design” and “Ford Trucks: A Unique Look at the Technical History of the Most Popular American Truck”. Jimmy also works in the social media marketing world for a Canadian company that makes automotive training aids. Follow Jimmy on Facebook, Twitter and his special Ford F-150 coverage on Twitter and LinkedIn. You can read most of Jimmy’s stories by searching Torque News Ford for the Ford Daily Vehicle Review.