Cox Automotive Analysis: Ford’s Q2 2020 U.S. Market Performance

Ford Motor Co. reports second-quarter 2020 earnings Thursday, July 30, after the stock market closes. The results will be dismal, as Ford has already hinted very publicly that its operating loss will drop deep into the red, perhaps one of the worst quarters in the company’s 100-plus year history due to plant shutdowns caused by the COVID-19 pandemic.

Here are key data points from Cox Automotive on Ford’s second-quarter performance in the U.S. market where the company generates a vast majority of its profits.

Sales and market share

Ford’s total sales, including both the Ford and Lincoln brands, fell 33% to 432,279 vehicles. The overall industry was down more than 34% in the quarter, so the automaker’s market share actually edged up a bit to 14.90% from the 14.69% of the year-ago second quarter, according to Kelley Blue Book calculations.

Ford brand sales were down 34% to 411,018 vehicles, producing a 14.17% market share, up from 14.10% in Q2 2019. Lincoln sales were off only 18% to 21,261, causing its market share to climb to .73% from .59%.

Two Ford brand models posted higher sales than a year ago. Explorer sales were up 12% to 44,839 units. That was a big improvement from previous quarters as Ford has struggled to get the Chicago plant running properly to produce ample supply of the SUV, but it is still well off the second-quarter 2017 high of more than 70,000 Explorers. Ranger, a relatively new entry for Ford, saw sales rise as well, up 20% to 25,008 trucks in Q2. Sales of the all-important F-Series dropped only 23% to 180,825 trucks. Pickup trucks continue to be Ford’s core business.

Ford discontinued most of its car lines with the Focus and Taurus now totally sold out. Ford had 434 sales of the Fiesta in the quarter, so it, too, is almost sold out. The Fusion remains as Ford’s core sedan.

Lincoln’s star performers were the new Aviator and relatively new Corsair. The Aviator, which had sales of 4,016 units, has been challenged for inventory as it is built at the same struggling plant as the Explorer. The Corsair, which replaced the MKC, saw sales dip only 8%. The rest of Lincoln’s line was down between 32% and 39%, better than many competitive luxury models.

Incentives

Despite offering 0% financing on 84-month loans in the second quarter, Ford’s incentive spending was up less than 1% for an average of $4,332 per vehicle, according to Kelley Blue Book calculations. That’s in the range that Ford has spent per vehicle during the second quarter for the past four years.

Ford brand incentives actually dipped by nearly 1% to an average of $4,187 per vehicle.

Lincoln boosted incentive spending by 11% to a very high $7,135 per vehicle. The only second quarter over the past five years that was higher was in 2017, before the bulk of Lincoln’s product offensive hit the market.

Average Transaction Prices

Ford’s overall Average Transaction Prices (ATP) rose 7% to an average of $44,644 per vehicle, according to Kelley Blue Book calculations. Both Ford and Lincoln brands gained 6% in ATPs. The company and the brands had the highest ATPs for any second quarter ever.

Ford brand’s ATP is $43,999, reflecting the decision to drop many low-price cars like the Focus and Fiesta and focusing on trucks and SUVs, and also the addition of the pricier Explorer, which had its ATP rise 11% to $47,633. The F-Series ATP dipped 1% to $51,688, still the highest for pickup trucks.

Lincoln’s ATP hit $47,107, making the rich incentives more in line with prices. The Corsair saw the highest hike in ATP by 9% to $43,900. The priciest Lincoln, the Navigator, got a 1% boost in ATP, pushing over the $90,000 mark.