Ford Motors Sees Third-Quarter Decline

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Ford Motor Company had warned that its third-quarter profits would be down sharply from a year ago. Ford’s profits this year were a net income of $957 million, which is a 56% down from its third quarter of 2015.

Across the page volume was down by 11%. This was mainly due to stocks, negative change in stocks, market share, and a little bit on industry. With Canada being up 1.6 points, and Mexico up by 0.3 points. The US was down 0.7 points, and this is what really drove the overall region. The third-quarter decline in sales had to do with cars and SUVs.
US sales of Ford cars were down by 20% in the third quarter, as buys migrate away from buying sedans and towards SUVs. But even Ford’s SUV sales were down, 3.4% lower in during the third-quarter.

During the third quarter Ford ramped up production of its all new 2017 Super Duty pickup trucks. Causing some factory downtime in order to retool, and some supplier issues made the roll-out slower than what Ford had hoped for. Supplies for their new truck were tight during the third quarter, depressing sales. The F-series was down 3.3% from this time last year.

The other factor affecting Ford? The recall of defective door-latch parts that could cost them up to $640 million.

The US new-car market is still strong, but not what it was a year ago. Ford’s rivals have been boosting incentives in order to generate some year-over-year sales growth. Ford was faced with the decision to boost their own incentives and hurt profit margins, or accept lost sales and reduce production to preserve its strong pricing.

Ford has said that it will trim production of some models even further in the fourth quarter. They will continue to offer competitive incentives, but not excessive ones, prioritizing margins over market share.

Ford CEO’s have previously stated that the company will “match production to demand”, which Ford seems to be standing by. Ford’s current CEO Fields is sticking to this as the US market slows.

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