Ford to step up production of hot vehicles

 

Alisa Priddle/ The Detroit News

Ford Motor Co. will make more of the vehicles that customers can’t get enough of in the fourth quarter.

U.S. sales of 175,220 in August were up 11 percent compared with a year ago, but could be higher with a greater supply of hot-sellers such as the new Ford Focus, as well as the Fiesta and Explorer.

The automaker is increasing production to 645,000 in the fourth quarter, 9 percent more than a year ago, and for the full year, production should hit 2.64 million, which is a 10 percent bump in output, said Ford sales analyst George Pipas.

Focus sales were down 9 percent from a year ago, which the automaker blamed on short supply. Ford sold 14,000 Focuses last month compared with almost 15,500 in the same period a year ago. But Pipas said last year at this time, Ford had 27,000 Focuses on dealer lots compared with only 7,000 this year, making the current strong sales somewhat remarkable.

“It’s the fastest-turning vehicle on lots,” Pipas said, adding his personal order for one was cancelled to give it to another customer.

The good news is that “Focus production is now fully launched,” said Ken Czubay, Ford vice president of U.S. Marketing, Sales and Service.

More of the compact vehicles will start arriving at dealerships over the Labor Day weekend, which should help close the gap between supply and demand, he said during a conference call Thursday.

Czubay is also pleased that one in six Focus sales is to a buyer aged 18 to 34, bringing the average consumer age down eight years compared with the previous model. “And they’re more likely to come from California and trade in an import,” he said, noting the conquest rate is 50 percent higher with the 2012 Focus.

The subcompact Fiesta enjoyed a 76 percent hike in sales, but the car was just launching at this time last year and production was still ramping up.

The new Ford Explorer remains hot with sales up 300 percent from a year ago. The 2012 Explorer with the 2-liter EcoBoost 4-cylinder engine made its debut in August.

This month the Ford Edge with the EcoBoost engine is arriving at dealerships. August Edge sales were only up 5 percent, but a year ago Ford was selling down the old model in preparation for the launch of 2012 version.

But the Edge is pacing to exceed 200,000 sales by year end. Pipas said this year could mark the first time since 2004 that the automaker has three products with sales exceeding 200,000. That is usually an easy feat for the F-Series pickup but the Fusion and Escape are on track to pass the milestone as well.

And a trio of models that are reaching the end of their lifespan this year are going out with a bang.

The Ford Crown Victoria saw sales more than double to almost 4,900 in August with a lot of government fleet sales, Pipas said. The Lincoln Town Car also saw sales grow 45 percent for the month and the Ranger, which will end production at the end of the year, was up 49 percent.

Average transaction prices of vehicles is up about 5 percent from a year ago, Pipas said.

That is a reflection of strong sales of higher trim levels of models being sold, including small cars.

“Fiesta and Focus are selling over 20,000 units combined with little to no help from incentives,” said Jessica Caldwell, senior analyst with Edmunds.com. “This builds a stronger profitability case for these small cars, which have been criticized for bringing little profit to automakers.”

Ford officials do not expect incentives to ratchet up significantly because even though inventories across the industry are expected to improve, they are not expected to be excessive.

Nor is Ford building up supplies in case of a strike if negotiations with the United Auto Workers union fail to reach a new contact when the current one expires Sept. 14. Ford is the only Detroit automaker whose members can go on strike. The UAW has been securing strong strike mandates across the country with local unions voting overwhelmingly in favor, with results 95 percent and higher. But the procedural vote does not mean there is a high likelihood there will be a strike as talks continue to be described as productive heading into the Labor Day weekend.

Pipas said Ford is not stockpiling.

“That would be a terrible way to run a business.”

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