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Ford Motor Co. (NYSE:F)

January 2014 U.S. Sales Conference Transcript

February 3, 2014 10:00 AM ET

Executives

Erich Merkle - U.S. Sales Analyst

John Felice - Vice President, U.S. Marketing, Sales and Service

Emily Kolinski Morris - Senior Economist

Analysts

Adam Jonas - Morgan Stanley

Itay Michaeli - Citigroup

John Felice Murphy - Bank of America Merrill Lynch

Colin Langan - UBS

Alisa Priddle - Detroit Free Press

Dee-Ann Durbin - AP

Brad Wernle - Automotive News

Mike Ramsey - Wall Street Journal

Rod Lache - Deutsche Bank

Operator

Good day, ladies and gentlemen. And welcome to the Ford Monthly Sales Conference Call. My name is Derrick, and I’ll be Operator for today. At this time, all participants are in a listen-only mode. We shall facilitate a question-and-answer session at the end of the conference. (Operator Instructions)

I would now like to turn the conference over to Mr. Erich Merkle, U.S. Sales Analyst. Please proceed.

Erich Merkle

Thank you, Derrick, and good morning, everyone. Welcome to Ford’s January 2014 sales call. Looking at our initial read of the data this morning, the month looks to be wrapping up at above the high 15 million total vehicle SAAR rates, including medium and heavy trucks.

This would translate into an absolute sales number of around just over -- a little over million total vehicles, placing the industry down approximately 2% relative to year ago levels.

At retail, we are seeing a SAAR that is coming in right around 13 million, maybe a little lighter than 13 million, which would represent approximately 80% of the industry for the month.

January sales cadence was weak at the beginning of the month coming off the holidays. It recovered very well through the middle of the month, but then again softened at the end. Weather was a factor in January as much of the country recorded extreme cold and inclement weather conditions.

So if we take a look at some of the details and what we saw at the various segment level. In January, we saw some decline in the full-size pickup trucks segment relative to last year. The segment represented approximately 11.5% of the industry in January, related to 12.5% last year.

We feel there are a couple factors that impacted the segment in January. First of, incentives spend in the segment is down about $700 relative to last year with transaction prices up approximately $3,000.

Secondly, January's cold snap had an impact on the Great Lakes in the central regions of the country. These are areas that lean heavier towards full-size pickup truck sales. Midsize cars represented about 15% of the industry in January, which was off again, which was again off, compared to year ago readings up about 16%.

Those who purchased vehicles in January must have been inspired to purchase small utilities. The segment represented just over 17% of the industry in January, which is the highest level we have ever seen.

This compares to about 14% of the industry in January of last year, so some really strong growth continues in the small utility segment. That gives you a real quick look of the overall industry and some of the segments.

Now, I am going to turnover to John Felice, and he is going to talk us little bit about what he saw at some of the regional levels and with some of the vehicles. John?

John Felice

Well, thank you, Erich, and good morning, everyone. During the month of January, Ford Motor Company sales totaled 154,644 vehicle representing the 7% decline over year ago levels.

A portion of loss was a result of a weak fleet month as the plants were hampered by some of the tough weather we have, the winter weather. Fleet sales totaled 40,923 vehicles which was a decline of 14% year-over-year. These orders will be filled in February as we recover.

At retail, we also saw sales hampered by the bad weather as Ford Motor Company retail sales totaled 113,721 vehicles, which was off by a more modest 5%.

Looking at retail sales performance by various region of the country, we were up in the west, which again wasn’t affected as much by the weather. Regions of real weakness for us in January were places where, obviously weather was worse, including Great Lakes and the East which were both down about 10%.

When you look at individual vehicle, Escape had its second best January sales month and while total Escape sales were up 2%, in total sales at retail were up 2%. This provided Escape with its best January sales results ever at retail for the month of January.

Fusion sales were up 8% this past month, however, we estimate that the retail market share increase as the overall segment was off by a larger percentage. Based on the preliminary data for January, Fusion delivered its best ever retail share of the Midsize Sedans segment.

Fusion performed really well in the West where it was up 11% at retail that was not enough to offset the declines in regions that suffered from the incline of weather, including the Great Lakes and the eastern parts of the country, which were down 20% and 18%, respectively.

When we look at California, the largest passenger car market in the country, one of the few places that had good car buying weather, Fusion retail sales were up 17%. This would be our best ever January retail sales for Fusion in California and it’s a big part why our Fusion retail sales of the Midsize Sedans segment were at an all-time high.

As Erich commented earlier, we estimate the full-size pickup truck segment was down for the first month of this year, largely as a result of year-over-year pull-back and overall incentive spend and again, the poor weather in the central part of the country which are key to pickup truck sales.

By region, our performance was very strong in the west and southeast which saw increases of 5% and 3%, respectively. This wasn’t enough to offset the loss in some of the industry's biggest full-size pickup truck areas like Great Lakes and Central.

All in, F-Series posted a slight decline of less than a percent in January were just 305 fewer sold than January a year ago. This performances comes with F-Series at the lowest incentive spend among the three largest pickup truck producers in January.

Turning to Lincoln, continuing this momentum from last year, Lincoln sales for the month totaled 5,973 vehicles, which is a 43% increase in Lincoln’s best January sales performance in four years.

Lincoln MKZ sales in January turned in a very good performance coming off the holiday sales month of December, MKZ sales totaled 2,122 vehicles. Lincoln MKX was up 36% in January with 2,479 vehicles sold.

We fully realized that we still have the long way to go as this luxury brand journey re-innovation will be measured in years not months, but we are pleased with Lincoln’s performance in January and look forward to the all new Lincoln MKC small premium utility vehicle, which is set to go on sale this coming summer.

Just a quick look with a little more granularity on sales results by region. And with that, I’d like to turn things to Emily for an update on the economic conditions. Emily?

Emily Kolinski Morris

Okay. Thank you so much John and good morning everyone. Well, we want to try to avoid giving a weather report this month but unfortunately, we have seen some significant weather-related impacts on the economic data here around the turn of the year.

We’re going to try to abstract from that a little bit. We want to note that as we look into 2014, we do see a continued improving trend in the incoming indicators and some indications that growth this year could be better than the first estimate of 1.9% growth rate for the full year 2013.

But with that backdrop, let’s look at some of the recent monthly data. This morning we received the Purchasing Managers' Index for January and that was down 5.2 points from the prior month’s reading of 57. New orders and production readings were down but the reports didn’t note a number of comments from their participants that adverse weather had a negative impact on their business in January and also reflecting optimism about improving sales and business activity in the early part of 2014.

The University of Michigan consumer confidence reading for January declined just over a point to 81.2. That decline was attributed to a less favorable assessment of conditions by household with income below $75,000 although more household at all income levels did see some improvement in their personnel finances as compared with the same time last year.

Positive assessments in vehicle buying conditions noted low interest rate, as well as favorable pricing with 68% of those surveys indicating that it’s a good time to buy vehicle. Housing-related data has certainly been affected by the extreme weather conditions as well leading to months-on-months decline in some of the key reading but continuing to reflect an improvement in the year-on-year trend.

The pace of new home sales slowed in December as compared to a very strong November results but was still at 4.5% year-over-year. With inventories remaining tight at just five-month supply and we expect that will provide some support for construction in the year ahead.

Despite the poor weather, December housing starts were treated only slightly to just under million units of SAAR and remain near the mid-2008 peak. Against the backdrop of improving demand and tight housing supply, pricing has continued to improve.

The most recent reading on the Case-Shiller Home Price Index which date to November showed a 13.8% advance compared to a year ago, marking the ninth consecutive month of double-digit price increases, with average prices now about 20% off of the 2006 peak. In addition to the tight supply of homes for sale, the release also noted that prices typically dip in November but nonetheless this was the best November result since 2005.

Finally, in terms of job and income growth, these reports are also very weather sensitive, we’ll get a new reading on January payroll this week which we’ll have to dissect when the data become available. But we know that December’s reading was certainly affected by the weather with the significant decline in construction employment during the month.

The unemployment rate did continue to decline, sitting at 6.7% currently. It was a combination of job gain and declining labor force participation driving that reduction. In fact, since mid 2009, we’ve now seen over 6.5 million jobs created. Although labor force participation rate was also down over that period from 65.5% to 62.8% currently and the most recent four-week moving average of initial jobless claims came in at 333,000 in the past four week period but that is down from 357,000 that we cited at the time of our last sales call.

Consistent with the story on consumer confidence, these conditions are generating only modest improvements in income growth. Personnel income was flat in December on a month-over-month basis, although spending did improve four tenths of a percent month-over-month in the same period.

So to recap as Erich mentioned earlier, we see this January total industry sales in the high 15 million unit range. This season we adjusted annual rate including medium and heavy trucks, losing out some of the recent volatility which is certainly good thing to do in this current environment and looking at the data on a six-months moving average basis. This monthly pace would continue the modest increase in the trajectory we’ve seen after having flattened out in the latter part of 2013.

And so our 2014 industry sales projection remain in the range, which was disclosed on December 18th last year with U.S. sales expected in the range of 16 million to 17 million units. So with that Erich, I’ll turn it back over to you and we can do questions.

Erich Merkle

Thank you, Emily. I have a few housekeeping items to go through before we turn it over for questions. As we take a look at January as fleet as a percent of total, January 2014, 26% of our total sales were fleet. That is 14% for commercial, 5% for government and 7% for daily rental. This compares to January 2013 when 28% of our sales were fleet, 14% were commercial, 4% were government and 10% were daily rental.

Turning over to gross stock inventory situation, we have January 2014, cars 234,000 vehicles, trucks 248,000 vehicles, utility 177,000 vehicles, giving us a total for the month of 659,000 vehicles. This translates into days supply of 111 days. December 2013 the previous month, cars 224,000, trucks 247,000, utilities 168,000 giving us a total of 639,000 vehicles translating into days supply of 73. January of 2013, cars, we had 176,000 cars in gross stock; trucks 239,000; utilities 152,000 giving us a total of 567,000. This translated into a days supply of 89.

Now when we start one other note or one other comment that we want to make here before turning the call over, is that going forward our production guidance will be reporting our production guidance in conjunction with our earnings. And this is going to be a bit of a change as this will make it consistent with our global reporting process. So for next month, we won’t be issuing production guidance with the sales call just to note.

With that, Derrick, let’s turn it over to the folks in the analyst community and we will start taking some questions.

Question-and-Answer Session

Operator

Certainly. (Operator Instructions) And our first question will come from the line of Adam Jonas, Morgan Stanley.

Adam Jonas - Morgan Stanley

Good morning, everybody. Couple of questions. A, first off, could you guys comment on subprime lending environment? Some other auto verticals were claiming, towards the end of last year, there was some pullback or hesitation of credit availability subprime. Just want to see how that matched up with what you were seeing?

Erich Merkle

In terms of Ford, what we are seeing is we’ve been between 5% and 6% at Ford Credit. That has been the case prior to the recession, during the recession and after the recession. So we haven't changed our business approach at all to that.

Adam Jonas - Morgan Stanley

Great. Just on inventory levels, you kind of mentioned what looks pretty elevated here, how much of that would you say is temporarily, i.e., weather related or you able to kind of give a little more color kind of what you would have thought that 111 would have been, if we weren’t at all freezing ourselves last month?

John Felice

This is John.

Adam Jonas - Morgan Stanley

Hey.

John Felice

It was an interesting month. On the inventory, we feel very well positioned with the inventory levels. Again, day supply is always a function of sales pace as well as the inventory on the ground. As we see every year, typically in January, elevated day supply in terms of the calculation. As we get into the spring market, we feel we are well-positioned with inventory levels and what we see getting back to more trend type sales pace.

Adam Jonas - Morgan Stanley

Okay. So you are on pace.

John Felice

We are right where we want to be in terms of heading into the spring market.

Erich Merkle

We are not concerned at all, Adam, particularly as we move into January in the summer -- spring and summer selling months. And with the winter weather that we had in January, we're kind of been thrilled at 111 out. So it’s just really in the valley.

Adam Jonas - Morgan Stanley

All right. And forgive me if you’ve already disclosed this, but you usually give a sense of off lease volume in the year end versus the year prior. Can you do that now, your expectation of off lease Ford, the Lincoln products and unit volume in the U.S. in 2014 versus ’13?

Erich Merkle

Yeah. I don’t recall us giving guidance on off lease. I think as you’ve heard in the industry, it'll be higher volume this month for both us and the industry. But our point estimates is not something we share.

Adam Jonas - Morgan Stanley

Okay. I thought in the past you gave that in a way we can fall off of that sort of costs. Finally then, incentive environment, any broad comments you'd like to make in terms of competitor movements in January, or is it too soon to just say anything substantive?

Erich Merkle

When we take a look at the overall incentive spend environment for January, Adam, industry incentive spends level were roughly flat with January on a year-over-year basis compared to December of 2013. They were down about $300. So the average transaction prices are up about $75 from a year ago for the industry and appear to be down approximately $800 compared to December of 2013. So if we take a look at Ford’s overall incentive spend in January, we were down $250 from December and up about $450 compared to January 2013. But our average transaction prices continued to increase as they were up about $400 year-over-year. So, does that help you to give you a little color?

Adam Jonas - Morgan Stanley

Thanks for the color.

Erich Merkle

Yeah. While sequentially, the industry was down and we were down on a month-over-month, but there were couple manufacturers that were up on a month-over-month. As always people move in different directions at the time.

Adam Jonas - Morgan Stanley

You are trying to sequential?

Erich Merkle

Sequential month-over-month.

Adam Jonas - Morgan Stanley

Yeah. Okay.

Erich Merkle

Okay.

Adam Jonas - Morgan Stanley

Thanks, guys.

Erich Merkle

Okay. Thanks, Adam. Derrick, next caller, please.

Operator

The next question is from the line of Itay Michaeli, Citigroup.

Itay Michaeli - Citigroup

Great. Thanks. Good morning. Just hoping you could just quantify, you mentioned sales were good in the areas of the country that had good weather such as the west. Do you have any numbers around what retail sales in particular were in those less affected regions?

John Felice

Yeah. This is John speaking. Just in terms of overall industry and again, we don’t have the final numbers in yet. But looking at what we've seen in the preliminary data, the west market area in general was showing double-digit gains in retail industry because we saw softness in the other parts of the countries that you would expect where some of the weather challenges we had in the Midwest and east. So by product at the end of this month on a relative basis was the west market area.

Itay Michaeli - Citigroup

That’s helpful. Then just a follow-up on the transaction price question. Can we just talk about specifically, what you saw in the month in the midsize car segment? I think the segment has come under some pressure lately, maybe both industry as well as Ford specific for midsize cars. That’s all I had. Thanks.

Erich Merkle

Sure. Okay. Thank you, Itay. In terms of the midsize car segment, we take a look at incentives spend. Year-over-year, it was down approximately $100 and compared to year ago, the incentives spend was up about $500, and when we look at the transaction prices, so I’m looking at lot of the really tight data here. We look at the medium car segment, it was up about $200 compared to last year and it was down about $600 sequentially.

If we take a look at Fusion, our incentive spend was flat year-over-year -- was flat sequentially. Year-over-year, we are up about $900. But on the transaction price, we are still at the very high end of the range from a transaction price perspective. We are transacting close to $24,000 per vehicle, which is at the very top end of the range.

Itay Michaeli - Citigroup

That’s very helpful. Thanks.

Erich Merkle

Okay. Thank you.

Operator

Your next question will be from the line of John Murphy, Bank of America Merrill Lynch.

John Felice Murphy - Bank of America Merrill Lynch

Good morning, guys.

Erich Merkle

Good morning, John.

John Felice Murphy - Bank of America Merrill Lynch

Just a quick question, do you guys have a percentage of the regions that were hit by extreme weather in the month as you look at it or even sort of a rough guesstimate?

Erich Merkle

The percentage of the regions, for the total?

John Felice Murphy - Bank of America Merrill Lynch

Yeah. Of the country, I mean, was it 60%, 70%, 80% roughly, just because it sounds like, I mean, there's a mass dispersion, where you are looking at the west that wasn't crushed by the polar vortex up pretty significantly.

Erich Merkle

Yeah.

John Felice Murphy - Bank of America Merrill Lynch

I'm just trying to figure out how much of an impact we actually had here from the weather?

Erich Merkle

Yeah. It's difficult to quantify the impact because it, frankly, it came at different times of the months, so we got kind of wallet twice. And it also affected so many regions outside of the west. So it becomes a little bit difficult.

In terms of the overall industry, we have kind of an estimate for the total for the U.S. right now, again it is still early, but trying to break it out by region will need a probably a little more time with that.

John Felice

Yeah. And John, just to add, this is John. When you look at the month, the overall performance quarterly a very highly what we saw on the weather conditions, January got off to a pretty slow start with really inclement weather in the heartland of the country all the way down into Texas. As things improved around the country in mid-month, we saw a bounce back in demand and sales which was encouraging.

And then sadly the last week of the month we saw again another arctic blasts, as well as some tough conditions and not only central but east but southeast was hard hit at the end of the month and we saw the sales tempo kind of correlate to that. So it was very consistent with what we saw in the weather and the conditions around the way it moved through the month of -- the cadence overall.

John Felice Murphy - Bank of America Merrill Lynch

Got you. Okay. That's helpful. And the fleet vehicles -- the fleet sales that you think got delayed because of weather and your production, will those get caught up in the next month or two and how much of that 14% decline do you think is a result of the weather?

John Felice

Yeah. We had, John, we had -- we anticipate about 7,500 units that were planned for January production that again will catch-up, we expect those to come back in February till business and just because of some disruptions and in the plants that will be captured in the month of February.

John Felice Murphy - Bank of America Merrill Lynch

Okay. Great. And then just lastly, F-Series versus Silverado, Sierra, it outperformed dramatically but it dramatically underperformed the Ram pickup, a lot of dispersion there between the three major lines of pickups to say? Anything you guys are seeing in the market, is that comparisons, I'm just trying to understand what -- why you guys were kind of flat. Silverado, Sierra was down 17% and Ram pickup was up 22%, so a wide dispersion there?

Erich Merkle

Yeah. There was a wide dispersion, some of it depends on the year-over-year comparison to a certain extent too John, but also when you start taking to look at the incentive spend levels for the industry, when we start taking a look at our truck incentives and I'll give them here to you in just a second. So if we look at our F-Series, our incentives decreased by about $200 versus January of last year.

John Felice Murphy - Bank of America Merrill Lynch

Okay.

Erich Merkle

With incentives running approximately $3,800 per truck, compared to December F-Series incentives declined about $300 and our incentive spend at $3,800 per truck was the lowest of the three largest full-size pickup truck producers.

So we did take our incentives down a bit here in January, so we'll have to, we're always going to be monitoring that environment, but there is no question that some are more aggressive than we are at this point in time.

John Felice Murphy - Bank of America Merrill Lynch

Okay. Very helpful. Thank you.

Erich Merkle

Okay. Thank you, John. Next question please, Derrick?

Operator

Your next question…

Erich Merkle

Let's take one more from the analyst community then we'll switch it over to the folks in the media if we could please.

Operator

Okay. Get it. Next question will from the line of Colin Langan, UBS.

Colin Langan - UBS

Oh! Great. Just following up on that last question, any color on the industry pickup incentives the way you did cars?

Erich Merkle

Industry pickup incentives, sure. As we take a look at, sorry, I just have to, a lot of data here, Colin.

Colin Langan - UBS

Sure.

Erich Merkle

I got to pull -- turn over to my incentive page, if we were to take a look at our incentives on overall pickups, for the segments, I would say, yeah, the overall segments on the year-over-year basis was likely down about $650 year-over-year, okay. And when we start taking a look at the, in terms of sequentially, we're probably looking at something that was up just modestly on a sequential basis.

And if we take a look at the HEPs, there we go, transaction prices for the industry, we're looking at an industry that was likely, if I take a look, yeah, we're looking at about $3,000 in terms of up year-over-year, in terms of average transaction prices. And okay, does that help you out?

Colin Langan - UBS

Yeah. It was pretty helpful, yeah.

Erich Merkle

Okay.

Colin Langan - UBS

And any color on, did the weather impact your production overall, I mean, your production times delayed because of some of the plants maybe not getting up and running during the cold weather?

John Felice

Yeah. Colin, we did run into some of those bumps in the, as I mentioned in January related to some of the fleet deliveries. But again our guidance for first quarter remains unchanged in terms of total production because we have the ability to make up that as we go through the balance of the first quarter.

Colin Langan - UBS

Okay. And any color on your outlook for pickup mix throughout the year as weeks, months, I mean, do you expect pickups to be better this year than last year in the segment?

John Felice

Yeah. Colin, we still remained very bullish and again, January is one month and the trend that looking at all the macroeconomic factors we see with housing and everything else, we still will feel very strong in what we see with full-sized pickup demand and segmentation for this coming year.

Colin Langan - UBS

And just one last one, any color on the focus? It was down again this month pretty significantly or any concern about cannibalization from the Fusion or is that just a market dynamic going on?

John Felice

Yeah. Certainly when you take a look at Focus, if you start taking a peek at it, it's -- our mix was a little more weighted toward some of our newer products last month. Even though Fusion was down, Fusion had an excellent month in fact. It had its best, its highest retail. We estimate its highest retail market share within the mid-size segment that we've ever seen for fusion.

So fusion overall had a very good -- very good month, which probably had a little bit of an impact on Focus. But overall you're still looking at Focus, it’s a smaller car and it is January and the weather wasn’t very conducive.

Colin Langan - UBS

Okay. All right. Thank you very much.

Erich Merkle

Generally -- Colin, just one more bit of color commentary that when you look at the retail segment performances of Fusion -- excuse me, Focus to your question, it was right at the range we had anticipated for Focus. It performed actually quite well.

Colin Langan - UBS

Okay. All right. Thank you very much.

John Felice

Okay. Thank you Colin. Derrick, we are going to turn it over to the folks in the media at this point.

Operator

Certainly. And your first media question will be from line of Alisa Priddle, Detroit Free Press.

Alisa Priddle - Detroit Free Press

Well, good morning gentlemen.

John Felice

Good morning.

Erich Merkle

Good morning.

Alisa Priddle - Detroit Free Press

I just wanted to ask a little bit about C-Max because it seems to be down little more than others. I'm wondering is that -- are the lower gas prices taking a toll on it over and above weather?

John Felice

Yeah, exactly. What we've seen is the electrified vehicle segment at least overall has been running at just above 3.5% of the industry here in January. And that’s really a level that we haven’t seen since August 2012 and that sounds really from its peak, it’s all time high in August 2013 which it was just over 4% at that time. So we've seen some real softness in the overall electrified vehicle segment because as you alluded to earlier, the more affordable gas price that are out there right now.

But make no mistake -- I mean we're committed to the strategy of having the power of choice because as we've seen time and time again gas prices, today they might be very low but tomorrow they can -- that can all change.

Alisa Priddle - Detroit Free Press

And so are you addressing this by just changing your mix in your Michigan plant or are you looking at it with that and Focus begin down that you might have to have some downtime coming up in that plant?

Erich Merkle

Yeah. Alisa, that’s always what we do is monitor the actual demand in the market place and balance production with the demand and required inventory level. So we've made some adjustments late last year and we'll continue do so going forward if needed.

John Felice

Right. Thank you Alisa.

Alisa Priddle - Detroit Free Press

Okay. Thank you.

Erich Merkle

Thank you, Alisa.

John Felice

Next caller please.

Operator

Your next question will be from line of Dee-Ann Durbin of AP.

Dee-Ann Durbin - AP

Good morning.

John Felice

Good morning.

Dee-Ann Durbin - AP

John, you had said that in the Great Lakes and East were both down about 10% that was the weather-related comment. And I'm not sure if this is what John Murphy was also asking. But did you have a similar breakout for the West and then South, you said the West was up, up by how much?

Erich Merkle

Yeah, in terms of the breakup, Dee-Ann, we have the West looking at Ford. So if we take a look at places like the Great Lake and the East, John had commented it's down about 10%. Both are down about 10%.

Dee-Ann Durbin - AP

Exactly.

Erich Merkle

Yeah. And the Southeast was down about 4%.

Dee-Ann Durbin - AP

Okay.

Erich Merkle

So there is a tremendous amount of weakness in those areas.

John Felice

Just to give some color commentary again, this was just based on the retail trends we saw in the industry. As I mentioned earlier not our sales industry trend which map close to it, the West market area was showing double-digit increases in overall retail industry performance. We were seeing with just a couple of days to go in a month, the East, the Great Lakes and Central down double digit, East and Great Lakes down single digit and then Southeast about even but again in the last couple of days of the month, we were really tough in the Southeast.

So I think what we’re going to see when numbers all come in is an industry that was up likely double digits in the West, down double digits or close to that in the Central and single digits elsewhere.

Erich Merkle

Okay. All right. Thank you Dee-Ann. Next question Derrick.

Operator

Your next question will be from line of Brad Wernle, Automotive News.

Brad Wernle - Automotive News

Hi guys. Just a quick follow-up on the C-Max question. Could you -- was the Fusion hybrid down also and if so how much?

John Felice

We won’t have the hybrid numbers. Brad, will have those forward reports that will send out tomorrow. So where did you saw have at this point and time.

Brad Wernle - Automotive News

And how much was the Lincoln increase due to the slow number from last year as a result of the MKZ being sold down and there you’re waiting for the 2015 which was delayed?

John Felice

Brad, we're cognizant of the comps on the year-over-year basis. We are very pleased with the Licoln results but -- in recognition a year ago, we did have a little net launch periods with the MKZ but again overall it was a very good Lincoln month.

Brad Wernle - Automotive News

Okay.

John Felice

It was our best in three year. So…

Brad Wernle - Automotive News

In terms of overall numbers?

John Felice

Correct. Okay. Thank you Brad.

Brad Wernle - Automotive News

Thank you.

John Felice

Derrick, next caller please.

Operator

Your next question will be from the line of Mike Ramsey, Wall Street Journal.

Mike Ramsey - Wall Street Journal

Hey guys. Good morning. Just -- I’m sorry I missed -- I didn’t miss it but I didn’t get both days? Could you give me the before and after, for day supply from December to end of January?

Erich Merkle

Sure. Sure. So if we have -- if we take a look at our day supply, January 2014, we’ve got 111 and that’s with 659,000 total vehicles. January 2013 was 89 and that was at 567,000 vehicles.

Mike Ramsey - Wall Street Journal

Do you have, December? I’m sorry.

Erich Merkle

Yeah. And so December was 73.

Mike Ramsey - Wall Street Journal

Okay.

Erich Merkle

And that was 639,000 vehicles.

Mike Ramsey - Wall Street Journal

Okay.

Erich Merkle

And another important point I think to make here is that sequentially, when you look at our dealer stocks, Mike, our dealer stock was actually lower in January than it was in December.

Mike Ramsey - Wall Street Journal

This is -- when the selling rate slows, obviously the division changes the day supply.

Erich Merkle

Correct.

Mike Ramsey - Wall Street Journal

But also real quick, I mean and nobody said this. But assuming we don’t have another 10 snowstorms during February. Do you guys anticipate, February might be a strong month reasonably just to kind of have make-up sales?

Erich Merkle

Yeah, we haven’t -- we’re little bit -- we don’t really want to comment on this because it’s still very early. And John and I and Emily, we’re not weather forecasters. We didn’t bring any with us today. But I would safe to say that we think because of the strength that we saw in January, when we had good weather we think that it will eventually, will get made up.

John Felice

And, Mike, this is John again. As Erick said, we won’t forecast the weather but we expect everything to return back to trend based on the fundamental. As Emily mentioned, the moving averages and all of the fundamentals for the industry still look very solid and we expect things to improve as we progress to the first quarter.

Mike Ramsey - Wall Street Journal

Perfect. Thanks a lot, guys.

Erich Merkle

Thanks Mike. Derrick, another caller, please?

Operator

At this time, we have no further media questions in queue for Q&A.

Erich Merkle

Go ahead.

Operator

We do have a one question left from the line of Rod Lache, Deutsche Bank.

Erich Merkle

Okay. We’ll take. Let’s take Rod’s call.

Rod Lache - Deutsche Bank

Hey, thanks for taking my question. A couple things, one is can you just give us what percentage of your F-Series was still a 2013 model and have you basically gotten the clearance of that inventory behind you now?

Erich Merkle

Yes. It’s got much better, Rod, we had a great sell down of F-150s in January. So if you take a look at our F-150 stock for 2013, it was 43%. Our 2013 model year was 43% of our mix in January. Okay. And then if we look at F-series overall, including super duties, 33% of our mix in January was 2013 model year F-series. Okay?

Rod Lache - Deutsche Bank

Okay. In terms of the inventory, obviously there are lot of things that affect the calculations, seasonality and so forth. Should we be thinking about the moving average of sales versus the moving average of inventory, because right now on a year-over-year basis you are up 16% for inventory? What would you -- figures, is a reasonable level to be carrying?

Erich Merkle

Yeah. We’re not going to get into what we feel is a reasonable level, but when we start taking a look at it, bear in mind that we have to go through the spring and summer months. And I think, Bob had mentioned this during the earnings call as well. We may drive the inventories just a little bit higher because if you remember last year, especially in the third quarter, we know we left some share on the table because we started running out of stock in the summer selling months so.

Rod Lache - Deutsche Bank

Okay. But the level of inventory is not something that would cause some pricing adjustments at this point it sounds like?

Erich Merkle

We feel very good about our inventory, particularly as we go into the spring and summer months. And again with everything that went on in January, the 111 days probably is a real good figure as well.

Rod Lache - Deutsche Bank

Right. And lastly, Emily, there's been a lot of talk about how the weather is affecting the economy in different ways. Do you have any thoughts on heating costs and other weather-related factors, and how does that -- how should we be thinking about the way that affects spending on durables like autos?

Emily Kolinski Morris

Yeah and that’s a great question, Rod. I think that certainly can be a factor. It would tend to crowd out others of discretionary spending, not so much on durable goods because I think durable goods are big purchase decision and a monthly -- one high monthly heating bill is probably not going to change your decision on purchasing a vehicle. It may lead you to eat out less or make cutbacks and other things that are also sort of short term. Is it the persistent trend as we go into periods of high gas prices for an extended period of time, then we look at the calculation little bit differently.

Rod Lache - Deutsche Bank

Okay. Great. Thank you.

Erich Merkle

All right. Thank you, Rod. And, Derrick, with that, we’re going to wrap things up here today. So, I really appreciate everyone joining our call. Derrick, it was a pleasure working with you and we look forward to talking everyone next month when we host our February Sales Call. Thank you very much.

Operator

Ladies and gentlemen that concludes today’s conference. We thank you for your participation. You may now disconnect. Have a great day.

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