Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Ford Motor Company (NYSE:F)

February 2014 U.S. Sales Conference Call

March 03, 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

Analyst

Dan Levy - Barclays Capital

Rod Lache - Deutsche Bank

Elizabeth Suzuki - Bank of America Merrill Lynch

Itay Michaeli - Citigroup

Ben Klayman - Reuters

Nick Bunkley - Automotive News

Mike Ramsey - Wall Street Journal

Alisa Priddle - Detroit Free Press

Keith Naughton - Bloomberg

Karl Henkel - The Detroit News

Operator

Good day, ladies and gentlemen, and welcome to the Ford Monthly Sales Conference Call. My name is [Tahisha], and I'll be your operator at this time. All participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

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

Erich Merkle

Thank you, [Tahisha]. Welcome to Ford's February 2014 sales call, and good morning, everyone. Getting things underway and reviewing our initial read of this morning's data, February looks to be shaping up at a high 15 million total vehicle SAAR including medium and heavy trucks. This would translate into an absolute sales number of around 1.23 million total vehicles, making for a slight 1% uptick in February sales compared to levels last year. The retail SAAR appears to be coming in rate around of approximately 12.5 million vehicles. This represents approximately 79% of the overall industry this month.

February started off slow, but the cadence improved through the last week of the month. Taking a look at some of the details, you may recall we saw a slight decline in full-size pickup truck segment last month, a trend that continued into February. The segment represented just less than 12% of the industry, down from about 12.3% at this time last year.

Continuing a theme we've discussed for the past several months, small utilities once again hit record industry volumes. Small utilities represented approximately 18% of the industry in February, compared to just 14.5% last year. The small cars' segment struggled in February representing just over 20% of the industry, which is off from about 22% last year. The growth in small utilities is placing pressure on small to mid-sized passenger cars.

Looking at the midsize sedans segment, share increased slightly to 16.5% of the total industry, up from 16.2% last year. It appears that segment is beginning to level out after several months of decline. That gives you a very quick look at some of the things that are going on in the industry and the segmentation.

So with that I'm going to turn things over to John Felice to provide you with some additional colour for the month. John?

John Felice

Well, thank you Erich, and good morning, everyone. Ford Motor Company's sales totalled 183,947 vehicles, represent a 6% decline over year ago levels. The first half of the month, as Erich mentioned, was a bit slow, but we saw a very good rebound in the past few weeks with the sales pace normalizing, providing good momentum heading into March.

As was the case in January, our fleet sales were hampered early in the month by weather. Our fleet sales totalled 58,028 units, which was a decline of about 10% versus a year ago. Orders in January that were pushed into February were filled as we referenced on last month's call.

However, as we moved into February, we had to delay approximately 10,000 of our February fleet orders into March due to sporadic parts disruptions early in the month. We still expect to meet our production guidance of 770,000 vehicles for the quarter, and should be able to get this back on-track in the month of March.

At retail, our sales improved as the month unfolded. Unlike January, we're able to have a normal close with sale strengthening significantly in the final week. While we made up a good deal of ground, our retail sales finished off 4% with 125,919 vehicles sold. We should note that we're up against a very difficult year-over-year comparison with February 2013 representing our strongest retail share month of the entire year at 42%.

As we look at the individual vehicles across our portfolio, total Escape sales were off slightly, but up 3% at retail for our best February retail performance ever. While Fusion sales were up 14% in February, our retail share was about the same as February of last year. Fleet was off 30% for Fusion, some of which will be made up in March.

At retail, Fusion continued to perform very well in the west market area where retail sales increased 15% setting a new February sales record. Last month, California had a record month in Fusion retail sales with 2,038 sold representing a 25% increase, and the first time that Fusion has ever surpassed the 2,000 unit monthly retail sales mark in the state.

Incentive spending for the midsize sedan segment increased $440 last month or about 16% over January. For comparison, Fusion incentives spend was flat while maintaining transaction prices that are among the highest in the segment.

Overall, full-size pickup truck segmentation was likely off a bit this month relative to a year ago when we get all the reports in. However, F-Series sales were up in February with 55,882 pickups sold. Last month F-Series sales represented our best February sales performance in eight years. This comes as F-Series has the highest transaction prices of the three largest pickup truck producers in February. F-Series transaction prices were up approximately $1,000 relative to last year.

Taking a closer look at Lincoln. Lincoln has now had positive sales results for five straight months. During four of these months, Lincoln posted double-digit increases. Over the last five-month period Lincoln sales are up 26% compared to the same period one year ago. This was last achieved during the sales period ending almost four years ago in April 2010.

Sales of Lincoln were up 36% led by MKZ, which totalled 3,044 vehicles last month. Lincoln MKX is up 8% in February with 2,041 vehicles sold. As you know, we've said we're on a journey with Lincoln and we're very pleased to see the continuous string of sales increases for the brand.

And, you know, I'm really encouraged as I'm out talking to dealers. I know they are all very excited about the performance and the prospect of selling the new MKC small premium utility which will arrive in our showrooms this summer.

That's a quick look at Ford and Lincoln. Now let's turn things over Emily for an update on the economic front. Emily?

Emily Kolinski Morris

Great. Thank you very much, John. Well, as we enter now the month of March and try to put winter in the rear view mirror, the incoming indicators have not entirely cooperated. While it may be several more weeks before we have what could be considered a clean reading on some of the near-term U.S. economic conditions, some key themes are worth nothing.

The monetary and fiscal policy backdrop is increasingly well-defined and includes reduced fiscal drag this year, inflation remains contained and interest rates still are very low by historical standard; consumer confidence has been steady with modest job and income gains expected to continue, and the housing sector fundamentals are aligned for further gains this year. On net, we think the U.S. economy is still on track to grow in the 2.5% range or better this year. So let's look briefly at some of the details.

The February Purchasing Managers Index, which was released this morning, recovered to 53.2, up nearly two points from the January reading, but the report did continue to note references to weather effect in the month along with optimism regarding near-term demand growth. In consistent with that the orders component of the index was up in the month, while production was down fairly significantly.

In terms of consumer confidence, encouragingly the University of Michigan survey readings have remained relatively stable throughout this period at 81.6 in February, up about four-tenth versus the January reading. And improving outlook last month among households with income in the top third and age 35 and under was offset by declining investments by older and lower income households who were probably the most negatively affected by weather-related increases and utility cost. Positive assessments of vehicle buying conditions were cited by 65% of those surveys, down just slightly from January.

On housing, the recent data have been mixed and the weather probably explains some, but not all of the variation that we've seen recently. January housing starts declined to 880,000 units on a SAAR basis. That's down 2% versus the prior year. And sequentially we saw a large gain in the northeast and a slight dip in the west, both led by changes in multi-family building activities.

The pace of new home sales reached a five-year high in January, rising 2.2% from the prior year, while existing home sale fell by 0.1% over the same period. Importantly, inventories for both new and existing homes remained tight at under five-month supply, which we expect will provide support for construction activity in the year ahead.

And against this backdrop of improving demand and tight housing supply, pricing has continued to improve with the most recent reading on Case-Shiller Home Price Index that dates to December showing a 13.4% advance compared to a year ago, and prices are now less than 20% off the prior peak.

While these price gains are a potential win to sales, they also represent an important and wide-spread contribution to gains in household as well. In fact, household balance sheets continued to normalize over the course of 2013.

The recent date on this show that the combination of deleveraging that have taken place day along with low interest rates have allowed debt service payments to continue to decline, dipping below 10% of household income, the lowest ratio since at least the 1980s based on Federal Reserve data through the third quarter of last year.

And the Federal Reserve Bank of New York's latest quarterly report shows that outstanding household debt increased $241 billion in the final quarter of last year for the first year-over-year increase in borrowings since the financial crises.

The year-over-year gains were largest for student loans and auto loans, although mortgage debt posted the biggest quarterly gains. So, overall, that report strongly suggests that the deleveraging of household balance sheet is coming to a conclusion.

And on balance, combined with ongoing modest income and job gains, household financial position appeared to be improving gradually along with the economic recovery. So on balance, our 2014 industry sales projections remained in the range which was disclosed in December last year.

As Erich mentioned, U.S. sales expected in the range of 16 million to 17 million units, and with the February industry estimate in the mid to high 15 million unit range smoothing out some of the recent volatility, our six-month moving average would be running just slightly below the recent kind of sales around 16 million units.

So with summary, let me turn it back over to Erich.

Erich Merkle

Thank you, Emily. And to take care of a few housekeeping items, we will get started here. First of all, as we said on our last call, our production guidance -- we are changing the cadence of our production guidance, we said this last month. And our production guidance from this point forward will take place in conjunction with our earnings call, with our earnings release and our earnings call.

So with that let's get into the gross stock inventory. So if we take a look at our gross stock for the month of February for cars, we had 247,000 cars; 266,000 trucks; 184,000 utilities, giving us a total of 697,000 vehicles. This translates into a day's supply of 91.

Comparing to January 2014, we had 234,000 cars; 248,000 trucks; 177,000 utilities, providing us with a total of 659,000 vehicles. That translated into 111 day's supply. Comparing two year ago February 2013, we had 176,000 cars; 246,000 trucks; 153,000 utilities, giving us a total of 575,000 vehicles. This translated at the time in the 71 day's supply.

Taking a look at our fleet as a percentage of total sales, and if we start taking a look at the month of February, we had our total sales fleet was 32% of our total sales. Commercial was 14% of our total sales, government was 5%, and daily rental was 13%. This compares to February 2013 when 33% of our sales were comprised of fleet. The breakdown of that was 14% of total sales for commercial, 4% for government and 15% for daily rental.

Taking a look at calendar year-to-date. Calendar year-to-date 29% of our fleet -- our total sales, 29% are fleet; the breakdown of that commercial 14%, government 5% and daily rental 10%. Comparing to February 2013 year-to-date, we had 31% of our total sales were fleet, and the breakdown of that time was 14% for commercial, 4% for government and 13% for daily rental.

So that takes care all of the housekeeping items. So at this point, [Tahisha], we'd like to start with taking some calls from the folks in the analyst community, please.

Question-and-Answer Session

Operator

Sure, no problem. (Operator Instructions)

And for your first question that will come from Brian Johnson from Barclays. Please proceed.

Dan Levy - Barclays Capital

Hi, good morning. This is Dan Levy on for Brian. Thank you for taking the call. First of all, obviously the weather has been impacting sales. I want to get a sense for how you’d characterize pent-up demand related to weather. And whether we could see a release of that in the coming months?

John Felice

Hey, Dan, this is John. Yeah, it's been an interesting start to the year with the weather, but again looking back at February, we’ll have all the final numbers later today, but we’ll be somewhere in the high 15 million SAAR range with given the challenge we had sporadically during the month of February we think is actually a pretty sound performance.

And as we experienced during the month as things -- some of the areas of the country that weren't impacted as well as other places, as soon as they weren’t impeded by some of the weather issues, we saw very robust demand.

So, while it's difficult to determine how much of that pent-up would carry into March, I think it was a solid month on an industry basis and we expect heading into the month of March being a very solid spring market.

Dan Levy - Barclays Capital

Great. On the large pickup segment, if you could just tell us what percent of your sales -- large pickup sales in February were model year 2013 trucks and what percent of your inventory is model year 2013? I just want to get a sense for how you're selling that down.

Erich Merkle

If we take a look at it, approximately 22% of our mix in February was 2013 F-Series, so in the low 20s for F-Series combined. And if we look at just F-150, it was up 30%; approximately a third was the split for F-150 in February.

Dan Levy - Barclays Capital

That's sales?

Erich Merkle

Sales and inventory is about the same.

Dan Levy - Barclays Capital

I see, okay. And then last question. Obviously just on your large pickup incentive spend, I see -- first of all, if you could just tell us where that was? And then I -- more broadly I think that you have noted in the past that your incentive spend has been consistently in the $4,000 range. And obviously, your strategy this year, a lot of that relates to just positioning yourself for the rollout of the new F-150.

But I wanted to get a sense for your thoughts on how your incentive spend throughout the year may be altered based on the actions of your competitors. One of which in particular has suffered on share and maybe -- perhaps maybe inclined to raise spend to recuperate some of that share.

John Felice

Well, Dan, this is John. We're going to stay to our plan on F-150 and the incentive spend is again we’re very pleased despite being later in the cycle in product. We command the largest transaction prices in the industry.

So when you look over the longer timeframe of recent months, say over the last five months, our incentive spend has actually moderated in full-size pickup and we have seen some escalations both in the segment and from the other large volume competitors. But again, we’re going to stay on our plan and manage to the F-150 and Super Duty at our own cadence.

Dan Levy - Barclays Capital

Great. Thank you.

Erich Merkle

Thank you, Dan. [Tahisha], next caller please.

Operator

Yes, your next question will come from the line of Rod Lache from Deutsche Bank. Please proceed.

Rod Lache - Deutsche Bank

Hi, everybody. Just first of all, could you give us what the F-Series inventory level was at the end of the month?

John Felice

Yeah, we can get that for you. Just a second, Rod. Total stock, Rod, was 166,000 units.

Rod Lache - Deutsche Bank

Okay. Thank you. And when you--

John Felice

Combined both F-150s and Super Duty.

Rod Lache - Deutsche Bank

Right. And when you look at the decline in the sales as a percentage of the market, is that something that you view as largely weather-related? Is it related to a particular part of the market that's a little bit weaker, the mixed data on starts?

How is that being driven? And how is that -- it looks like your average transaction prices are still up, so presumably the segment that -- there might be some mix positive that's occurring with maybe some of the segments that are weak, lower average transaction price segments?

John Felice

Yeah. Rod, in terms of -- as Erich and I mentioned earlier in the call, we were down about 4% retail year-over-year comparison basis and when you look as we mentioned, the retail sales last year in February did happen to be our strongest retail share month at a 14%.

Again kind of across the Board, despite all the challenges and some of the challenges that were in the month of February, it was a robust market generally speaking and again, we feel that as we head into March, we’ll be in very good shape.

Rod Lache - Deutsche Bank

Okay. So is the -- presumably this phenomenon of rising average transaction prices that you’re seeing in that segment, is that something that you don't see or you see as being sustainable?

Erich Merkle

What segment specifically -- the pickups, Rod?

Rod Lache - Deutsche Bank

We’re talking -- yes, the pickup truck segment.

Erich Merkle

It will be interesting to see. We don't know if it sustainable or not. I know one of the things when you start taking a look at the incentive spend within that segment. For instance I can tell you because I know someone else will likely ask this question anyway, but F-Series incentives, we declined about $350 from February of last year and our incentives on our trucks were approximately $4,000 for the month.

So, compared with January, F-Series incentives did increase though, but about $200, not a lot. We’re still right around $4,000 per truck and it's actually a lot lower than where we were last fall, which if you remember -- I'm going back to the October timeframe, it was about $4,500 -- October-November timeframe. So, the trend actually for us has been down.

But I can tell you like if you take a look at the overall segment, the segment incentive spend is down, but there is -- when you look at the high end of the range, it is getting stretched a little bit right now. So there is -- at the high end of the range, there is a truck out; it's $5,000 per truck, which is up approximately $600 versus year ago. So, we’re [inaudible] a little bit of uplift at the high end of the range, but overall, the -- spend for the segment is down.

John Felice

Rod, just to clarify--

Rod Lache - Deutsche Bank

Just to clarify, did you say that it was down $350 year-over-year and up $200 sequentially? Is that what you said, Erich?

Erich Merkle

That's correct.

Rod Lache - Deutsche Bank

Thanks. Sorry.

John Felice

And Rod, this is John. I wanted to clarify. I thought your question was on the retail total industry and clearly it was on F-Series specifically. I just want to clarify that was actually up 3% year-over-year, F-Series sales.

Rod Lache - Deutsche Bank

Okay, great. Thank you.

Erich Merkle

Okay. Thank you, Rod. [Tahisha], next caller please.

Operator

Your next question will come from the line of John Murphy from Bank of America Merrill Lynch. Please proceed.

Elizabeth Suzuki - Bank of America Merrill Lynch

Hi, this is Liz Suzuki on for John Murphy. I mean it looks like the car segment had a somewhat less successful month compared to the trucks at least for the Blue Oval brand. Can you talk about what the small and mid-sized car segment in particular has been facing from a competitive standpoint?

As you mentioned sales were strong in California, but was there a really material impact on the East Coast that particularly hurt the car segment or was something else going on with competition there?

Erich Merkle

You've got a few things happening there, Liz. One, if we take just starting -- we take a look at the Focus, the majority of our decline on Focus was fleet-driven. Our retail sales were a more modest 12%, which is really roughly in line with the decline in the overall small car segment for the month. So, the small car segment really as a segment didn't perform all that well, but our retail sales were down about 12%, which is roughly in line.

When we take a look at the Fusion, so if we look at the Fusion, our retail share performance for Fusion is really unchanged from year ago, so it's really level. It's the same as it was last year and the loss can really be explained as part of the 10,000 fleet vehicles that we had in for February that are now having to be re-calendarized into March. So, part of that 10,000 would have been -- would have helped Fusion likely in the month of February.

Elizabeth Suzuki - Bank of America Merrill Lynch

Okay, great. And just another one--

Erich Merkle

Just to look at the different markets, the West -- yes, the West and the California we continue to perform very well. The East of course was a little bit softer.

Elizabeth Suzuki - Bank of America Merrill Lynch

Yeah. Okay. And just another one on incentives. What was the total incentive spending for the month compared to last month or last month -- last year? Because TrueCar is saying that Ford's incentives were up about 15% year-over-year, which does not seem to correspond with what you guys have been saying on this call.

Erich Merkle

No, it doesn't.

John Felice

And Liz, this is John. If you look at the industry, the latest data we have was up $125 on a year-over-year basis and we were roughly half of that, $60 to $70, so I’m not -- I can't really understand that reference, but again, the industry $125, up $60 or $70.

Linking back to your earlier question on C/D, midsized car, that was one of the segments whereas Erich or I touched on earlier that was pretty competitive in terms of the level of -- while every set is different, we did see a $440 increase in C/D with selected manufacturers being very aggressive in the C/D segment. Again, as we touched on, we were in essence flat Fusion and delivering a retail share pretty much on plan with a year ago.

Elizabeth Suzuki - Bank of America Merrill Lynch

Great, that was very helpful. Thanks so much.

Erich Merkle

[Tahisha], we're going to take one more call from the analyst community please.

Operator

No, problem. That question will come from Itay Michaeli from Citi. Please proceed.

Itay Michaeli - Citigroup

Great. Thanks, good morning. So, just a question on the cadence for the month, you mentioned that sales surged in the last week. Could you maybe just describe what the last week accounted for this year versus what it typically accounts for on average in the month of February?

John Felice

Well, I don't know if I have the percentage for you, but looking at the month as we mentioned, we did get off to a slow start in the industry in the month of February. But it did pick up the last 10 days. We've got more normalized close.

It felt very similar to what we would expect in terms of the tempo of the month and compared to January, [inaudible] recall, the whole industry suffered from some really late month weather impact. But it again performed very well coming out of February, which sets up I think for a good spring market.

Itay Michaeli - Citigroup

Great. And then just a follow-up on the fleet side. You mentioned that you should expect to see some strength in March. Do you have an early expectation for what the March fleet sales may look like or is it still way too early to tell just given the weather dynamics? Should we expect to be an up year-over-year comp for you?

John Felice

Well, we haven't typically given guidance on future month fleet sales, but again to reference the specific issue at hand is this month similar to last month, we had some sporadic disruptions in parts availability, weather-related this month.

So, about 10,000 units of our fleet business will re-calendarized from February into March again but we fully anticipate the hold to our first quarter production guidance of 770,000.

Itay Michaeli - Citigroup

Perfect. Okay, so 10,000. Okay, guys. Thanks so much. I appreciate it.

Erich Merkle

Thank you, Itay. [Tahisha], we're going to open the line up and take our first caller from the media community.

Operator

Great. Your next question will come from the line of Ben Klayman from Reuters. Please proceed.

Ben Klayman - Reuters

Actually my question was asked. So I'm good.

Erich Merkle

Okay. Thanks Ben.

Operator

All right. Moving along to Nick Bunkley from Automotive. Please proceed.

Nick Bunkley - Automotive News

Hi, good morning. Last year Ford was the big winner in terms of share gain. Do you expect that this year you’re still going to be able to do that? I know the first couple of months you haven't -- because of weather, but do see that as your expectation for the full year? And is your full year forecast still where it was a month ago?

John Felice

Yeah, our guidance last year was about the same in terms of share performance this year and we haven't changed anything from our plan and expectations for 2014.

Nick Bunkley - Automotive News

Okay. And so for the industry sales, you still expect 16 million to 17 million including--?

John Felice

Yeah. The guidance has remained again having what -- despite all the challenges in February coming in in the high 15 million SAAR, we feel comfortable with our guidance of 16 million to 17 million for the full year.

Nick Bunkley - Automotive News

Thank you.

John Felice

Okay. Next.

Erich Merkle

[Tahisha], next caller please.

Operator

Yes. Your next question will come from Mike Ramsey from The Wall Street Journal. Please proceed.

Mike Ramsey - Wall Street Journal

Hey, good morning. Kind of a question about small cars and mid-sized cars. Is it just the weather that you think is really hurting this segment or is it a fundamental change in American consumer attitudes towards like cars?

Because it just seems like for months and months it's been going down. The crossover SUVs are doing well. Is this a weather thing or do you think that we may be seeing like I guess a structural issue with demand for these type of vehicles?

John Felice

Yeah I -- this is John. Mike, I don't know if I’d point to anything weather-related in terms of demand in the industry. But I know in our prior calls, we’ve spent a lot of time discussing what appears to be a really hot segment in our industry, which is small utilities. And as Erich mentioned, that trend continued in February.

On the small car side, it was encouraging to see -- I know again in prior calls; we've talked about some of the softness we've seen in the C/D segment, mid-sized sedan. We did see that stabilize and actually improve on a year-over-year basis, so it's in there. Smaller cars are a little bit lower in terms of overall performance, but we’re seeing a very strong demand in utility vehicles across the industry.

Mike Ramsey - Wall Street Journal

So, you think that maybe there is a structural shift if not weather-related that people are just -- because of more fuel-efficient utilities, the people are just opting for the SUV over the car?

Erich Merkle

Yeah, Mike. We've mentioned in other calls in the past the small utility, that's really where we’re seeing this booming growth. So, it represented 18% of the industry last month. That's its highest level as a percent of industry ever.

So, a couple drivers. One is yes; the small utility is becoming very fuel-efficient. And two, you've got a lot of these -- we've mentioned this many times before, the Baby Boomers out there that are becoming empty-nesters and these vehicles seem to be a natural fit for these folks.

John Felice

As well as if you look at the product cadence in the industry, the small utility segment has seen a lot of activity in terms of either freshened product or new models, which again tends to fuel growth.

Mike Ramsey - Wall Street Journal

Okay, awesome. Thanks.

John Felice

Okay. Thank you, Mike.

Erich Merkle

[Tahisha], next caller please.

Operator

Your next question will come from Alisa Priddle from Detroit Free Press. Please proceed.

Alisa Priddle - Detroit Free Press

Hello. Good morning, gentlemen.

John Felice

Good morning.

Erich Merkle

Good morning Alisa.

Alisa Priddle - Detroit Free Press

Just wanted to -- sort of a little on the lines of what Mike was talking about as well, obviously your truck sales are still extremely strong and your trucks are almost the same as your total car sales. And I know that you guys have worked very hard as part of your cycle plans to get -- spread out the wealth I guess and get more car sales. So, I'm just wondering are you sort of concerned that you are becoming too truck and utility-heavy with all of your efforts to try and get cars up there.

Erich Merkle

No, not at all actually. Because keep in mind Alisa, we’re always one gas shock away from people moving back to cars. So, it really helps to have a diversified portfolio. The other is when you start taking a look at our global positioning, it's not just the U.S., but we’re a global automaker. So, Focus is the number one selling nameplate in the world.

The world still prefers cars. Although utilities -- small utilities are growing globally as well. We feel we’re very well-positioned in small cars and small utilities for growth here in the U.S. and globally.

Alisa Priddle - Detroit Free Press

Okay. Thank you very much.

Erich Merkle

Okay. Thank you.

Operator

All right. Your next question will come from the line of Keith Naughton from Bloomberg. Please proceed.

Keith Naughton - Bloomberg

Hi, guys.

Erich Merkle

Hey, Keith.

Keith Naughton - Bloomberg

Hey, I just wanted to ask about Escape, which was down for the month and is down for the year. Over at Chrysler, they are doing very well with the Cherokee. Their Cherokee sales were up 12% month-over-month. Do you feel like you are feeling any impact from the new Cherokee on the market?

John Felice

Well, Keith, this is John. When you look at Escape, again, we’re really pleased that -- when I look at the retail sales on a year-over-year basis, we were up 3%, which was our best retail February ever for Escape. As we mentioned, the fleet sales were down over 20% last month with Escape and again, some of that will be re-calendarized into March, but Escape performance has been very solid.

Keith Naughton - Bloomberg

So no impact from new Cherokee?

John Felice

Well, it's hard to balance because obviously we've seen segment growth, so it's grown the overall segment. Again, we’re kind of working on our year-over-year comparators and how we’re performing, and again, it was up 3% and our best February ever. And the segment grew in total.

Keith Naughton - Bloomberg

Great. Thank you.

Erich Merkle

Thank you, Keith. [Tahisha], we're going to take one more call from the media community and then we're going to wrap things up.

Operator

No problem. Your next question will come from Karl Henkel from The Detroit News. Please proceed.

Karl Henkel - The Detroit News

I think you guys have mentioned before that a better indicator of the industry's level of success or failure is to look at things in three-month stretches versus just a singular month. But I'm wondering with the weather issues we've had in January and February and what I would venture to guess is spilling over into March now too, how should we be looking at this couple months stretch here?

Should we kind of expand that window when we’re thinking about this as a larger picture, how are you guys detailing exactly how you portray what's going on in the market over these past few months?

John Felice

Yeah Karl, this is John again. Looking at a six-month running average, we have been around a 16 million unit SAAR running at that level, again within very close to our guidance of 16 million to 17 million for the full year.

And despite all the challenges in January and February, quite frankly, the market was pretty robust. Again we operated at a 15.6 million industry SAAR total in January and we expect maybe even a slight improvement in the month of February. So again, it's -- with March market coming on, it’s a five-weekend month. It should on a more normalized running basis, we’re right in that 16 million range.

Karl Henkel - The Detroit News

Thank you.

Erich Merkle

Thank you, Karl. [Tahisha], it's been a pleasure working with you today. Thank you very much for your help and we appreciate everyone's participation and listening into this month's Ford sales call. And we’ll look forward to talking to everybody next month when we recap and go over the sales numbers for the month of March. Thank you very much, everyone. Bye-bye.

Operator

Ladies and gentlemen, that will conclude today's conference. Thank you for your participation. You may now disconnect. Have a great day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Ford's Management Hosts February 2014 U.S. Sales Conference Call (Transcript)
This Transcript
All Transcripts