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Ford Motor Company (NYSE:F)

Sales/ Trading Statement Call

April 03, 2012 10:00 am ET

Executives

Erich Merkle -

Ken Czubay - Vice President of US Marketing Sales & Service

Ellen Hughes-Cromwick -

Analysts

John Murphy - BofA Merrill Lynch, Research Division

Brian Arthur Johnson - Barclays Capital, Research Division

Adam Jonas - Morgan Stanley, Research Division

Operator

Good day, ladies and gentlemen, and welcome to the Ford Monthly Sales Conference Call. My name is Erica, and I'll be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Mr. Erich Merkle, U.S. Sales Analyst. Please proceed.

Erich Merkle

Thank you, Erica. Hello, and welcome, everybody. We are pleased to be joining the call today from New York. We're pleased, very pleased to be at the auto show, and at the show, we're making a lot of headlines as we are announcing Fusion with auto start-stop fuel saving technology. We're showing the new Explorer Sport for the first time. We're also debuting the all new Lincoln MKZ for 2013, and we're giving more details about our commitment to a unique and personalized experience for our Lincoln customers.

For the month, as we take a look at sales for the industry, by our estimates, total U.S. sales, including medium and heavy trucks, finished the month about 1,445,000 vehicles by our estimate. We believe the industry for the month of March increased approximately 14% versus March of last year, producing a SAAR of approximately 15 million vehicles. We saw a few interesting industry trends in March as well.

First, industry sales strength in January and February carried through into the month of March, very encouraging. Industry incentive spending was flat on a sequential basis and down slightly year-over-year, with a leveling off of fuel prices, albeit at high levels of just under about $4 a gallon for the national average. The small car segment held in March at approximately 24% of the industry. This is a number that's pretty consistent with what we saw in February really carried through into March. This compares to a level of approximately 20% of the industry for the full year in 2011.

Now turning to the company's performance. Ford Motor Company had its best month of March sales performance in 5 years, with a total of 223,418 vehicles for the month, a 5% increase versus March 2011. Retail sales were up 11% in March, while daily rental sales were up only 2%. For the first quarter, Ford's total company sales were 539,247 vehicles, a 9% increase over the same period in 2011. Ford Motor Company retail sales in the first quarter were up 13%, while our sales to daily rental fleets were down 3%. Our daily rental as a percent of total sales was just 13% for the quarter compared with 15% last year. Through February, our daily rental mix was lower than the industry, our domestic competitors and most of our full-line Japanese competitors as well.

Here to share a few more ways in which Ford products responded to these higher fuel prices is Ken Czubay. Ken?

Ken Czubay

Thanks, Erich, and good morning, everybody. And as Erich said, it's always exciting to be in New York City, where we have so much exciting news to share with everyone on the Ford side and on the Lincoln side.

Well, as you can imagine, fuel economy was the name of the game in March as it had been in the first quarter. As was the case in February, dealers across the country told us that higher fuel prices played a larger role in customers' purchase decisions no matter what kind of vehicle they were buying, from small cars through full-sized pickups. That meant good news for Ford Motor Company dealers, and they delivered strong March retail sales performance in cars, up 10% at retail; utilities,, up 11% at retail; and trucks up 12% at retail. Doesn't get more balanced than that, which has -- and we, of course, fuel economy leaders in each of those super segments. We are participating well across multiple segments as our fuel-efficient vehicles are not segment-specific, but rather extend from small cars all the way through to full-sized pickups.

So let's take a closer look at cars. Fusion had its best sales month ever, ever, with 28,562 vehicles sold. This really speaks well to our continued strong performance in the midsized passenger car segment and paves the way for our next step with the all-new 2013 Ford Fusion coming this fall. Focus sales were up 65% versus last March, selling 28,293 vehicles. Focus had its best March sales results ever. Through the first quarter of this year, Focus sales are up 70% -- 78% nationwide. Importantly, a good share of those sales increases came in California, an important market whose small car vehicle registrations represent more than 30% of total registrations in the state. I was just in the L.A. region yesterday, gas was over $4.50 a gallon and our dealers are doing a great job in the small car segments. Focus posted 135% retail sales increase for the first quarter, including 194% retail sales increase in California during the month of March versus last year.

Now let's talk about utilities. Retail sales of Ford utilities were up 11% in March, as I mentioned. Sales of the Edge increased 13% to 14,058 vehicles. This represents the best-ever March performance for the Edge. It's also worth noting 19% of retail Edge utility vehicles sold were equipped with our new 2.0-liter EcoBoost 4-cylinder engine, and that provides customers with 30 miles per gallon. Explorer also performed very well last month, delivering its best March performance since 2001, over a decade. EcoBoost was 12% of the retail mix on Explorer.

While we saw really strong demand for our small cars and fuel-efficient utilities this month, we were also equally impressed with F-Series sales. This is important because it's the balanced job that our dealers are doing with the cars, with the utilities and the full-sized pickups. From talking to our dealers and our customers, we are finding that everyone, regardless of segment, places fuel economy top of mind today. You really can't blame them. So sales of our F-Series pickup, with best-in-class fuel economy, were 58,061 trucks, up 9% versus a year ago. So in this fuel-economy-driven market, our F-Series were up 9%, and with rising fuel prices, we continue to be very pleased with the performance of our EcoBoost and the 3.7-liter V6 engine in our F-Series pickups. We've talked about that for a long time now, and with fuel prices rising, this is more and more important. Pickup truck buyers are telling us that they want the fuel economy, of course, but they cannot sacrifice performance and they get performance and fuel economy with the F-Series. Our EcoBoost and V6 powertrains are providing best-in-class fuel economy of any pickups across the board.

Ford has captured more than 75% of the full-sized retail pickup V6 market and our V6 F-150 lineup provides a best-in-class fuel economy, even better than all of the competitors in the V6 category. In March, 41% of our retail F-150 customers chose the EcoBoost engine. A total of 56% of our F-150s were sold at retail with either the EcoBoost or our 3.7-liter. So they're choosing those very fuel-efficient 6 cylinders. All customers, regardless of segment, are telling us they want fuel economy and performance.

Municipalities also are eager for fuel economy that will put money in their budgets. We have now started the sale of our Police Interceptor sedans and utilities last month. So with EcoBoost hitting in our all-new Escape in the spring and Fusion this fall, Ford plans to triple production capacity of its EcoBoost engines this year. I was at the Cleveland Auto Show about 45 days ago and made that important announcement. EcoBoost, along with additional hybrids and plug-in hybrids, is providing our customers with true power of choice for the fuel-efficient vehicles that best meets their needs.

It's also worth noting that Lincoln sales in the first quarter were up 4% with retail sales up 7%. The New York Auto Show marks an important milestone for Lincoln this week, with the all-new production version of the MKZ being shown for the first time. Many of you saw the preproduction, the concept vehicle at Detroit, now you see the real thing in New York. It's worth checking out, this new premium midsized sedan, especially as it provides a glimpse at the future of Lincoln.

Thank you very much, and now I'd like to turn it over to Ellen.

Ellen Hughes-Cromwick

Thanks a lot, Ken. Well, I'd like to update you on a couple of topics since our last call. First off, some of the latest incoming indicators for the U.S.; and then, secondly, a short recap of the first quarter 2012 economic performance and industry sales globally.

First off, the incoming indicators. The 4 major leading indicators for the economy continue to track improvement through March. Let's take each one in turn. The March reading for Manufacturing Purchasing Managers Index that was released yesterday morning was a reading of 53.4%, and note, anything above 50% is a reading of expansion of the economy over the next 3 to 6 months. That was a good gain, and as well, all of the components are moving up, with 15 out of 18 industries posting gains. So the component readings, orders, production, employment and faster supplier deliveries, all contributed to that positive release.

Secondly, unemployment insurance claims are continuing to trend down. The latest 4-week moving average is at 365,000, a very good signal showing improved pace of job gains is likely in the months ahead. Note, we will get the employment report for the month of March this Friday at 8:30 a.m.

Thirdly, the March consumer sentiment came in higher than forecasted at 76.2. That is up from February's reading of 75.3. Noted in the survey were consumers' improved assessment of their financial situation and that also includes better job prospects.

And then finally, housing starts, a good leading indicator. Actually, they are up 35% over the 12 months ending in February. We don't have a March reading yet, so that's our latest data. Now admittedly, they're still at a low level, but what we are seeing is some revival, particularly of multifamily residential construction. And so that recovery, I think, is beginning to start, albeit very gradual, but it does contribute to the overall outlook for the economy, which does show some improvement.

And then finally, just want to mention a really key reading that we got last week which was a reading of durable goods orders. And that was actually up 12.2% over the last 12 months. Again, that's a February reading. Year-to-date, orders for motor vehicles and parts were up 13.9%, strong by any measure.

Well, finally, let me turn to just a very brief recap of the first quarter economy. Not quite all of the data in yet, economic growth is estimated for the U.S. to be roughly in the 2% to 3% range for the first quarter. We won't get the first quarter reading on GDP until the April 27 release by the Department of Commerce. But note that fourth quarter 2011 real GDP growth was 3% at an annual rate over the prior quarter and consumer spending accounted for half of that growth pace, along with some inventory restocking.

Note also in the first quarter, inflation was trending about 2.9% on a year-over-year basis in February. Again, we don't have the March reading yet, but about 0.7 percentage points of that increase was owing to the rise in food and energy prices.

Now let's turn to auto industry performance. As Erich mentioned, looks like March is coming in around 15 million in the first quarter, then would likely come in around 15 million units. Again, that includes medium and heavy duty trucks. And note, that is a bit of a step change up from fourth quarter 2011 at 13.8 million units. Again, that is a seasonally adjusted annual rate. So on net, people are going back to work. We're seeing rise in job gains of about 200,000-plus each month. And the vehicle stock, as we've talked about with you in prior calls, is very old, well above 10 years now and ripe for replacement.

Secondly, credit conditions improved in the first quarter. A lot of readings show some improvement in lending activity. And also want to note that certainly, the warmer weather may have helped economic activity in the first quarter, although we don't think it was the major driver for economic performance. First quarter estimates of global sales, very sketchy still, not all of the March data in. But it does be -- it is relatively consistent with our projection that we provided to you in the January call with global sales somewhere in the 75-million to 85-million-unit range for full year 2012.

So just to recap and summarize, we do expect global growth to be in the 3% range this year, with positive gains in the U.S., South America and Asia. We still see, again, just to reconfirm, global sales in that 75-million to 85-million-unit range. That would be up about 4% from the prior year. And then finally, in the U.S., 2012 economic growth projected in the 2% to 3% range, and tomorrow morning, Mark Fields -- I'm sorry, tomorrow afternoon, Mark Fields will provide an updated assessment of our industry sales outlook.

And then with that summary, let me turn it over to Erich at this point. Erich?

Erich Merkle

Thank you, Ellen. A few housekeeping items that we'd like to take you through here a moment. As many of you will want to know, our gross stock inventory, when we look at March of 2012, we have 145,000 cars in stock; trucks are at 190,000; utilities are at 145,000, giving us a total of 480,000 for the month of March. This translates into a days' supply of 58. In March of 2011, we had 118,000 cars, 184,000 trucks, 110,000 utilities, giving us a total of 412,000, which represented 52 days' supply in March of last year. As for fleet, when we look at March of 2012, our total fleet was 32%. It was 32% of total sales. Rental, the daily rental, was 15% of total sales. Commercial was 14% and government was 3%. That gives us a year-to-date for 2012 of 31% for total fleet as compared to total sales. For rental, 13%, which as I mentioned earlier, is 2 percentage points lower than the 15% calendar year-to-date in 2011; commercial, 15% year-to-date; and government at 3%.

So with those numbers now out there, Erica, I'd like to turn it over to take some calls from our folks in the analyst community, please.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of John Murphy with Bank of America Merrill Lynch.

John Murphy - BofA Merrill Lynch, Research Division

Ellen, just a quick question for you on the econ backdrop. As you're looking at the employment versus unemployment rate, I'm just curious which is really more important. I mean, obviously, the employment levels are, on absolute terms, reasonably high and improving. I'm just curious if you think that the current employment level is good enough to support a SAAR north of 15 million or we actually need absolute job creation. I'm just trying to couch whether employment's more important here or is consumer confidence more important.

Ellen Hughes-Cromwick

Well, I think the employment trend is certainly a very important and dominant factor and feature here to the economic outlook. The employment rate certainly is important, John, wouldn't discount it. But the employment data, as you know, come out of the payroll or what's called the establishment survey, and so those are actually good, solid data feeds of payroll data, and so they tend to provide a pretty good picture of the gains. And bear in mind, through February, employment growth is now trending above 2% and private sector job gains are even a little bit better than that. So I would tend to sort of focus on employment. Certainly, confidence is critical, but as I noted in the last survey that we got last Friday, consumers are pointing to the job prospects. So confidence is sort of keying off the job numbers in some sense.

John Murphy - BofA Merrill Lynch, Research Division

And then just a second question, to follow up on that. I mean, as we look at the auto industry breaking significantly above the 14 million unit SAAR capacity utilization rates on straight time capacity right now, are certainly busting through the mid-90% range. I mean, how significant do you think hiring could be in the auto industry as we break above 14 million units? And could that really help snowball sort of this positive momentum even further in the right direction for the economy?

Ellen Hughes-Cromwick

Well, we would hope so, but we're definitely taking a little bit of a cautious stance. I did mention the weather in the first quarter and I think we ought to keep that in mind. Let's take a look at what we are going to be seeing some of the high-frequency data coming out for April and May. I really want to get that under our belt to gauge what the uptake is in terms of the potential for acceleration.

John Murphy - BofA Merrill Lynch, Research Division

But are there plans for Ford to hire this year if we stay significantly above 14 million units?

Ellen Hughes-Cromwick

Erich, I'm not sure if you want to answer that. I know that there's some information around our employment plans.

Erich Merkle

Yes. We haven't -- we'll announce those, John, but -- okay. We have some -- we've already announced some shift increases, some adds in terms of shifts this year. So certainly, we'll be adding some people to fill those shifts as well, so.

John Murphy - BofA Merrill Lynch, Research Division

Okay. And then just lastly, real quick on the EcoBoost engines for the F-Series, the Edge. What kind of premium are you able to get from that? I'm just curious, really, the pricing on those products versus the base engine models and if the consumers really are not just flocking to those because of the fuel economy but also willing to pay a premium for those vehicles versus the base models?

Ken Czubay

John, this is Ken. There is a premium for those EcoBoost engines. However, when the consumers sit down with the salesperson and they go through the gains in fuel economy and they go through the gains in residual values, they're voting with their wallets and they are buying the end proposition of performance and fuel economy. So we don't quantify those numbers, but it's well worth the proposition.

Operator

Our next question comes from the line of Brian Johnson with Barclays Capital.

Brian Arthur Johnson - Barclays Capital, Research Division

Yes, two quick questions. First, could you give us a sense of Sun Belt sales versus Northeastern and Midwest sales, just so we get a feel for how the weather patterns might be playing out? And then second, just want some housekeeping around 3/4 versus half-ton F-Series.

Ken Czubay

Well, first off, Brian, this is Ken. We continue to see strong growth in the coastal areas, particularly in California, and it's very heartening to see those significant, almost doubling numbers of Focus, for example. I mentioned I was in California. I visited with a couple of our dealers last week and there is extremely high demand for the fuel-efficient vehicles. In all of, what we call, the super segment which should be the Fiesta, Focus, Fusion and the Explorer, we're seeing similar results in California and we are seeing the shift in the Texas, what we call the central area, to reflect not only very good sales of pickup trucks, but as we mentioned with John, with the EcoBoost powertrain. So the sales in the Smile states, as the industry calls them, have been very good. I don't think it's a reflection of weather. I think it's a reflection of high demand for the Ford products.

Brian Arthur Johnson - Barclays Capital, Research Division

So is your stronger sales in the Smiles more of Ford catching up? Or do you think that, that means the weather effect on at least auto sales is relatively minimal?

Ken Czubay

Well, I would -- numerically, they're very strong and we're most pleased that we're getting great segment gains in those segment also. So basically, good competition. Ford products are really flexing muscles in that area.

Erich Merkle

Yes. As for a little background on that, too, if you look at our California share, it's been up 3 consecutive years now. So we're very pleased with our growth in California. And as you can see from the Focus results that we've been sharing with you every month, that -- we expect that to continue as we continue to roll out the Focus.

Ken Czubay

And you asked about Super Duty, the 250 and above relative to F-150, we did very well. The diesel engine and the gas engines are both doing well and, frankly, we're making great strides in penetrating that segment. So we're seeing a little bit of recovery in construction work and in road work that's being done across America. I mean, people are really choosing the Ford pickup, both the overs and the unders.

Brian Arthur Johnson - Barclays Capital, Research Division

And did Super Duty grow faster than the 9% for F-Series?

Ken Czubay

I don't have that number.

Erich Merkle

Yes. We don't break out the Super Duty from the F-Series.

Ken Czubay

But it did well.

Erich Merkle

Yes. But safe to say, we're doing -- we're very strong in both the Super Duty and the half tons.

Operator

Our next question comes from the line of Adam Jonas with Morgan Stanley.

Adam Jonas - Morgan Stanley, Research Division

Sorry to put my meteorologist hat on again, but back to the weather, just to get on this point again, excluding California, because it sounds like you guys are just making tremendous progress there for a variety of reasons. Your products are just more – just incrementally more attractive to customers there. But if the weather is a factor, wouldn't you see the year-on-year strength kind of led by the cold weather states? Is that consistent with what you're seeing? You guys get more granularity state-by-state on sales in the month than we do on the outside. So are you seeing stronger growth? I know you can't pin it down perfectly, but does it seem like it's coming from the Midwest or the Northeast, for example?

Erich Merkle

Yes, it's really -- Adam, it's really at the coastal. As we see recovery in auto sales, the strength is really coming from the coasts right now. And we would expect that, as things continue to improve, to see that fill in, in the middle as well.

Ken Czubay

Adam, if I had to -- this is Ken. If I had to create some hierarchy, just talking to dealers every day like we do, I think I'd go back to the comments that Ellen made. I think there is underlying strengthening in the economy. I think that there is a real old carpark out there and consumers are coming into the service department and they're seeing that they need work done. And then they're looking at the great products that we're offering and they're saying, "Holy cow, I can make these kind of savings by investing in new powertrains. I'm going to defer. I'm not going to make that payment into the service department. I'm going to roll it into a new vehicle." I mean, it's just a great time with the age of the carpark to be buying a new vehicle and realizing the savings that you get through the powertrains and through the EcoBoost, et cetera. I don't want to minimize the weather, but when you have to stack up the hierarchies there, I think it's underlying economic strength and I think it's just the terrific offerings that we have in the showroom right now.

Adam Jonas - Morgan Stanley, Research Division

Okay. But so to be clear, you're not seeing unusual strength in cold-weather states?

Ken Czubay

No. Not relative to the other underlying factors.

Erich Merkle

In fact, Adam, this is kind of, for what we estimate for the quarter, but just for the industry, we saw the most strength in the West, which was about 30% increase, and that followed by the Southeast which was about 20%. So really, the central wasn't -- as far as the industry is concerned, it was about 17%. So those are some of the stronger regions from a sales perspective that are really performing well now in the U.S.

Adam Jonas - Morgan Stanley, Research Division

Great. Can I ask about the cadence in the month? Did you -- did things kind of -- if you were to divide it into, I don't know, how many quadrants you want, so beginning, middle, end of month, was it steady? Did it accelerate? Did it tail off as gas prices maybe reaching some fatigue? Any comment there?

Ken Czubay

Yes, I would -- this is Ken, Adam. And I would comment, I think in general, it was steady and then we were very pleased with the last weekend of the month. And it's the last weekend of the quarter but that doesn't necessarily influence dealers that much. I just think that consumers are saying now is a good time to buy a Ford product, and they're coming out. So we were pleased with the final weekend.

Erich Merkle

Thanks for the question. Erica, let's turn it over to some of the folks in the media, if we could take the first media question, please.

Operator

Our first question comes from the line of Dee-Ann Durbin with the Associated Press.

Dee-Ann Durbin

I just wanted you to talk briefly about Fiesta. It's just surprising that it's down so dramatically when, obviously, small car sales are -- should be pretty strong. And also I was wondering if you can break out hybrid sales and tell me if they were up from last year.

Erich Merkle

Well, 2 questions there, Dee-Ann. First is around Fiesta. When we take a look at, yes, Fiesta was down, as you can see, but you can also see that Focus was up dramatically. I think the really important thing to point out is, when you take a look at our mix between compact and subcompact, it is very consistent with the industry. This year is a little different than last year in the fact that we have a great compact offering in the Focus. So we're very pleased with that. The others, if we take our small car sales, we've got the best small car share that we've had in 10 years. I've got to go all the way back to 2002. So clearly, when we look at the small car segment and we look at the Focus and Fiesta combined, we're going to take the 10-year best share -- best share in 10 years for sure. We feel that's a really solid performance.

Ken Czubay

Dee-Ann, what I would add to that is, essentially, consumer comes into a showroom and they're looking for a fuel-efficient vehicle and they may have one product in mind or another. But when they go to the Ford showroom, for example, they're going to look at Fiesta, Fusion and Focus and they may even roll over into the Explorer because there's so much cross shopping there. And at the end of the day, while the Fiesta numbers were down, they were down numerically not that much. But when you look at the improvement in Focus, the Focus sales were almost up 11,000 vehicles. And they're settling on a vehicle that the payment's right and it fits them right. They may go in with a predetermined idea, but they walk out with a – they walk out with the best car for their needs. And as Erich pointed out, in the small car, small vehicle super segment, we're really doing well.

Erich Merkle

And as for your question, in terms of hybrids, we're in transition right now on our hybrids, as you well know. And we're coming out with the new hybrids, which will provide better fuel economy, along with plug-in hybrid electric vehicles for C-MAX and for Fusion. We also have a C-MAX variance for hybrid and a Fusion variance for hybrid. So we've got a lot of hybrid and plug-in hybrid alternative vehicle activity in the pipeline. So that will take some time, but that will certainly make itself more apparent as we go through this year, so. Okay?

Dee-Ann Durbin

But I was wondering like the MKZ, what percent of hybrids were sold. Was it up from last year?

Erich Merkle

MKZ?

Dee-Ann Durbin

Yes.

Erich Merkle

I'm sorry, I couldn't quite hear the question, Dee-Ann.

Dee-Ann Durbin

What percent of the vehicles sold were hybrids and was it up from last year? I'm just curious.

Erich Merkle

Yes. It's -- runs about 20%.

Dee-Ann Durbin

Okay. And that was about the same as last year?

Erich Merkle

About the same. Yes.

Operator

Our next question comes from the line of Mike Ramsey with The Wall Street Journal.

Mike Ramsey

Really, this question I guess is for Ellen and maybe I'm following up with what some of the folks in the analyst community are saying. I'm interested in production expansion. It seems like a number of automakers have announced at least small scale production advancements and a number of forecasting firms have already expanded their forecast for the year. And I'm wondering what the tipping point is for you and others as you move into the second half of the year and model year replacement to say, we need to expand production to meet this demand. You're at 58 days' supply. I know you had a pretty strong month. But that's not -- I mean, that's ideal, but if you have another strong month like that, you could be dipping too -- I guess, too low, so to speak. Can you talk about that? Like where is the threshold? If you have another month at 15 million, would you need to expand your production plan and what about other -- if you can kind of see, is there a chance that you might see a broader-based production expansion across the industry?

Erich Merkle

Mike, I think I'll go ahead and take that. We are adding capacity in production this year. In fact, we've confirmed quite a few of these. Louisville assembly, we'll add a full second shift with 1,800 employees during the first quarter of 2012, of course, as production ramps up for the 2013 Ford Escape. The plant will also add a third shift with about 1,300 employees during the second half of the year. We will add also, in addition to that, a second shift at Kansas City assembly for the F-150 this May. And then the other is Michigan assembly plant and the Chicago assembly plant. Both will add third shifts and 1,200 employees each during the first half of 2012. So we definitely have plans to expand our production this year.

Ken Czubay

So, Mike, our goal -- this is Ken. Our goal is always to match production with demand. And as all observers have noted, there's been quite a rapid improvement in demand which is great, and some of the actions we've announced, Erich already covered. And we will also have more comments on that tomorrow at the Analyst Meeting.

Operator

Our next question comes from the line of Alisa Priddle with Detroit Free Press.

Alisa Priddle

Just following up some of Dee-Ann's comments on the Fiesta. I'm just wondering if, have you -- are you sort of adjusting where Fiesta and Focus fall in relation to each other? I mean, when Fiesta was new, obviously, a lot of people were gobbling it up. I mean, are you trying to steer more people to Focus? Are you changing the pricing of the 2 at all? Just sort of wondering if now that you have all of your 3 cars in place, if it's just sort of how each one fits in relation to the other and then the pricing is changing.

Ken Czubay

Well, there's always a dynamic on that and we have not taken any dramatic pricing changes. We're building all the Fiestas we can. We're very pleased with the plan and our pricing points and our positioning in the market with the Focus. We will always meet demand. But right now the demand is quite good for both of them and we're right on target. So we're very pleased. I mean, we are so fortunate to have the showroom we have with Ford right now. Fiesta, Focus, Fusion, Escape, it's an ideal position for our dealers, it's an ideal position for the consumer. They really have the power of choice on the showroom.

Erich Merkle

Yes. We certainly have a very diverse lineup of products today; more so than any time in, really, our Ford history, so we're very excited about that. Okay?

Alisa Priddle

Is there any kind of sense that Fiesta was maybe priced a little bit too high and so people are just finding that it just makes more sense to go into a larger Focus?

Ken Czubay

No, no sense at all. We're balanced in the showroom and we're very pleased with the performance.

Operator

We have no further questions from the media.

Erich Merkle

Okay. Very good. Well, thank you for everyone that participated on the call today. And if you are here in New York, perhaps we'll look forward to seeing you down at the show. We'd love to have you come visit us at the Ford or Lincoln. Thank you very much and we'll look forward to talking to you again next month. Thank you.

Operator

Thank you for your participation in today's conference. This concludes the presentation. Everyone may now disconnect and have a great day.

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