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Ford - When Perfect Isn't Good Enough

Jul. 05, 2017 5:40 AM ETFord Motor Company (F)GM36 Comments
Leo Nelissen profile picture
Leo Nelissen


  • The story continues, light weight truck sales keep growing while car sales are crashing.
  • Ford is well positioned with a few well-selling brands and models.
  • Despite slowing credit growth and rising delinquencies: heavy duty truck sales are growing again.

Monthly US car sales are by far the best coincident indicator for the car industry. Simply because they frequently tell you how the business is doing regardless whether one has a bearish or bullish view. That's what this article is all about. I will give you a breakdown of all important aspects of the June sales report and elaborate on important trends while providing you with an extra indicator that might give us positive news about Ford (NYSE:F) and the automotive industry in general.

Source: Wikipedia

The June report is one of the more interesting ones. It is being published in a time of high negativity. Soaring delinquency rates, falling automotive credit and depressing historical sales numbers.

Car sales started their period of weakness and contraction in the first quarter of 2016. In the third quarter of the same year, we saw peaking automotive credit. Credit growth is currently below 3% after falling in a straight line without any bounces whatsoever.

That being said, I am afraid that June is no different. Car sales declined 13.2% versus June of 2016 while the YTD performance is 11.4% down compared to the same period in previous years. The good thing, is that light-duty trucks soared 4.1% in June and 4.6% YTD. Add to that the sales volume of more than 933 thousand units versus 'only' 541 thousand cars. This brings total sales growth to minus 3% versus June of 2016 and negative 2.1% on a YTD basis.

Source: Motor Intelligence/Wall Street Journal

This shows us two things. The first one is that sales are slowing indeed. There is no denying that macro factors are a big burden on car manufacturers. The second point is much more positive. It is not a recessionary environment when light trucks keep soaring month after month. A serious slow down would have

This article was written by

Leo Nelissen profile picture
Welcome to my Seeking Alpha profile!I'm a buy-side financial markets analyst specializing in dividend opportunities, with a keen focus on major economic developments related to supply chains, infrastructure, and commodities. My articles provide insightful analysis and actionable investment ideas, with a particular emphasis on dividend growth opportunities. I aim to keep you informed of the latest macroeconomic trends and significant market developments through engaging content. Feel free to reach out to me via DMs or find me on Twitter (@Growth_Value_) for more insights.Thank you for visiting my profile!

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