Ford posts big April sales gain amid rebound from pandemic

Amid a hot vehicle market and a rebound from the early days of the coronavirus pandemic, Ford Motor Co. posted a nearly 65% sales gain in April compared to a year ago.

The Dearborn automaker reported selling 197,813 vehicles last month, for a 64.8% gain over April 2020 when COVID-19 case numbers were growing and restrictions aimed at stopping the spread of the virus hit factories and showrooms. Retail sales were up 57.1%.

Industrywide, Morgan Stanley put April's seasonally adjusted annual rate (SAAR) of light-vehicle sales at a record-high 18.5 million units. Sales were up across the industry for the automakers that report sales on a monthly basis, with American Honda, Hyundai, Subaru of America and Toyota North America among the manufacturers posting year-over-year gains. 

"The strength of SAAR continued from earlier stimulus actions," Morgan Stanley analysts wrote in a note this week. But, "amid a semi chip shortage, the question now turns to whether we potentially run out of cars?"

The Blue Oval attributed strong numbers across multiple nameplates to favorable customer reactions to a new, SUV- and truck-heavy portfolio with new electrified options.

Overall, truck sales were up 47.5% year-over-year, while SUV sales were up 119.8%. Ford trucks and SUVs posted their best April retail sales since 2006, according to the automaker, and Ford brand SUVs hit record-high retail sales, up from both April 2020 and April 2019.

Ford also highlighted its progress in selling electrified vehicles, a transition that's still in the early days. Electrified vehicle sales were up 262%, with the battery-electric Mustang Mach-E that launched late last year posting 1,951 sales in April, a hybrid version of the best-selling F-150 pickup truck selling 3,365 units and 3,695 electrified Ford Escapes selling, for a total of 11,172 electrified vehicle sales.

The automaker noted, too, that its transition to an SUV- and truck-dominant lineup in North America is paying off in terms of prices — a factor that executives highlighted while detailing Ford's first-quarter financial results last week. After reporting better-than-expected Q1 earnings, executives pointed to higher prices from lean inventories and more expensive trucks and SUVs as a profit driver.

"Ford's retail sales not only increased 57% over (a) year ago, but also exceeded April 2019 by 24%," Andrew Frick, Ford's vice president of sales for the U.S. and Canada, said in a statement. "Strong customer reaction to our newest products, despite tight inventory, confirms our strategy of investing in electrified vehicles, along with trucks and SUVs."

Bronco Sport, the smaller version of the forthcoming full-size Bronco and the automaker's newest addition to its SUV lineup, saw sales increase 41.7% over March. Ford reported that 60% of Bronco Sport buyers are coming from competing brands, with the largest percentage coming from off-road heavyweight Jeep. Year-to-date, the SUV has netted 37,212 sales.

"Bronco Sport just continues to be an incremental add to our portfolio and our SUV sales," Frick told The Detroit News. "It's actually exceeded our expectations."

In April, 94% of sales came from trucks and SUVs, helping to drive Ford's average transaction price for the month to $43,600 per vehicle. 

"Ford's investment in trucks and SUVs is not only producing greater volume, but replaces sedans like Fusion, which produced an average transaction price of $22,600 in April 2021," the company said in a news release.

On the commercial vehicle side, Ford reported that sales overall were up 127%.

F-Series, the automaker's profit engine, has sold 270,099 vehicles through April, for a 14% year-to-date gain. The truck franchise was up 31.8% in April. It was up 9% over April 2019, according to Frick.

Lincoln brand sales of about 10,500 vehicles represented a 114.9% year-over-year gain.

Both a lifeline and a potential challenge going forward for Ford and its competitors is the dwindling of new-vehicle inventories on dealer lots, owning to a deepening semiconductor shortage that has hit auto production worldwide. Ford warned last week that it could lose as much as half of its planned vehicle production in the second quarter due to the shortage.

But in the meantime, inventories have driven prices up, helping to boost automakers' bottom lines — and executives have said that leaner inventories may become the norm. Ford reported Tuesday that its gross stock sat at about 265,000 vehicles heading into May, for 35 days' supply.

The industry, meanwhile, averaged 33 days' supply, down from 39 last month and 120 days last year, according to Morgan Stanley. General Motors Co. is down to 27 days and Stellantis NV is down to 43 days. Ford's 35 days' supply is down from 123 days last year.

Noting that Ford had higher supply than the industry overall, Frick said the automaker is "in a pretty competitive position to compete as we go into May."

He said Ford will be watching inventory levels closely throughout May and June, and continues to work with dealers to get them the right product mix to meet customer demand. 

"We expect it to get down to a pretty low days' supply, probably somewhere in the 20s, over the next couple months — but it's very vehicle-dependent," said Frick. "The absolute stock has dropped, the days' supply has dropped, but our turn rates have increased to a point that it offsets a lot of that and allows us to still deliver a sales month like we saw in April."

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski