Ford May 2016 Sales Call Notes

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Mark LaNeve

Memorial Day closed strong

“Colin, Memorial Day weekend was pretty strong. I mean we closed the month up pretty strong, had a good last weekend, call it four, five days, Friday through to the close yesterday across really cars, trucks and SUVs. You have the calenderizatin, which had affect between April and May. April was a five weekend month and May was a four weekend month. I don’t want to over talk that or over think that. But, May a year ago you have — was five weekend; you had Memorial Day on the fourth weekend, which as we know is a strong selling weekend and a week later you close the month, which you always have a big weekend when you close the month. I am not reading too much into the April, May; the April ran a little stronger. And May from a SAAR position versus a year ago little weaker, but some things happen when you are into a very strong industry. And we closed really well.”

Movement from passenger cars to SUVs is now a strong 5 year trend

“Segmentation of moving passenger cars into SUVs and into some extended pickup trucks is now very strong five-year trend with no indication of slowing down anytime soon. So, the passenger car side of market is getting hit by segmentation trends, which are really consumer preference trends. And to some extent that really plays into Ford’s wheelhouse, because we’re incredibly strong in SUV and truck and van part of the market.”

Consumer preference is driving SUVs

“consumer preference right now is what’s really driving the segment. If you think about in a very simplistic level with crossovers, SUVs, you get the higher eating [ph] position, you gave great visibility, you get great utility, generally speaking very good all weather performance, which is important to many customers, great safety features. And now, not that long ago customers had to make trade-offs in terms of fuel economy, ride and handling characteristics, technology, some safety features. And now, in our Ford SUV lineup, they don’t have to make any of those trade-offs. You get excellent fuel climb, we have all the technology. And so, we see this as a continuing trend. Our research indicates that baby boomers’ age prefer these vehicles. At the same time, the millennials starting to eventually get married and have families, they prefer these vehicles. So, we think that there is great buoyancy currently in the market, that’s obviously showing up in the numbers and that continues for a number of years.”

Passenger cars have fallen from 53% of the market to 40%

“The best way I can equate that Megan is roughly five years ago, six years ago, passenger cars were about 53% of the overall industry. Last year, I believe they were 42%; this year, it’s looking like close to 40%. Do we see that rate of decline slowing a little bit? Yes. But, we don’t see it stopping, I can tell you that. ”