Ford September 2015 Sales Call Notes

Ford Motor’s (F) Management Presents at September 2015 U.S. Sales Conference Call

Another strong month for auto sales

“we estimate total industry sales, including medium and heavy trucks are coming in at about 1.3 million to maybe just a little over 1.4 million units in that range for September. This would translate into an industry SAAR that we would expect to be around 18 million, again, that would include medium and heavy vehicles. This would mean that then the total vehicle industry, including medium and heavy trucks was likely up about 13% in September, while the month benefited from a strong Labor Day weekend sales, which were not included in September 2014 results. We view the September’s industry performance as another strong sales month.”

It benefitted from Labor day shift, but it was a strong month in general

“Just the fact that it was in September and it wasn’t in September year ago you’re going to see quite pretty decent increase we’re calling the industry up 12 or 13. But I can tell you that we had a strong Labor Day period. We had a sales event that ended the day after Labor Day, but we stayed strong for the balance of the month. So there was a real whole lot of fluctuation in our case of performance to objective throughout the entire month, it was good from beginning to end one of those really special strong months.”

The VW stuff has been a non-factor to our dealers

“I mean, the news broke mid-September. But we’ve – I’ve been with a bunch of dealers since the news broke. And in terms of Ford dealers, it’s been zero commentary. And so it certainly hasn’t gotten into their radar screen, so it’s been a non-factor in terms of our dealer body that, the VW diesel issue.”

People are moving into SUVs and trucks from passenger cars

“We’ve seen customers moving from the passenger car category into SUVs and to trucks. Overall, there’s a very good trend for Ford Motor Company”

Ford at DBaccess Conference Notes

Jim Farley – President, Europe, Middle East and Africa

We believe that we have to bet on strong brands

“we believe we have to bet on strong brands. And we have a different brand philosophy than other companies. We’ve simplified the portfolio of brands in the Company. And we believe the Ford brand is quite flexible actually where we can sell.”

move the brand to a more emotional space

“On the brand side, we want to really move to brand much more to emotional space. In the past, we’ve been trying to compete on technology. And although that’s very important for customers in Europe, it’s become less of a differentiator in the space that is unique to Ford. In the Smart Mobility space that may be the exception, but for the brands, this is more emotional, heavily utility support derivates that are higher transaction place that have more of an opinion. This is the area where we’re going to move the brand more and more. ”

We need to make the car ownership experience closer to a mobile phone where it’s an ongoing relationship

” I think if you transform our fixed marketing investment because of the ownership. If we make the ownership experience to a mobile phone, we almost never talk to an owner once they own the vehicle. If we can transform the frequency of interaction with the customer which is very realistic with the connected car and a great set of feature content, we can really change a loyalty model in our company and that will really change the fixed marketing and marketing paradigm”

Ford at Deutsche Bank Conference Notes

Bernard Silverstone – Chairman and CEO, Ford Motor Credit Company and Group VP, Ford Motor Company

We’re not too concerned about anything that is going on in subprime auto lending

“If you look at the Experian report or the Moody’s report, they validate that actually if you refer just to subprime rather than high risk using this consistent FICA measure. But it’s grown with the industry, risk grown in proportion. So as the industry is coming back, then so has the subprime. And those customers, of course, are coming from a perspective when things were really tough and credit was rationed, those customers weren’t getting access to credit at all. So they’ve only grown back to pre-’07 levels. They haven’t grown back in excess of that. There are going to be individual examples. I mean I think there is some relatively new start businesses that need to get seasoned. I can’t comment on how they’re going to perform in the future. So yes, there may be some individuals that when you look at the macro numbers, it’s not going in any way that we would be concerned about.”

May be some changes at the margin when rates go up

“I would say what’s happening is even customers who might normally pay cash are taking advantage of the very low rate environment. It’s hard to predict the future but I expect when rates go up, maybe some of those customers might revert to cash, for example. ”

Relatively limited financing of vehicles in China

“I would say that what we are seeing is it’s growing. It’s about from our numbers about 20%, 22% of retail sales is financed. There are reports – I think IHS is projected that it could go to around 30% by the end of this decade. And I certainly see enough evidence to suggest that could be a reasonable estimate.”

We’re very attuned to the fact that the marketplace is changing

“we’re very attuned to is the fact that the marketplace is changing, consumer preference are changing and you’ve got new disruptors that we wouldn’t have thought of talking about for – just need to pickup any automotive press and those names associated with the future of autonomous vehicles we would have historically not associated with automotive at all; Apple, Google, et cetera. So it’s clear that we need to be equipped to be very nimble, which is why we put the focus of our employees that it’s innovation at all levels.”

We just want to see what’s going to win first

“But I think that needs to merge before we make decisions around make-buy for example. Those really are decisions you make when you really understand what it is you’re going to kind of deliver. The important thing is first to understand what technologies are going to be winning, what customer deliverables will be like, products, services, combinations are really going to be winning. And once you understand that, then I think we can decide how we play in those different areas. We do accept it’s going to change”

Ford March 2015 Sales Call Notes

Expect industry to be just slightly off from a year ago

“we see overall industry sales for March, including medium and heavy trucks totaling in the low 17 million vehicle range, on a seasonally adjusted annualized basis. We believe total sales on an absolute basis to be in the range of 1.54 million to 1.55 million vehicles. This would mean the industry is just slightly off or perhaps flat compared to a year ago.”

Last March was pretty good though

“I’m going to start with retail, were up 1% in March, actually over strong March a year ago. So up 1%, making it our strongest retail March in nine years, we had the best March — month of March in nine years.”

Very little impact from weather this year

“I don’t believe there was, Colin. I think, if there was an impact it was minimal. I think March, a year ago was more impacted. So I think a year ago March, the February we were in the deep freeze in many parts of the country. So I think March was kind of a breakout month a year ago, but this year I saw, in my opinion very little impact.”

I think it was a solid month for the industry with a difficult comparison

“I could tell you that part of the industry — are calling the industry being flat to slightly down as fleet, including our own which was purely a timing issue related mainly to getting Kansas City up and running and then — but I have never put much stock in selling day adjusted but I can tell March of a year ago was a five weekend month, plus coming out of really tough weather over extended period of time. So I think last year’s, last March might have been a little more buoyant than maybe normal in terms of year-over-year comparisons but I think those are the big differences to me. I mean it didn’t — it felt like s good solid month for the industry’

“I think the comparison is a little bit difficult to March of last because of what happened with the weather and the comparison.”

Ford February 2015 Sales Call Notes

4-7% increase over last year

“On an absolute basis, we believe the industry sales were about 1.27 million to maybe 1.3 million vehicles total again and that amounted to a 4% to about a 7% increase versus February of last year.”

Small utility vehicles close to surpassing small car sales

“February was again a relatively soft month for small car sales, which represented just less than 19% of the overall industry. This compares to 20% last year. Small utilities are coming into tough year-over-year comparisons, but continue to gain ground. Last month, small utilities represented 18.5% of the overall industry, about a full higher compared to a year ago.”

Fuel prices have risen in recent weeks

“close to 70% of consumers citing now as a good time to buy a vehicle. Fuel prices rose 19% after they troughed in January. As I mentioned earlier, rising fuel prices have to some extent negatively impacted consumer sentiment in recent weeks.

However, fuel prices are still about 35% below peak levels in June 2014. Lower fuel prices will continue to add additional spending power to consumers, and thus boost the overall economic growth.”

Industry slowed in the last week

“There was definitely a slowdown from about the 20th on in the month. I don’t know. I haven’t seen all the numbers coming from the competition yet, but from what I have seen, it seems like it was industry-wide. Why? I don’t know. I quit trying to explain the weather and its impact many, many years ago. So I really can’t attribute to one thing or another. Don’t know on the gas price. Maybe somebody in the room can help with that. But I don’t think there is any question, the industry slowed a little bit in the last week.”

Ford September 2014 Sales Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Industry sales up about 10%

“Reviewing early incoming data, we estimate total sales, including medium and heavy trucks likely closed out September in the mid to high 16 million vehicle range on the seasonally adjusted annualized basis. This would mean absolute sales totaled approximately 1.265 million to 1.275 million vehicles, providing an industry increase of approximately 10% compared to last September.”

Sales at retail 84% of total

“It was another solid month for retail as retail represented about 84% of total sales last month. We estimate the retail SAAR operated right around the 14 million vehicle mark in September.’

Full sized pickups had a good month too

“Taking a look at some industry details, full-sized pickups had a very good month at almost 13.5% of the overall industry. This is over a 4-point higher than a year ago’

We think the industry is doing quite well

“the month of September got off to a little bit of a slower start, but still very strong in the mid. We expect to be in the mid to upper 16 million as our range.

So, again, it might be a little bit of a switch in terms of the tempo between the two months, but bottom line the fundamental looks very sound. And again, the six-month growing average is closer to that 17 million as our range. So as Emily shared, we believe the industry is quite sound.’

Growth is starting to plateau but it’s still supported here

“on previous calls we have also noted that, we are certainly reaching a point where the rate of growth in industry sales is beginning to moderate. So we are getting closure to what would be likely plateau in terms of the industry sales space. But at the same time we think at those levels the industry does remain very well supported, again when we look at the physicals underlying the sources of new vehicle demand and particularly the fact that the latest Polk data just came out within the past week or so. The average age of vehicle on the road is still by 11.4 years.’

Ford 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

New CEO

“presenting today are Mark Fields, who became President and CEO of Ford earlier this month”

Same ONE ford plan

“In closing, our ONE Ford plan is built on compelling vision, a comprehensive strategy and relentless implementation, all leading to profitable growth around the world. We remain fully focused on continuing the success of our ONE Ford plan, in fact accelerating our pace of progress.”

Auto financing market is in balance

“The entire auto financing market, it really is a balance. You said pick one thing; I don’t know what the one thing is. Leasing is pretty high. You are seeing extended terms grow, and you are seeing subprime grow. So with that, if there’s big changes in variable marketing strategies, if there’s big spikes in interest rates, those are the types of things that are going to create imbalances. ”

No new plan just because new person

“I had the opportunity to sit side-by-side with Alan for the last eight years in terms of developing the strategy and then the implementation of that. So the indication that there has to be a new strategy, because there’s a new person sitting in the chair, I wouldn’t necessarily assume that.”

Ford 3Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Our One Ford plan shown here is the foundation for everything we do. Across the Ford enterprise, we continue to aggressively restructure the business to operate profitably at the current demand and the changing model mix to accelerate development of new products our customers want and value, finance our plan and improve our balance sheet, and work together effectively as one team leveraging our global assets.”

“we were upgraded to investment grade by S&P. With this upgrade, the four major rating agencies that rate us now report Ford and Ford Credit as investment grade with a stable outlook.”

“North America continued to perform very well, achieving a pretax profit of $2 billion or more and an operating margin of 10% or more for the sixth time out of the last seven quarters.

In the third quarter, this was driven by a strong industry and a robust full-size pickup segment, our strong product lineup, U.S. market share growth, continued discipline in matching production to real demand, and a lean cost structure, even as we invest more in product and capacity for future growth.”

“The volume improvement mainly reflects higher U.S. industry sales, increasing from SAR of 14.8 million to 16.1 million units”

“We continue to have success with what we call the super segment vehicles. This is small vehicles and small to midsized cars, particularly on the coasts.”

“Europe’s market share improved 0.2 of a percentage point, from 7.8% to 8%.”

“Third quarter market share in the region was 3.7%, 0.6 of a percentage point higher than a year ago, and a quarter record. The improvement was driven by China, which isn’t shown, where our market share improved 0.8 of a percentage point to equal last quarter’s record of 4.3%”

“We now expect full year industry volume of about 15.9 million units in the U.S., about 13.6 million units in Europe, and about 21.7 million units in China.”

“Our total company third quarter production volume, shown in Appendix 5, was about 1.5 million units, 187,000 units higher than a year ago, reflecting higher volumes in all regions. We expect total company fourth quarter production volume to be about 1.6 million unit”

“There’s nothing that has changed about our plan that we announced last November, and I’m clearly excited and honored to continue to serve Ford.”

“as we start to satisfy that pent up demand over this next couple of years, it will come down to more of a normal growth rate based on demographics and discretionary income, and we think that it’s going to be in the 16 million to 17 million range.

I think the peaks that we’ve seen in the past that were fueled by a lot of factors as you know, we don’t expect to see. And I think that nice, steady rate that reflects those fundamentals would be welcome by all. And I think that’s the way we’re looking at that right now.”

“The top line performance in China was really remarkable. Through the first nine months, wholesales were up 51%. The share was growing. Revenue strong, inventory’s in great shape. So the China story is an incredibly positive story.”

“It’s a great question. Overall, as you mentioned, the full-size pickup segment is doing well this year, particularly versus last year. It’s up over a point, and obviously as you mentioned that’s driven a lot by the housing market.”

“Commodities, whether on a year over year basis or quarter to quarter, are pretty benign. So no, I don’t think commodities are anything to look at.”

“in Asia Pacific we’re going to be increasing our manufacturing capacity there to 2.9 million units, up from about 1.5 million in 2011, really accelerate the growth that we’re seeing in Europe.”