Automotive giant Ford reported a jump in sales for the first month of 2015 with the company hoping for even better results in the months to come, a report said.
The company said on Tuesday that its U.S. sales rose 15% in January, beating Wall Street estimates and giving Ford its best January sales performance in over a decade, The Motley Fool (TMF) said.
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The increase is welcome news for Ford investors, who have waited through months of sluggish sales as the company launched several major new products. But the most welcome news for investors will be that the gains were led by its most profitable products, the report said.
Ford reported total sales of 178, 351 units for the month with the F-Series posting its best January sales month since 2004, the Detroit Free Press said.
It’s no secret that Ford’s F-Series pickup trucks are the key drivers of profit in its North America region, and the region has recently carried the company, TMF said.
However, tight supplies of F-150 pickups hindered Ford’s ability to generate sales gains in 2014, and profits suffered. But if January is any indication, this year is already looking much better with F-Series sales rising 16.8%, the report said.
“Customer demand is strong for our newest vehicles, ” said Ford sales analyst Erich Merkle, noting the new 2015 F-150 is only spending an average of 12 days on dealer lots and the most-expensive trim levels are selling in 10 days or less, the Press said.
Ford CEO Mark Fields hinted last week that the F-Series would post its best January sales result since 2004, a record year, according to TMF.
But pickups weren’t the only profitable products to post big gains for Ford in January. SUVs, Lincolns, and Mustangs all performed well, too, the report said.
Analysts have debated whether lower gas prices would boost sales of trucks and SUVs in the U.S. Merkle said Ford believes fuel prices won’t be a significant driver of consumer preferences in the long run, but if Ford’s results for January are any indication, lower gas prices certainly haven’t hurt sales of its most profitable products, TMF said.
Low fuel prices are providing a boost to consumer spending, said Ford chief economist Emily Kolinski Morris. Small car sales are seeing some impact, as the segment overall dipped to 19% of total industry sales from 20% a year ago. But CEO Fields said last week it is best to wait for the full quarter results for a truer gauge of the impact of lower gas prices, the Detroit Free Press said.
TrueCar estimates that Ford’s overall average transaction price in January was $34, 441, up 1.3% from a year ago, with incentive spending down sharply, according to TMF.
Top-end trucks such as the F-150 Platinum are among Ford’s most profitable products anywhere in the world. It’s another sign that after a challenging 2014, all indicators point in the direction of a much stronger 2015 for Ford’s bottom line, the report said.
Lower gas prices, easy credit and new hiring fueled a torrid start to the new vehicle sales year in January with nearly all automakers sharing in the bounty. Big is back as pickup trucks, SUVs and large crossovers did extremely well as fuel economy became less of a concern for carbuyers, the Press said.
