Ford’s (NYSE:F) recorded car sales of 49,994 in October 2011, a drop of 8% from 54,430 in October 2010. Despite the company’s efforts in improving its fuel-efficient line-up of vehicles, the overall weak economy is taking a toll on its car sales. However, year-to-date, Ford’s car sales improved 7% from 2010 to 2011. [1] Some of its branded cars like Fiesta, Fusion and Focus have given strong retail sales and a better sales mix in the medium term should give a boost to its market share in the North American car market. Ford mainly competes with General Motors (NYSE:GM), Toyota (NYSE:TM), and Honda (NYSE:HMC).
Besides, Ford could also gain from the recent floods in Thailand that have disrupted the manufacturing facilities of Japanese automakers Honda and Toyota, something we discussed in a note titled Is Japanese Automakers’ Pain the Big Three’s Gain?
Our complete analysis for Ford’s stock is here.
Amid Economic Concerns, Ford Continues to Roll Out Fuel-Efficient Vehicles
Ford’s retail sales of vehicles in the U.S. dropped by 8% q-o-q in last quarter, mainly attributable to a decline of 7% in car sales during the same period. Meanwhile the Federal Reserve has also reduced its forecast for economic growth through 2013, adding to concerns of the ailing automobile market in the U.S. (Read: Wimpy Economy Hurts Ford Car Sales but Stock Good for $14)
Ford however is focusing on improving its fuel-efficient portfolio as it looks to gain higher market share. It has partnered with Toyota to co-develop hybrid systems that will provide greater fuel efficiency without compromising on performance, as well as develop in-car telematics and Internet based services that can lead to a spike in car sales.
For the month of October, “Fiesta sales were up 7 percent, with 4,124 vehicles sold. Fusion sales were up 4 percent, totaling 18,094 vehicles, another monthly record for Ford’s midsize sedan,” as per the company’s press release. [2]
While we estimate Ford’s car market share in North America will decrease from 12.2% in 2012 to 10.2% by the end of our forecast period, Trefis members expect a decrease from 12.6% to 11.7% during the same period.
We currently have a Trefis price estimate of $14.15 for Ford’s stock, about 20% above the current market price.
Understand How a Company’s Products Impact its Stock Price at Trefis
Notes:- Auto Sales in Oct 2011, WSJ, Nov 1, 2011 [↩]
- Ford’s October 2011 Sales [↩]
