On Tuesday, Ford Motor Company (F -0.32%) is excited to announce that US vehicle shipments jumped more than 30% year-on-year last month.
There’s only one problem: June 2021 is a terrible month for Ford. At the time, its sales were down 27% as a global chip shortage wreaked havoc on its production and sales. Additionally, year-to-date in 2022, deliveries are down 8% even though Ford has faced easy year-on-year comparisons.
Ford appears to be losing share in key market segments. Unfortunately, the automaker is twisting the numbers to make it seem better than explaining to investors what’s going on. That’s a worrying development for Ford shareholders like me.
Months below standard
While Ford’s June 2022 sales release mentions “ongoing industrial semiconductor chips and supply constraints,” it mainly focuses on year-over-year sales gains and market share gains for various models last month. This gives investors a misleading picture.
For example, dealers shipped 57,673 F-Series trucks in the US last month, up 26% year-on-year. Yet that’s still down from 65,188 deliveries in June 2020 (at the start of the COVID-19 pandemic, no less) and 79,204 deliveries in June 2018.
In total, Ford’s 152,252 domestic shipments in June showed a 34% decline compared to June 2018. (Ford did not report monthly sales in 2019 or 2020.) The results have not been much better year over year. Ford dealers shipped 915,820 vehicles in the US in the first half of 2022: down 26% from the first half of 2019 and down 28% from the first half of 2018.
To be sure, sales are down across the industry, mainly due to supply constraints. But Ford has suffered a much worse decline than most of its competitors.
Loss of share in profitable market segments
In a recent sales release, Ford also stated, “The F-Series has expanded its truck leadership during the first half of the year, beating second-place competitors with approximately 40,000 trucks.”
This is too much. First, Ford’s F-Series trucks are just sold out General machine‘ (GM 1.95%) Chevy Silverado as many as 35,206 units in the first half of this year. Second, GM is also building a second high-volume full-size truck model: the GMC Sierra. Combined domestic shipments of the Silverado and Sierra have surpassed the F-Series by 28% (83,732 units) this year.
Indeed, GM’s full-size truck shipments this year in the US were up significantly compared to 2019 and down just 2% from 2018. F-Series shipments fell by about a third over the same period.
Similarly, while Ford appeared to be gaining traction in the lucrative full-size SUV market a few years ago, shipments of the Ford Expedition and Lincoln Navigator have fallen 45% this year compared to the same range in 2019. SUV shipment sizes slipped just 7% over the previous half. first 2019.
What really happened?
In short, there’s no need to dive deep into Ford’s US sales results to see that it has got off to a weak start in 2022. Regardless of whether you compare the Blue Oval to its competitors or to its own results from several years. then, the company underperformed.
The bigger problem for investors is that the company has not provided a clear explanation for why it lost market share. Perhaps supply chain bottlenecks remain a major problem. If so, that’s not much of a concern, as long as Ford hopes to ramp up production again soon.
On the other hand, if Ford voluntarily slowed down production of some models as demand declined, that would be much more worrying. Ford should stop pretending that its 2022 sales figures are good (or even half decent) and focus instead on explaining why they’re lagging — and when the tide will turn.
Adam Levine-Weinberg has positions at Ford and General Motors and a short $30 January 2023 call at Ford. The Motley Fool has no position in any of the listed stocks. Motley Fool has a disclosure policy.