Legacy automaker Ford (NYSE: F) has introduced declining gross sales for its fiscal first quarter. The Michigan-based automotive producer reported first-quarter gross sales of 432,132 automobiles — down 17% on the year-ago quarter.
However what precisely has brought about such a major fall off?
Why are Ford’s gross sales down?
We had hoped we wouldn’t nonetheless be saying this by now, however semiconductor shortages are nonetheless wreaking havoc on the broader auto trade. Ford witnessed this primary hand, with nearly all main segments trending down for the quarter. SUV gross sales have been down 5%, truck gross sales have been down 23%, and automotive gross sales plummeted by a whopping 49%.
One of many few shining lights for the corporate was the efficiency of its not too long ago restructured electrical car (EV) arm, which reported a notable bounce of just about 38% in comparison with the primary quarter of final 12 months. This follows the broader trade pattern the place different EV firms akin to Tesla and Polestar famous robust rises in U.S. gross sales for the 12 months’s opening quarter.
What does this imply for Ford buyers?
Regardless of a pointy decline in gross sales, that is no time to panic — not but anyway. Ford is trying to navigate far-reaching provide chain issues, an unsure shopper local weather, and fears round rising inflation. All of those have mixed to ship gross sales sliding. There are some constructive indicators heading into Q2, nonetheless. Vice President of Gross sales, Andrew Frick, outlined that,
“Whereas the worldwide semiconductor chip scarcity continues to create challenges, we noticed enchancment in March gross sales, as in-transit stock improved 74% over February.”
The corporate can be coping with robust demand for a few of its newer automobiles, with gross sales of its Maverick pick-up truck rising by 115% from February to March alone. Chip shortages are sadly going to proceed to ravage Ford, however that downside is one which impacts your entire trade. Ford ought to have the monetary sources to proceed to tread water till these provide pressures ease.
On prime of that, the agency’s new EV technique seems to be paying dividends because the world strikes towards extra widespread adoption of battery-powered automobiles. With the corporate anticipating to have a 3rd of its gross sales come from its EV arm by 2026, this 12 months’s progress to this point must be seen favorably by shareholders.