Ford Sales Expected to Slide Sharply in March

Ford Motor Co.’s (NYSE: F) U.S. sales are expected to drop 7.5% in March to 234,000, compared to March of last year. Industry sales are expected to rise 3.3% to 1.63 million.

Ford, which sells Ford and Lincoln models, already has been beaten up this past week because it dropped its forecast for 2017 earnings. According to Bloomberg, Ford said the decline would be from $10.4 billion last year to $9.0 billion this.

Kelley Blue Book (KBB), which issued the March car units sales forecast, indicated some of the decline is for positive reasons:

Ford Motor Company could post the greatest sales declines of all major manufacturers; although, a large drop in fleet volume is responsible, while retail sales should be flat or slightly up. As a result, Fusion and Focus could report declines of more than 20 percent in March 2017. Similarly, Transit and other Ford vans, which are popular in commercial fleets, could fall 20 percent.

On a more negative note, in the full-sized pickup competition, in which Ford is the perennial leader based on volume, General Motors Co. (NYSE: GM), which sells the Chevy, Buick, GMC and Cadillac brands, should pick up some ground:

General Motors is expected to gain the most market share in March 2017, up nearly a full percentage point. In particular, the automaker’s SUV lineup could grow sales by 25 percent, with increases led by three all-new models introduced last year, including the Chevrolet Equinox, Buick Envision and GMC Acadia. GM trucks, especially the Silverado, could have a strong month as well, growing 10 percent with heavier incentives likely playing a role.

The bad news for GM is that incentives are appropriately frowned on by investors.

Ironically, the car company that has been hit by the most bad news over the past year is expected to post the largest gain. Volkswagen sales, which include VW, Audi and Porsche, are expected to rise 11.8% to 55,000. Perhaps the public has started to forgive the German car company. Nevertheless, VW’s market share in the United States is only 3.4%, against 24% in Europe and a strong presence in China. VW’s efforts to crack the American market were a failure well before the scandal.

Subaru, which has posted impressive gains in the United States, will do so again in March, according to KBB. Its sales are expected to grow 9.6% to 54,000.

The two other car giants in U.S. sales, Toyota Motor Corp. (NYSE: TM) and Fiat Chrysler Automobiles N.V. (NYSE: FCAU), are expected to post lackluster numbers. KBB forecasts Toyota, which sells Toyota, Lexus and Scion, will sell 218,000 cars, down 0.8%. Fiat Chrysler, which owns Fiat, Chrysler, Jeep, Ram and Dodge, will show a sales increase of 2.8% to 205,000.

In sum, KBB claims 2017 is off to a good start, particularly given that last year the industry posted record sales.

KBB analyst Tim Fleming said:

Kelley Blue Book expects manufacturers to report mostly positive sales numbers this month, capping a steady first quarter with an average SAAR of 17.4 million. Despite considerably higher discounts and incentives, first quarter sales totals will likely only finish flat versus last year, a signal of weakening consumer demand for new vehicles. As sales cool after years of robust growth, adjusting production accordingly and managing supply, especially in car segments, should be top priorities for automakers.

  Sales Volume 1 Market Share 2
Manufacturer Mar-17 Mar-16 YOY % Mar-17 Mar-16 YOY %
General Motors (Buick, Cadillac, Chevrolet, GMC) 275,000 252,128 9.1% 16.9% 16.0% 0.9%
Ford Motor Company (Ford, Lincoln) 234,000 253,064 -7.5% 14.4% 16.0% -1.7%
Toyota Motor Company (Lexus, Scion, Toyota) 218,000 219,842 -0.8% 13.4% 13.9% -0.6%
Fiat Chrysler (Chrysler, Dodge, FIAT, Jeep, RAM) 205,000 199,467 2.8% 12.6% 12.6% -0.1%
American Honda (Acura, Honda) 146,000 138,221 5.6% 9.0% 8.8% 0.2%
Nissan North America (Infiniti, Nissan) 171,000 163,559 4.5% 10.5% 10.4% 0.1%
Hyundai-Kia 130,000 133,589 -2.7% 8.0% 8.5% -0.5%
Volkswagen Group (Audi, Volkswagen, Porsche) 55,500 49,629 11.8% 3.4% 3.1% 0.3%
Subaru of America 54,000 49,285 9.6% 3.3% 3.1% 0.2%
Total 3 1,630,000 1,577,491 3.3%
1 Historical data from OEM sales announcements
2 Kelley Blue Book Automotive Insights
3 Includes brands not shown