Ford Blames Hurricanes For Getting Beaten By FCA For The First Time Since 2007

Illustration for article titled Ford Blames Hurricanes For Getting Beaten By FCA For The First Time Since 2007
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More bad news for Ford, Honda’s sedans struggle, good news for Elon Musk’s profits and so much more in The Morning Shift for Wednesday, Oct. 3, 2018.


1st Gear: Ford Beaten By Fiat Chrysler For The First Time In A Long Time

This has not been a great year for Ford. Investors continually find its prospects shaky, its new CEO is under a ton of pressure to change that, its plans for electro-autonomy are vague at best, and its plan to kill cars and sedans (save for the Mustang) to focus on trucks and SUVs hasn’t been received well.

Now, more bad news: for the first time since 2007, Ford got beaten in monthly new car sales by Fiat Chrysler, with the latter surging thanks to Ram and Jeep. Via The Detroit News:

Powered by its Jeep and Ram brands, FCA posted a 15-percent increase in U.S. sales last month with 199,819 deliveries, eking past Ford’s 197,404 deliveries in September. FCA has beaten Ford in retail sales five out of nine months this year.

“It was mostly expected to happen this year, as Ford moves away from sedans,” Michelle Krebs, an automotive analyst for Cox Automotive, said in an emailed statement. “It might just be a fluke month, but that’s a significant shift in the automotive world and a wake-up call for Dearborn.”

Ford, for its part, did essentially call it a fluke month, blaming two hurricanes for a bad disparity in year-over-year sales figures. New car demand after Hurricane Harvey that spiked last year’s sales upward, and the recent Hurricane Florence is causing a current sales slowdown. But a decline in the venerable F-series truck isn’t helping things. From Automotive News:

Mark LaNeve, Ford’s head of U.S. marketing, sales and service, summed up the month as a tale of two hurricanes. In the Houston market, which was hit by Harvey in late August 2017, he said Ford’s sales dropped 44 percent, or about 8,000 vehicles, last month from September 2017.

Nationwide, sales were down in all vehicle categories in September, led by a 26 percent decline for cars. Sales of pickups and vans fell 10 percent, while utility vehicles dipped 2.7 percent. Ford Motor’s retail sales dropped 13 percent, while fleet sales fell 6.7 percent, mostly due to planned reduction on rental deliveries and timing of government orders, LaNeve said.

U.S. sales of the F-series pickup dropped 8.8 percent to 75,092, ending a string of 16 months of consecutive year-over-year gains. Average transaction prices for the F series, however, were at record levels of $46,600, up $1,000 from a year ago.


If a “wake-up call” is to be had, one has to wonder what Ford is to do here.

2nd Gear: SUVs Drive Honda, As With Everyone

Even if Ford’s “kill all small cars” plan hasn’t been well-received, the data backs it up—at least in the short term. Over at Honda, growth is also being driven by crossovers and SUVs.


The new Honda Accord is one of the very best sedans you can buy right now, but even that’s not enough to help in a market where sedans are lagging hard. The Accord continued its sales decline in September, and even the Civic was down, although Honda says it has reasons for that. Via Automotive News:

The Accord’s sales slide continued with a 15 percent decline, while the Civic saw a 30 percent drop as the refreshed 2019 model gets ready to go on sale Oct. 10.

The decrease in Civic sales is largely related to supply, a spokeswoman said.

“Because of Honda’s flexible manufacturing approach, we can align our production with consumer demand and the growing trend toward light trucks,” the spokeswoman said. “It’s also worth pointing out that Civic’s going up against a record-setting year in 2017, and while it may be down [from the previous year], nearly 25,000 sales is still impressive within its segment.”


3rd Gear: Some Good News For Tesla

Tesla may be struggling with the deliveries of the Model 3 sedan (and the antics of its CEO) but the new EV is selling extremely well. And it’s creating an optimistic investor atmosphere around Tesla, one that seems to anticipate profits and positive cash flow for the quarter.


Via Bloomberg:

Just days after federal authorities castigated Musk for his tweets about taking Tesla private, the company announced that it had hit its production target for its crucial Model 3 sedan, making more than 53,000 last quarter.

The news was greeted cautiously on Wall Street, perhaps given Musk’s record of late. But the overarching message from Tesla’s results is that it may finally be starting to live up to the chief executive officer’s lofty ambition to do something unprecedented: make money manufacturing and delivering electric cars at scale.

Tesla’s challenges — including logistics snafus, China tariffs and an impending onslaught of new electric vehicles from competitors — remain formidable. But for one day, at least, the attention was on Tesla and its progress rather than its larger-than-life CEO.

“We think deliveries are good enough to support strong financial results,” Ben Kallo, an analyst at Robert W. Baird & Co., wrote Tuesday, adding that Tesla may earn the net income and positive cash flow it forecast for the quarter. He has the equivalent of a buy rating on the shares.


4th Gear: Aston Met With Doubt

Aston Martin went public this week, and immediately was met with investor skepticism about its ability to deliver on its “ambitious” new model plan. Sound familiar? Via Reuters:

Shares in luxury automaker Aston Martin (AML.L) fell as much as 6.5 percent on their market debut in London on Wednesday as investors and analysts raised concerns over its ability to deliver an ambitious roll-out of new models.

The company, which last year made its first profit since 2010 and has gone bankrupt seven times, had priced its shares at 19 pounds each, giving it a market capitalization of 4.33 billion pounds ($5.63 billion).


Turns out being publicly traded isn’t all sunshine and roses.

Also, seven bankruptcies! That’s actually impressive when you think about it.

5th Gear: Feds Warn UAW Probe Isn’t Over

Remember that scandal with the United Auto Workers union where several people have been charged and now imprisoned for siphoning money off FCA worker training centers for lavish gifts? The feds certainly do, and now they’ve widened their probe beyond just FCA, reports The Detroit News:

The warning shot was leveled in a federal court filing Monday involving a lingering dispute involving restitution owed by former Fiat Chrysler Automobiles NV Vice President Alphons Iacobelli, who was convicted in the multimillion-dollar corruption scandal.

The disclosure comes at a crossroads in a prosecution that has led to seven convictions. More people have been linked to the scandal, including the late Fiat Chrysler CEO Sergio Marchionne, UAW President Gary Jones, former General Motors Co. Director Joe Ashton, UAW Vice President Cindy Estrada, former UAW President Dennis Williams and former UAW Vice President Norwood Jewell, none of whom has been charged.

“And the investigation and prosecution are far from over,” Assistant U.S. Attorney Erin Shaw wrote in the court filing.


Expect a lot of heads to roll before this is over.

Reverse: UAW Walks Out On Ford


Neutral: How Does Ford Bounce Back?

Is this just a perception issue, or are there clearer things Ford needs to do to succeed with investors—and buyers?

Editor-in-Chief at Jalopnik. 2002 Toyota 4Runner.


The Accord continued its sales decline in September...

9th Gen Accord owner here (2013). Where Honda went wrong on the 10th gen, for me, is on the inside. It suffers Ford Taurus syndrome. 1) They lowered the seating position 1" from the 9th gen. Getting in and out makes me think of my past F-Bodies. 2) The center console is large and high. The drivers seat is pressed up against it and there is a huge gap between the drivers seat and the door. So, your right side is cramped, and there is more room than you know what to do with on the left side. The center console is so high, it crowds the knee when driving. 3) The drivers seat is very narrow compared to my current 9th gen, its not made for Americans.  I, at 235# sit on top of the seat, not in it.  Very uncomfortable.

Most if this, IMO is due to the Accord being a stretched and widened civic.