Ford stock (NYSE: F) drifted to a multi-month low of $10.61 in intraday trading yesterday before eventually settling down at $11.20, 1% lower than its previous day’s closing. The company released its second-quarter delivery report yesterday which showed a rise in sales even as the US automotive industry suffered a slump in the quarter.
Sales of discretionary products are taking a hit amid rising inflation. After Micron warned of a slowdown in global PC sales, Evercore ISI downgraded HP which led to a fall in the stock. Recently, rival General Motors said that its US deliveries fell 15% to 582,401 vehicles in the second quarter. However, the company said that its market share in the US, which is the world’s most profitable automotive market, rose to 16.3%. Fiat Chrysler’s US deliveries also fell 16% YoY in the second quarter.
General Motors has increased its market share in the US for three quarters as Toyota Motors’ production has taken a hit due to chip shortage. Ford also managed to increase its market share in the US to 12.9% in June.
Ford delivered 152,262 cars in June, which was 31.5% higher than the corresponding period last year. Total US car sales fell 11% over the period. In the second quarter of 2022, Ford delivered almost 484,000 cars, which is 2% higher than the corresponding period last year. However, as the company’s sales had slumped in the first quarter, its US sales are still down 8% YoY in the first half of 2022.
Ford Saw an Increase in F Series Vehicles
Meanwhile, Ford saw an increase in its F Series sales. The company sells the F-150 pickup which has been America’s best-selling pickup for decades. Commenting on the June deliveries, Andrew Frick, vice president, Sales, Distribution & Trucks, Ford Blue said, “Amid industry-wide supply constraints, Ford outperformed the industry driven by strong F-Series, Explorer and new Expedition and Navigator SUV sales.”
He added, “Combined, these vehicles represented just over 56 percent of our sales in June – up about 8 percentage points from May. F-150 Lightning was America’s best-selling electric truck in June in its first full month of sales, while our overall electric vehicle sales were up 77 percent over last year.”
Notably, Ford has restructured its business and named the legacy automotive business Ford Blue. It has named the electric car business as Ford Model e. Earlier this year, the company started to offer the electric version of the F-150. The model is called F-150 Lightning and analysts expect it to be a key driver of Ford’s earnings in the coming years.
Tesla is Pausing Production for Plant Upgrades
Tesla is pausing production at its Shanghai and Berlin Gigafactories for upgrades. The Shanghai Gigafactory is believed to be the company’s most productive plant. Tesla’s CEO Elon Musk recently said that the Berlin and Austin Gigafactories are losing a lot of money.
Tesla also reported a fall in its second-quarter deliveries due to the lockdowns in China. The company also lost the position of the global EV (electric vehicle) market leader to Warren Buffett-backed BYD Motors. However, Goldman Sachs and Deutsche Bank believe Tesla stock is a buy despite the short-term woes.
Coming back to Ford, the company is looking to transform the business under its CEO, Jim Farley. It has doubled down on its investments in electric and autonomous cars as the company tries to take on pure-play electric vehicle companies. It has also exited several unprofitable markets and is instead focusing on profitable markets.
Ford stock fell to a multi-month low yesterday. Automotive stocks have been under pressure amid fears of a recession even as auto companies are currently posting near-record profits. Ford’s dividend yield has risen to almost 3.6% now amid the crash in its stock. The company restored its dividend in 2021 after suspending it in 2020. General Motors has meanwhile not restored the dividend.
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