Ford Says Sales Are Rising Faster Than Expected; Raises Forecast
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NEW YORK (WWJ) - Ford says 2009 sales are improving faster than their ability to build more vehicles. So they are increasing their sales projections, but slightly lowering their market share expectations.
“We’re now expecting U.S. industry sales to be higher than previously assumed,” said Ford president of the America’s Mark Fields. “But, all of our production actions won’t be into place until later in the year.”
Fields tells investors in New York that Ford now expects industry sales to run between 14.5 and 15 million units this year. Entering the year, Ford’s forecast was for sales of just under 14 million.
Ford is planning to add 400 thousand vehicles to its production schedule this year, but Fields says most of that won’t happen until the second half.
“So, production will be lower than demand for our products,” he said. “So, as a result, Ford’s U.S. total market share, during this period, and, on average, for the full year, will be lower than 2011.”
That’s a change, Fields says, from the original expectations of a steady market share in 2012.
The seasonally adjusted annual sales rate for the first quarter was 14.9 million units. While the industry has been seeing sales grow since the middle of 2011, the pace has picked up in recent months.
“We had been planning for industry sales to improve to this level,” said Fields. “But it has happened sooner than we planned. We’re starting to see not just people we call ‘must buyers’ but we’re also seeing ‘want buyers.”
In recent weeks, independent analysts have been raising their sales projections to the mid to upper 14 million range. They cite improving consumer confidence, lower unemployment, and pent up demand. That demand has been playing out as high gas prices send consumers in search of more fuel efficient products.
Car sales peaked at around 17 million units in the middle of the last decade, then crashed in 2008 and 2009. They have been growing steadily since then. Most analyst believe they won’t approach pre-recession levels for at least two more years.