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Morningstar | Ford's September Sales Faced Difficult Comparable With Hurricane Harvey Last Year

Automakers reported September U.S. light-vehicle sales that faced a difficult year-over-year comparable due to September 2017's large boost from replacement demand after Hurricane Harvey in Houston and from one less selling day in September 2018. Total sales for this September, excluding Audi, which has not reported yet, came in at 1.42 million, down 5.6% year over year. We calculate that on a constant selling days basis, sales declined by 1.8%. We expect the vast majority of the hurricane comparable problem to be in September 2018, but we expect October will also see some negative impact year over year. Despite large negative variances in headlines, we do not think the industry is in a bad position. Sales, although declining, are still healthy, and automakers are enjoying Americans' continued mix shift to light trucks over sedans. The former are nearly 70% of U.S. light-vehicle sales each month, and GM's and Ford's own mix is about 80%.

Ford's September sales fell 11.2% year over year, or by 7.6% adjusting for the one less selling day. Retail channel volume fell 12.6%, while fleet declined by 6.7%. Ford's Houston-area business declined 44%, but sales chief Mark LaNeve said on the call that Ford Houston dealers still feel they had a good month. LaNeve could not quantify the impact from Hurricane Florence in the Carolinas, but it appears the vehicle loss from Florence is only a fraction of the loss from Harvey. F-Series pickup sales did fall 8.8% but remain robust at 75,092 units. The truck has sold over 70,000 units for seven straight months and is posting record pricing of $46,600 per unit, while Super Duty models also posted a record of $59,100 per unit. The new-generation Expedition and Lincoln Navigator are thriving, with increases of 27% and 77%, respectively. Navigator's top market is California, an encouraging sign, with its sales there up 167% in September.