U.S. News

Wednesday, March 4, 2009

Ford Feb Light-Vehicle Sales Down 48% In US As Plunge Continues

Ford Motor Co. (F) posted a 48% drop in U.S. light-vehicle sales for February as consumers with record-low confidence remain out of showrooms, extending a sales plunge that began in September and threatens the viability of multiple auto makers.

The nation's third-largest auto maker, which has so far sidestepped the need for federal assistance, also said second-quarter North American production will be 38% below year-earlier levels, reflecting efforts to pare inventory and keep output in line with the sales slump.

"A key element of our strategy to build our reputation and improve resale values is to align our production with consumer demand," said Ken Czubay, vice president, sales and marketing. And while the operating environment "remains challenging, ironically, these times provide the best opportunity to distance Ford from the competition."

The news comes amid growing concern that the world's auto makers won't get the second-half sales bounce in the U.S. they had been banking on to slow their financial erosion. January sales hit a 27-year low, with February expected to be at similar levels and 2009 sales estimates continuing to be pared. The year is widely expected to result in the fewest U.S. auto sales in decades.

Ford said domestic light-vehicle sales fell to 99,050 from 192,178, the second time in as many months the figure dropped below 100,000. The result was roughly in line with analysts' expectations.

There were 24 selling days in February, one less than a year earlier.

Ford, Lincoln and Mercury car sales dropped 48% as sport-utility vehicles continued their slump with a 71% decline. Sales of trucks and vans decreased 54% as sales of the F-series pickup fell 55%.

U.S. Ford, Lincoln and Mercury inventory dropped 32% in light of the production cuts that have already taken place.

Jeff Schuster, executive director of global forecasting at J.D. Power & Associates, expects February and March to be the year's low point. "But a high degree of uncertainty and risk remains for the second half of 2009 if the various factors that are currently impacting automotive sales do not improve or stabilize," Schuster said.

The other major auto makers will report February sales later Tuesday. Ford shares were recently down 2.1% at $1.85. The stock has lost two-thirds of its value since mid-September.