If you are working at Ford (F), it looks like the downturn in auto sales is ending. In June, sales fell only 11 percent over a year ago. Optimism does not permeate all of Detroit; General Motors (GM) sales feel 33 percent for the month; Chrysler, 48 percent. Even Toyota (TM) U.S. sales were down 32 percent June over June last year.
Ford is the only one of the Big Three Detroit auto makers that avoided bankruptcy and a federal bailout.
Ford ended June with a 60-day supply of vehicles on hand, down 38 percent from a year ago. Fewer inventories could lead to improved profit margins. Those inventories will shrink with a new “cash for clunkers” program that provides added government discounts of up to $4,500 for trade-in vehicles getting less than 19 mpg. It’s not all rosy, however, with many potential buyers being unable to get an auto loan.
June sales of the company’s hybrid vehicles totaled 3,649, up 91 percent versus a year ago. Ford will extend its current hybrid success with added models. During my recent test-drive of several vehicles that already meet the 2016 CAFE requirements, the midsized Ford Fusion Hybrid demonstrated that you can enjoy fuel economy in a larger car with comfort and safety. The Ford Fusion Hybrid has an EPA certified rating of 41 mpg in the city and 36 mpg on the highway. The car can be driven up to 47 mph in electric mode with no gasoline being consumed. Ford will start selling pure battery electric vehicles next year that will lower its fleet mileage average. CAFÉ
As gas prices increase, the Ford Ranger pickup sales also increased. The model with a 2.3L engine and stick shift gets the best gas mileage of any U.S. pickup at 23 mpg. Ford has the mileage champions in both pickups and SUVs.
The best mileage SUV on the market is the Ford Escape Hybrid with 32 mpg. In 2012, Ford will also offer a plug-in version of the Escape Hybrid that will blow-away the 35.5 mile standard.
The expansion of hybrid, plug-in hybrid, and battery-electric offerings will be helped by Ford recently securing $5.9 billion in federal loans with a lower 5 percent interest rate.
Ford’s first EV will be the new battery-electric Transit Connect vans. These city vans will appeal to green retailers and service companies that make deliveries and follow routes that match the 100 mile range of the electric vans. The vans are made in collaboration with Tanfield’s (TAN.L) Smith Electric are now selling in Europe and will start U.S. sales next year.
In 2011 Ford will offer a new battery-electric Focus sedan made in collaboration with Magna International (MGA). Now that most U.S. citizens live in urban settings, the idea of a primary or secondary car that never needs gasoline will have growing appeal. In 2011 Ford will offer a new battery-electric Focus sedan made in collaboration with Magna International. Now that most U.S. citizens live in urban settings, the idea of a primary or secondary car that never needs gasoline will have growing appeal. Although Nissan will have a head start with thousands of freeway-speed electric vehicles already in use by U.S. customers, Ford could catch-up if it offers the Focus EV for less than $30,000.
The competition will boost revenues for Ford battery supplier Johnson Controls-SAFT; Nissan is in a li-ion JV with NEC.
In 2012, the Ford Escape Hybrid, already the most fuel efficient SUV, will get a lot more efficient by also being available as a plug-in hybrid. The PHEV Escape Hybrid is already being tested in a number of fleets.
“In 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles,” Ford CEO Alan Mulally stated earlier this year. Now Ford is executing its electrification strategy.
By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book about the future of transportation - Save Gas, Save the Planet - now selling at Amazon and other booksellers.
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