Company Update (NYSE:F): Ford Motor Company Posts Record Annual Sales in China Totaling 1.27 Million Vehicles


Ford Motor Company (NYSE: F) announced that sales surged 23 percent in China in December, capping a record year for the automaker in the world’s largest new vehicle market.

For all of 2016, Ford Motor Company sales totaled a best-ever 1.27 million vehicles, 14 percent higher than 2015. That total includes sales by joint ventures Changan Ford Automobile and Jiangling Motors Corporation, sales of Ford models imported to China and Lincoln, which has become the fastest growing luxury brand in China.

In December alone, Ford and its joint ventures sold nearly 150,000 vehicles in China, up 21 percent over 2015. The growth was driven by strong demand for Ford’s expanded lineup of SUVs such as the Ford Edge and Explorer, the Ford Taurus large car, and performance vehicles such as the Ford Mustang.

“We have built some great sales momentum in China, particularly in the second half of 2016, on the strength of our expanded vehicle lineup,” said Peter Fleet, vice president of Marketing, Sales and Service, Asia Pacific. “Record numbers of customers are choosing our 3-row Edge crossover, elegant Taurus sedan, Explorer premium SUV and Lincoln luxury vehicles.”

Changan Ford Automobile, Ford’s passenger car joint venture, broke both annual and December sales records. CAF sold more than 957,000 vehicles in 2016, up 14 percent compared to 2015. December sales totaled more than 115,000 vehicles, a 19 percent increase compared to December 2015.

Ford’s five-vehicle SUV lineup has been a key driver of sales growth in China. Demand for the Ford Edge and Ford Explorer, for example, rose 123 percent and 36 percent respectively in 2016. The Ford Taurus also had its best sales month ever in December and annual sales surpassed 32,000.

Ford performance vehicles continue to attract Chinese customers, with annual sales of the Ford Mustang up 45 percent and Focus RS and Focus ST sales up 12 percent for the year. The new Ford Focus and Escort have also remained popular, with sales up 8 percent and 53 percent for the small sedans.

Jiangling Motor Corp., Ford’s other joint venture in China, sold 265,056 vehicles in 2016, a 7 percent increase compared to 2015. December sales totaled 32,193 vehicles, up 28 percent compared to December 2015.

Lincoln has also had a strong year in 2016, with sales totaling 32,558 vehicles, a nearly three-fold increase compared to 2015. Lincoln’s strong performance was supported by Chinese customers’ positive reception of Lincoln SUVs and the growing number of dealerships, which reached 65 in 2016. In terms of sales, five of Lincoln’s top 10 dealerships and 11 of the top 20 were based in China in 2016.

Ford Motor Company China Retail Sales Performance

 

December 2016 January –
December 2016
December 2015 January –
December 2015
CAF 115,654 957,495 96,960 836,425
Imported Ford
Vehicles
2,009 17,599 1,417 25,340
JMC 32,193 265,056 25,181 246,615
Total Ford
Brand China
149,856 1,240,150 123,558 1,108,380
Lincoln 32,558 11,630
Total Ford and
Lincoln Brand
China
1,272,708 1,120,010

Note: Ford reports retail figures in China. JMC figures exclude export sales. Lincoln sales in China are reported on a quarterly basis. (Original Source)

Shares of Ford Motor Company are currently rising 0.23% to $12.80, or up $0.03 in pre-market trading Friday. F has a 1-year high of $14.22 and a 1-year low of $11.02. The stock’s 50-day moving average is $12.42 and its 200-day moving average is $12.42.

On the ratings front, Ford Motor Company has been the subject of a number of recent research reports. In a report issued on January 3, RBC analyst Joseph Spak reiterated a Hold rating on F, with a price target of $13, which represents a slight upside potential from current levels. Separately, on December 21, Nomura’s Anindya Das reiterated a Buy rating on the stock and has a price target of $14.50.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joseph Spak and Anindya Das have a yearly average return of 5.0% and 4.3% respectively. Spak has a success rate of 56% and is ranked #736 out of 4348 analysts, while Das has a success rate of 100% and is ranked #2857.

Sentiment on the street is mostly bearish on F stock. Out of 9 analysts who cover the stock, 4 suggest a Sell rating , 3 suggest a Hold and 2 recommend to Buy the stock. The 12-month average price target assigned to the stock is $12.20, which represents a slight downside potential from current levels.

Ford Motor Co. engages in the manufacture, distribution, and sale of automobiles. It operates through the Automotive and Financial Services business sectors. The Automotive sector operates through four business segments: North America, South America, Europe, Middle East & Africa, and Asia Pacific. The North America segment includes sale of Ford and Lincoln brand vehicles, service parts and accessories in North America. The South America segment involves sale of Ford brand vehicles and related service parts and accessories in South America. The Europe segment focuses on the sale of Ford brand vehicles and related service parts and accessories in Europe, Turkey, and Russia. The Middle East & Africa segment includes primarily the sale of Ford brand vehicles and related service parts and accessories in Middle East and Africa. The Asia Pacific segment concerns sale of Ford and Lincoln vehicles, service parts, and accessories in the Asia Pacific region. The Financial Services sector operates through Ford Credit and Other Financial Services segments. The Ford Credit segment provides vehicle related financing and leasing. The Other Financial Services segment includes a variety of businesses, including holding companies and real estate.