Ford December U.S. sales drop 32.4%

(RTTNews) - Ford Motor Co. (F | Quote | Chart | News | PowerRating), the third largest U.S. automaker, said Monday its December U.S. sales dropped 32.4% from a year ago, hurt by a weakening economy and tight credit conditions.

The Dearborn, Michigan-based automaker, which was displaced by Toyota as No.2 U.S. automaker in 2007, said it sold 139,067 vehicles in December, down from 205,685 vehicles sold in the same month in 2007. For November, the automaker had reported a 30.6% drop in U.S. vehicle sales.

Total sales of Ford, Lincoln and Mercury vehicles fell 31.7% to 134,114 units in December from 196,344 a year ago. Volvo sales plunged 47% year over year to 4,953 units.

In the Ford, Lincoln and Mercury brands, car sales fell 26.4% year over year to 43,087 units in December, while crossover utility sales, which include Ford Escape, Edge and Flex, dipped 31.8% to 25,822 units and SUV sales dropped 51.8% to 10,910 units. Truck and van sales slipped 29.7% to 54,295 units.

Even sales of the Focus, a hot-selling small car, fell 16.8% to 11,671 units in December, while sales of another fuel-efficient car Escape dropped 17.6% to 10,967 units.

Sales of Ford's F-Series truck, America's best selling vehicle for 31 years in a row, fell 24.5% to 41,580 units in December from 55,069 units in the same month in 2007. The lucrative truck market has been particularly hard hit by the continued downturn in the U.S. home-construction market. The all-new F-150 accounted for 8,600 of total F-Series sales in December, an increase of 84% from the previous month.

Retail sales to individual customers were down 27% in December, and fleet sales fell 42%, including a 57% decline in daily rental sales that is consistent with Ford's plans.

For 2008, Ford's total vehicle sales declined 20.7% to 1.99 million units from 2.51 million units in 2007.

Total sales of Ford, Lincoln and Mercury vehicles fell 20.2% to 1.92 million units in 2008 from $2.40 million units in 2007. Volvo sales dropped 31.2% to 73,102 units in 2008.

Ford estimates its market share was 14.6% in December, up 0.7% a point from December 2007 and the first time since 1997 that the company has achieved a market share increase three months in a row.

The U.S. market continues to be difficult for every automaker, with consumer confidence weak and 2008 sales expected to be the lowest in more than a decade. However, it is most difficult for the Detroit Three, who have relied more heavily on sales of trucks and SUVs, than their foreign counterparts.

According to a report from J.D. Power and Associates released in October, the auto industry could "collapse" outright in 2009.

The firm predicted that U.S. new-vehicle retail sales will total 10.8 million units in 2008, 2 million below 2007. Overseas, vehicle sales are expected to decline in China, India and European markets, although the decline will be far more dramatic in mature markets.

Last month, Ford reported a narrower third quarter net loss on a huge one-time gain related to retiree health care expenses. However, the company's operating loss for the quarter widened to almost $3 billion, mainly reflecting poor performance in North America. The company also burned through $7.7 billion in cash in the third quarter.

Ford was the only one of the Big Three automakers that didn't seek part of the $17.4 billion in U.S. government auto-bailout funds that recently were committed to General Motors Corp. (GM | Quote | Chart | News | PowerRating) and Chrysler.

In a recent development, billionaire investor Kirk Kerkorian's Tracinda Corp. has sold off its remaining stake in Ford.

Tracinda, which sold 7.3 million shares of Ford common stock in October, had said it planned to further reduce its stake in Ford and may sell all of its remaining 133.5 million shares, representing about 6.09% of the Ford's outstanding shares, depending upon market conditions and available sales prices. Tracinda had also said at that time it had contacted an investment-banking firm regarding the possible sale of such shares.

That move from Kerkorian comes after over 60% drop in Ford shares since he raised his stake to about 6.5% in June and said he was willing to support the automaker's turnaround with an infusion of additional capital.

Among other automakers reporting December U.S. sales Monday, GM said its dealers in the United States delivered 221,983 vehicles in December, down 31.4% from 323,453 delivered in December 2007.

GM's car sales fell 24.9% to 87,506 units in December, while truck sales dropped 35% to 134,477 units.

Ford shares are currently trading at $2.58, up 12 cents or 4.88%, while GM shares are currently trading at $3.86, up 21 cents or 5.81%.

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