As expected, January was a great month for Ford Motor Company (NYSE:F) in the U.S.: The Blue Oval posted a 22% year-over-year sales gain. Strong new products drove good results as the U.S. auto market continued to pick up steam.
Ford's monthly gain was well ahead of the consensus analyst estimate, which called for a 17% increase, according to Bloomberg. It was also well ahead of Detroit rivals General Motors Company (NYSE:GM) and Chrysler, each of which posted a 16% year-over-year increase.
It was Ford's best January result since 2006, and a strong follow-up to a so-so result in December.
Better yet for shareholders, there were some promising trends behind the headline number.
Market forces leading to a rising tide in auto sales Ford, like other automakers, is benefiting from some macro trends that should drive continued auto sales growth as 2013 unfolds, starting with the number of consumers reentering the leasing market.U.S. new-car sales, including leasing, fell sharply during the 2008-2009 economic crisis. Some "pent-up demand" led to a spike in new-car leases during 2010 – leases that will come to an end during 2013. According to analysts at Edmunds.com, that alone should add roughly half a million car shoppers in 2013 versus 2012. That, plus better availability of consumer credit than in recent years, should continue to drive overall auto sales higher for some time longer. While sales have been up in each of the past three years, the overall market is still well below levels that were typical in the years before the economic crisis. There's still considerable room to grow, in other words. And Ford should be well-positioned to take advantage. Ford's latest hit paces a strong month For Ford, probably the biggest news in January was the strong result for its new Fusion sedan, released last fall. Consumer interest in the stylish new car has been strong, but dealer inventories had been short as Ford ramped up production lines – a problem that the company was able to address as 2013 opened. Those improved inventories led to a big result. Sales of the new Fusion were up a whopping 65% over year-ago sales of the prior model, which had been a consistently strong seller in its own right. It was the best-ever January result for Fusion, Ford said, beating the 2011 record by over 50%. Ford's Escape SUV, introduced last spring, also did quite well with a 16% increase. The larger Explorer SUV – a big hit for Ford since its introduction in 2011 – posted a 46% year-over-year increase, for the model's best January since 2006, the SUV heyday. Small cars were also solid, with Fiesta sales up and the new C-Max Hybrid continuing to gain ground. Sales of the mainstay Focus compact were up 12%. That might seem small, but the comparison is to a very strong January 2012 result for the model – it's a good incremental gain.