Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Ford Motor Company (F)’s Hot F-150 Sales Look Set to Continue

Page 1 of 2

Good news for Ford Motor Company (NYSE:F), and for General Motors Company (NYSE:GM) and Chrysler as well: Pickup sales have been up sharply in recent months.

Sales of Ford Motor Company (NYSE:F)’s F-Series line, the F-150 and its Super Duty siblings, were up 31% in May – a huge jump that far outpaced the overall market’s gains. What’s more, F-Series buyers have been opting for more expensive pickups.

What’s driving those trends? And what do they mean for Ford’s bottom line?

Ford Motor Company (NYSE:F)

A perfect economic storm for pickups – in a good way
There are a couple of things driving this big jump in pickup sales. One is what auto executives call “pent-up demand”. The average age of a pickup in the US is around 11 years old right now. That’s older than the historical norm, and it suggests that a lot of people and businesses have been waiting to buy – likely because the economy has been tight.

Another factor is the economy – specifically, that a couple of parts of the economy that are correlated with pickup sales have been picking up steam. Ford sales analyst Erich Merkle says that increases in new-home construction and oil-field services have both driven demand for Ford Motor Company (NYSE:F)’s pickups.

Both are likely to continue to drive demand for some time. And that’s a very good thing for Ford’s profits.

Pickups are the fuel that powers Ford’s engine
Ford Motor Company (NYSE:F) divides its business into several geographical regions, and the one that has carried the business lately is North America. Sales, margins, and profits in North America have all been great for Ford. And pickups have a lot to do with that: Morgan Stanley (NYSE:MS) analyst Adam Jonas said late last year that F-Series sales might account for as much as 90% of Ford’s global profits.

There are two reasons why the F-Series is such a big contributor for Ford Motor Company (NYSE:F). First, these pickups sell in really big numbers. Ford sold over 70,000 F-Series pickups in May alone. For comparison, Ford sold 29,553 Fusions in May – and the Fusion is a hot seller. But the F-Series has been America’s best-selling vehicle for over 30 years, and a very big part of Ford’s business the whole time.

Second, full-sized pickups like the F-Series are very profitable products, with high margins. And those margins may be getting higher. Ford has been working hard to lower its reliance on incentives, which cut into profits.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!