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Ford Motor Company (F) Isn’t Missing the Ranger

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Some of my colleagues here at the Fool have worried that Ford Motor Company (NYSE:F) made a mistake by deciding to stop selling the Ranger midsize pickup in the North American market. The Ranger would offer better gas mileage than Ford’s full-size F-Series trucks while being easier to maneuver in the city (and cheaper!). Proponents of the Ranger therefore believe that Ford will lose a lot of sales to rivals that still offer midsize trucks, like Toyota Motor Corporation (ADR) (NYSE:TM) .

Ford Motor Company (NYSE:F)

As I’ve previously argued, the benefits of bringing the Ranger back to the U.S. are outweighed by the cost of confusing customers and cannibalizing sales of the more-profitable F-Series trucks. U.S. auto sales results for May further justify Ford Motor Company (NYSE:F)’s decision to kill the Ranger in the U.S. In fact, the results show that there is very little demand in the midsize truck segment.

F-Series rules
In May, sales of Ford’s F-Series trucks grew by more than 30% year over year and surpassed 70,000 in a month for the first time since 2007. Ford Motor Company (NYSE:F) sold nearly 17,000 more F-Series trucks this month than it did last May, easily overshadowing the loss of 1,607 Rangers that were sold in 2012 but are no longer available. For the full year, F-Series sales are up 21.7% and combined sales of the F-Series and Ranger are up 13.6%.

Looking across Detroit, while General Motors Company (NYSE:GM) had a pretty good month as well, it’s clear that Ford is king of the hill. Combined sales of GM’s Chevy Silverado and GMC Sierra pickups totaled 59,344, up 24% year over year but still well below Ford Motor Company (NYSE:F)’s F-Series sales total. General Motors Company (NYSE:GM)’s pickup sales may be weighed down somewhat by the impending arrival of redesigned 2014 models, but that is being offset by discounts designed to move the old inventory out.

High demand for F-Series trucks bodes well for Ford’s profitability this quarter, especially because Ford has boosted sales without high incentive spending. With F-Series sales surging in the U.S., Ford has no real need for a second, slightly smaller pickup like the Ranger.

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