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Report: Detroit 3 Earnings Commentary from Edmunds

January 24, 2018 1 Comment
Heading into Q4 earnings announcements from Ford, FCA and GM, a summary of some helpful market data from Edmunds expert analysts on sales, days-to-turn, incentives, market share, average transaction price, lease penetration and more. A quick summary of Driving-Sales-Automotive-News-Detroit-3-Earnings-Commentary-from-Edmundsthe highlights from each OEM is below, along with commentary from Jessica Caldwell, Edmunds executive director of industry analysis.


Ford

Ford enjoyed a nice sales boost in Q4, with an rise of 4.6 percent compared to Q4 of 2016. This kept the company’s sales roughly flat in 2017 year-over-year, dipping incrementally by .9 percent. These sales came at a high price however – in 2017, Ford’s incentives were up by 20.4 percent to an average of $4,445, which is more than $1,000 higher than the 2017 industry average of $3,400.

“With incentives already at high levels and the truck wars heating up, Ford is setting itself up for an expensive 2018. While consumer demand for trucks and SUVs shows no signs of slowing down, attractive new entries from RAM and Chevrolet threaten to slow the F-150’s hot sales streak. The investments Ford is planning in autonomy and mobility don’t come cheap, which make strong sales of the company’s backbone truck products even more critical to Ford’s future.”

 

FCA

FCA had a tough Q4, capping off a challenging year for the automaker. Sales slipped 9.4 percent in Q4 compared to Q4 of 2016, and were down 8.3 percent year-over-year. Sales of light trucks accounted for nearly 90 percent of FCA’s sales in Q4, and 87.6 percent for the year. This compares to an industry average of 67.1 percent and 77 percent and 75.6 percent for Ford and GM, respectively. The company also lost nearly a full percent of market share in 2017, and saw incentives climb 18 percent.

“Considering the strength of the Jeep brand and the incessant consumer demand for SUVs, FCA does have some of the right building blocks for success. The new RAM 1500 and Jeep Wrangler are both getting positive initial reviews, so if FCA can nail the launches of their bread-and-butter products, it will give the company a needed bright spot in 2018.”

 

GM

GM closed 2017 on a bit of a down note, with sales dipping 2.8 percent in Q4 compared to 2016, and down 1.3 percent year-over-year. While the company was very aggressive with incentives in Q1, it pulled back a bit as the year went on, ending 2017 with incentives rising 9.4 percent year-over year to $4,118, roughly $700 higher than industry average. The best news for GM in Q4 was the fact that it started to get its inventory issues under control; GM’s average days-to-turn in Q4 was 104 days, which shows that older vehicles were finally starting to find their way off dealer’s lots.

“GM was plagued by inventory issues throughout much of 2017, but managed to move a lot of old metal in Q4. With a new Silverado on the horizon and a diverse SUV lineup, GM has a lot to look forward to in 2018. Sedans will continue to be GM’s achilles heel, but as the company starts to shift production in favor of the trucks and SUVs it does well, it should start to find the right balance.”

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  • Andrew James says:

    Interesting story.