Morningstar

Ford's March Sales Suffer While GM Outperforms

We consider the current sales environment healthy and do not see the industry on the verge of a major contraction.

Securities In This Article
Ford Motor Co
(F)
General Motors Co
(GM)

Automakers reported March U.S. auto sales on April 3 that continue to show consumers’ preference for light truck models over cars. The seasonally adjusted annualized selling rate, or SAAR, came in at 16.6 million versus 16.7 million in March 2016, but total sales fell by 1.7% year over year to 1.55 million and are down 1.6% for all of 2017. We continue to expect 2017 full-year sales of at least 17 million units, but also still believe that the industry is done growing for this cycle. Off-lease supply per J.D. Power estimates for 2017 is 3.4 million, up from 3.1 million in 2016 and 2.3 million in 2015 and should grow to 3.7 million next year. More used supply will lower residual values, which makes leasing a new vehicle more expensive and lowers trade-in values, which also makes buying a new vehicle more expensive than recently. Still, we consider the current sales environment healthy despite the decline and do not see the industry on the verge of a major contraction.

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About the Author

David Whiston, CFA, CPA, CFE

Strategist
More from Author

David Whiston, CFA, CPA, CFE, is a strategist, AM Industrials, for Morningstar*. He covers stocks in the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007. He writes stock reports, ad hoc reports, stock analyst notes, and builds discounted cash flow models for each company covered. He also assesses their economic moat and makes frequent television and print media appearances in local, national, and international news outlets. Key stocks covered include GM, Ford, CarMax, and all six publicly traded franchise auto dealers, such as AutoNation and Penske Automotive Group.

Before joining Morningstar in 2007, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence, gaining experience around assessing an asset’s cash flow.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond’s Robins School of Business. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner.

In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011 .

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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