<Alert!> Ford US sales sees strongest year since the pandemic
- Ford reported FY23 US vehicle sales at 1.996m, up +7% yoy, the best year since the pandemic
- Whilst Ford lags behind peers in US vehicle sales growth, Ford has seen positive progress in EV transition
- Market is watching for 2024 guidance and EV transition. Maintain HOLD with unchanged TP of US$11.
Ford US sales sees strongest year since the pandemic though still lags behind peers; Positive progress in EV transition. Ford reported 4Q23 US vehicle sales of 488k (-3% qoq, +11% yoy), bringing FY23 US vehicle sales at 1.995m (+7%). Whilst Ford saw the best year in US vehicle sales since the pandemic, we note that Ford’s US sales growth in 2023 lagged behind the industry’s growth rate of 12% and also behind its peers e.g., GM (FY23 US sales of 2.59m, +14%). On a positive note, Ford has made positive progress in its EV transition, with EV sales making up 3.6% of its 2023 US sales and 5.3% of its 4Q23 sales, trending slightly ahead of GM (FY23 EV sales mix at 2.9%).
Continue to watch for 2024 guidance and EV transition. Ford’s EV transition continues to remain lacklustre relative to EU peers (BMW: 13%, Mercedes: 11%, VW: 8%). Further, in Nov 2023, Ford has guided that it will be scaling back plans for its US$3.5bn Michigan battery plant (which was previously supposed to be a LFP plant in collaboration with CATL) as well as US$12bn in EV investments on the back of disappointing EV demand and higher labour costs, which puts Ford’s long term growth story in question amid an industry that is heavily ramping up on EV/battery/other efforts. Key datapoints to watch would include 2024 guidance (financials to be released on 06 Feb 2024) and continual progress on EV transition. Maintain HOLD with unchanged TP of US$11. Ford is currently offering firm forward dividend yields of c.5.4%, at +0.5 SD of its average historical dividend yield of 4%, and also above its peers average dividend yield of 3.5%.
Ford (# units) | 1Q-22 | 2Q-22 | 3Q-22 | 4Q-22 | 1Q-23 | 2Q-23 | 3Q-23 | 4Q-23 | QoQ | YoY | 2022 | 2023 | YoY |
US sales | 432,132 | 483,688 | 464,674 | 439,685 | 456,972 | 531,662 | 500,504 | 487,840 | -3% | 11% | 1,864,464 | 1,995,912 | 7.1% |
US EV sales | 7,706 | 15,273 | 18,257 | 20,339 | 10,866 | 14,843 | 20,962 | 25,937 | 24% | 28% | 61,575 | 72,608 | 17.9% |
EV sales as % | 1.8% | 3.2% | 3.9% | 4.6% | 2.4% | 2.8% | 4.2% | 5.3% | 3.3% | 3.6% | |||
Ford (#k units) | 2019 | 2020 | 2021 | 2022 | 2023 | YoY | |||||||
US sales | 2,412 | 1,826 | 1,716 | 1,864 | 1,996 | 7.1% |
Overall industry | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023F | YoY |
US Sales (m) | 16.5 | 17.5 | 17.5 | 17.2 | 17.3 | 17.0 | 14.6 | 15.0 | 13.9 | 15.5 | 12% |
Note: 2023F is based on industry estimates. Source: Company, Kelley Blue Book, Cox Automotive, DBS Bank